United
States Securities and Exchange Commission
WASHINGTON,
D.C. 20549
FORM
10-K
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(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, 2006
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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, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
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Large
accelerated filer þ
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Accelerated
filer ¨
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Non-accelerated
filer ¨
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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 $367.3 billion. Affiliates of the Company beneficially own, in
the
aggregate, less than one-tenth of one percent of such shares. There were
10,283,130,000 shares of voting common stock with a par value of $0.06
outstanding at February 9, 2007.
DOCUMENTS
INCORPORATED BY REFERENCE
The
Annual Report to Shareowners for the fiscal year ended December 31, 2006 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 25, 2007, is incorporated by reference
in Part III to the extent described therein.
(1)
Table
of Contents
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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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18
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Properties
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18
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Legal
Proceedings
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18
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Submission
of Matters to a Vote of Security Holders
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19
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Part
II
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Market
for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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19
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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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22
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Part
III
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Directors
and Executive Officers of the Registrant
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23
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Executive
Compensation
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23
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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24
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Certain
Relationships and Related Transactions, and Director
Independence
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24
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Principal
Accounting Fees and Services
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24
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Part
IV
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Exhibits,
Financial Statement Schedules
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25
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31
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(2)
Part
I
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 74 of the 2006 Annual Report to Shareowners of
General Electric Company (the Company). The financial section of such Annual
Report to Shareowners (pages 45 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 2006 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.
GE
is one of the largest and most diversified industrial corporations in the world.
We have engaged in developing, manufacturing and marketing a wide variety of
products for the generation, transmission, distribution, control and utilization
of electricity since our incorporation in 1892. Over the years, we have
developed or acquired new technologies and services that have broadened
considerably the scope of our activities.
Our
products include major appliances; lighting products; industrial automation
products; medical diagnostic imaging systems; bioscience assays and separation
technology products; electrical distribution and control equipment; locomotives;
power generation and delivery products; nuclear power support services and
fuel
assemblies; commercial and military aircraft jet engines; chemicals and
equipment for treatment of water and process systems; security equipment and
systems; and engineered materials, such as plastics.
Our
services include product services; electrical apparatus installation,
engineering, and repair and rebuilding services. Through our affiliate, NBC
Universal, Inc., we produce and deliver network television services, operate
television stations, produce and distribute motion pictures, operate
cable/satellite networks, operate theme parks, and program activities in
multimedia and the Internet. Through another affiliate, General Electric Capital
Services, Inc., we offer a broad array of financial and other services including
consumer financing, commercial and industrial financing, real estate financing,
asset management and leasing, mortgage services and consumer
savings.
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 with
syndicated broadcast television programming, cable and 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.
(3)
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 $87.4 billion in 2006, compared with
$75.6 billion in 2005 and $66.2 billion in 2004. For additional information
about our global operations, see page 57 of the 2006 Annual Report to
Shareowners.
Operating
Segments
Segment
revenue and profit information is presented on page 53 of the 2006 Annual Report
to Shareowners. Additional financial data and commentary on recent financial
results for operating segments are provided on pages 52-56
of
that report and in note 26 (page 100) to the consolidated financial
statements.
In
January 2007, we announced the planned acquisitions of Smiths Aerospace and
Vetco-Gray by Infrastructure and Abbott’s primary in
vitro
diagnostics businesses and Abbott Point-of-Care diagnostics business by
Healthcare. Also during January 2007, we announced that we were reviewing the
potential disposition of our Plastics business by Industrial. In the fourth
quarter of 2006, we completed the sales of our Advanced Materials business
by
Industrial and GE Life, our U.K.-based life insurance business. We have reported
GE Life as a discontinued operation for all periods presented.
Operating
businesses that are reported as segments include Infrastructure, Commercial
Finance, GE Money (formerly Consumer Finance), Healthcare, NBC Universal and
Industrial. There is appropriate elimination of the net earnings of GECS and
the
immaterial effect of transactions between segments to arrive at total
consolidated data. A summary description of each of our operating segments
follows.
We
will
also continue our longstanding practice of providing supplemental information
for certain businesses within the segments.
Infrastructure
Infrastructure
(29.0%, 28.3% and 27.8% of consolidated revenues in 2006, 2005 and 2004,
respectively) produces, sells, finances and services equipment for the air
transportation and energy generation industries. We also produce, sell and
service equipment for the rail transportation and water treatment industries.
Our
operations are located in North America, Europe, Asia and South
America.
(4)
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 engines through CFM International, a company
jointly owned by GE and Snecma, a subsidiary of SAFRAN of France; and new
engines are being designed and marketed in joint ventures with the Pratt &
Whitney division of United Technologies Corporation and Honda Aero, Inc., a
division of Honda Motor Co., Ltd.
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.
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.
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.
On
January 15, 2007, Aviation announced the acquisition of Smiths Aerospace from
Smiths Group plc for approximately $4.8 billion in cash. Smiths Aerospace is
a
$2.4 billion (sales) global aerospace systems and equipment company that
includes innovative flight management systems, airborne platform computing
systems, power generation, conversion and distribution products, actuation
products and systems for flight control, thrust reversers and landing gear
applications, various engine components and a global customer services
organization to military and commercial airframe manufacturers. The acquisition
is subject to regulatory approvals in the U.S. and abroad.
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,
pilot training, 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.
(5)
The
North American commercial aviation industry improved during 2006 because of
a
strong revenue environment and continued cost reduction efforts by the airlines,
despite rising fuel prices. Although these conditions have improved the overall
industry outlook, the airlines continue to face challenges and financial
pressure that affect a portion of our commercial aviation business. Several
airlines are experiencing major restructuring and reorganization, including
those who remain in, or recently emerged from, bankruptcy, while others could
be
candidates for further industry consolidation.
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 and geothermal 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
worldwide supplier of gas turbines for Integrated Gasification Combined Cycle
(IGCC) applications, having provided gas turbines for a significant number
of
the world’s operating IGCC plants. 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 also
a
part of this segment. 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
most power generation products and services is global and, as a result, is
sensitive to the economic and political environment of each country in which
we
do business. Regional load growth requirements and demand side management are
important factors. The availability of fuels and related prices have a large
impact on demand.
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.
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.
(6)
Oil
& Gas
Oil
& Gas supplies advanced technology turbomachinery, principally compressors
and turbines, and services (including pipeline inspection and integrity
solutions) for the production, transportation and refining of oil and natural
gas. A truly 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.
Signaling
a major expansion of its footprint in the industry, 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. Our products include high horsepower
diesel-electric locomotives as well as parts and services for locomotives,
including locomotives manufactured by competitors.
With
the launch of the Evolution Series™ locomotive, we created our most
technologically advanced, most fuel-efficient, diesel locomotive, while meeting
or exceeding the U.S. Environmental Protection Agency’s Tier II requirements.
Commercial production of the Evolution Series™ locomotive began in January
2005.
The
GE suite of locomotive services offerings, designed to improve fleet efficiency
and reduce operating expenses, includes 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. 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 drive 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.
(7)
Water
Water
offers productivity 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 54 of
the 2006 Annual Report to Shareowners.
Commercial
Finance
Commercial
Finance (14.6 %, 14.0% and 14.5% of consolidated revenues in 2006, 2005 and
2004, 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, telecommunications and healthcare
industries.
During
2006, we made a number of acquisitions, the most significant of which were
Arden
Realty, Inc., a commercial real estate company in the U.S.; Banque Artesia
Nederland N.V., a subsidiary of Dexia Group; the custom fleet business of
National Australia Bank Ltd.; and several senior housing portfolios from
Formation Capital LLC.
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
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.
(8)
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 (13.3%, 13.1% and 11.7% of consolidated revenues in 2006, 2005 and 2004,
respectively), formerly Consumer Finance, 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; corporate travel and purchasing cards; debt
consolidation; home equity loans; deposit and other savings products, and credit
insurance on a global basis.
In
2006, as part of our continued global expansion, we made a number of
acquisitions, the most significant of which was the private-label credit card
portfolio of Hudson’s Bay Company, the largest department store retailer in
Canada.
Our
operations are subject to a variety of bank and consumer protection regulations,
including regulations controlling data privacy. 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 in Stamford, Connecticut and our operations are located in
North America, South America, Europe, Australia and Asia.
(9)
Healthcare
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.
For
information about orders and backlog, see page 55 of the 2006 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, Inc. (NBC Universal) (9.9%, 9.9% and 9.6% of consolidated revenues
in
2006, 2005 and 2004, respectively) was formed in May 2004 upon the combination
of NBC with Vivendi Universal Entertainment LLLP and certain related assets.
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
broadcasting stations; the ownership of several cable/satellite networks around
the world; the operation of theme parks; and investment and programming
activities in multimedia 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 a U.S.
Spanish-language commercial broadcast television network. At December 31, 2006,
we owned and operated 26 television stations including those located in Los
Angeles, CA; Miami, FL; Chicago, IL; New York, NY; Philadelphia, PA and
Washington, DC. Broadcasting operations of the NBC television network, the
Telemundo network, and the company’s owned stations are subject to FCC
regulation. Our operations include cable television networks, principally USA
Network, Bravo, CNBC, SciFi Channel, MSNBC, the Sundance Channel and
entertainment channels across Europe and Latin America. We have secured
exclusive United States television rights to the 2008, 2010 and 2012 Olympic
Games, National Football League Sunday Night Football and Super Bowls in 2009
and 2012.
(10)
NBC
Universal’s broadcast ratings and advertising revenue are affected by viewer
demographics and the availability of other entertainment choices. In addition,
recent technological advances like personal video recorders offer personal
entertainment through new media, introducing additional uncertainty to future
revenue sources. Other technologies enable copying content, increasing the
risk
of content piracy, particularly in international markets where the intellectual
property laws may not be clear or strictly applied.
NBC
Universal’s headquarters are in New York, New York and our operations are
global.
Industrial
Industrial
(20.5%, 22.1% and 22.9% of consolidated revenues in 2006, 2005 and 2004,
respectively) produces and sells products including consumer appliances,
industrial equipment and plastics, and related services. We also provide asset
management services for the transportation industry.
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,
warranty administration and risk management services. 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.
(11)
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, relays, 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 end-industrial and consumer products such
as
heating, ventilation and air conditioning, dishwashers, and clothes washers
and
dryers. We also provide customer-focused solutions centered on the delivery
and
control of electric power, and market a wide variety of commercial lighting
systems and lighting for aircraft, automotive and other transportation
applications, front and rear video projection, medical, architectural, fiber
optic, stage, studio, nightclub and theater applications.
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
pressures to modernize productive capacity.
Equipment
Services
Equipment
Services is a provider of transport solutions for domestic and international
supply chains. We offer a wide range of equipment leasing and intelligence-based
asset management and logistics services for commercial and transportation
equipment, including tractors, trailers, railroad rolling stock, modular space
units, and land and marine shipping containers. Our operations are conducted
in
highly competitive markets. Economic conditions, geographic location, pricing
and equipment availability are important factors in this business. Future
success will depend upon our ability to maintain a large and diverse customer
portfolio, optimize asset mix, maximize asset utilization and manage credit
risk
as well as providing our customers with solutions to assist in asset and supply
chain management.
Plastics
Plastics
manufactures and sells high-performance plastics and structured products used
by
compounders, molders, and major original equipment manufacturers for use in
a
variety of applications, including fabrication of automotive parts, computer
enclosures, compact disks and optical-quality media, major appliance parts,
telecommunications equipment and construction materials. Our business has a
significant operating presence around the world and we participate in numerous
manufacturing and distribution joint ventures.
Our
business environment is characterized by technological innovation and heavy
capital investment. To remain competitive we must maintain emphasis on efficient
manufacturing process implementation and devote significant resources to market
and application development. Our competitors include large, technology-driven
suppliers of the same, as well as other functionally similar, materials. Our
business is cyclical and is sensitive to variations in price and to the effects
of supply/demand factors on the cost of utilities and raw materials such as
benzene, cumene and phenol. Competition is affected by availability of
manufacturing capacity and anticipation of new product or material performance
requirements. Our application development, often in association with our
existing or potential customers, and associated technology assistance have
added
additional demand. Product and manufacturing process patents establish barriers
to entry in many product lines. In January 2007, we announced that we are
reviewing the potential disposition of our Plastics business.
(12)
Other
Prior
to the sale of our Advanced Materials business in December 2006, our Industrial
business also sold silicones and high-purity quartzware. We sold these materials
to a diverse, worldwide customer base, mainly manufacturers. Our business had
a
significant operating presence around the world and we participated in numerous
manufacturing and distribution joint ventures.
We
also offer protection and productivity solutions to some of the most pressing
issues that industries face: safe facilities, plant automation 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 smoke
detection, real estate and property control, and explosives and narcotics
detection. We are an industry leader in the design and manufacture of
measurement elements, 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.
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 includes the results of 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, Exports from the U.S. and Total Global Operations
Geographic
data (based on the location of the Company operation supplying goods or services
and including exports from the U.S. to unaffiliated customers) are reported
in
note 26 to the consolidated financial statements on page 100 of the 2006
Annual Report to Shareowners.
Additional
financial data about our exports from the U.S. and total global operations
are
provided on page 57 of the 2006 Annual Report to Shareowners.
(13)
Orders
Backlog
See
pages 54, 55 and 66 of the 2006 Annual Report to Shareowners for
information about our backlog of unfilled orders.
Research
and Development
Total
expenditures for research and development were $3,659 million, $3,425 million
and $3,091 million in 2006, 2005 and 2004, respectively. Of these amounts,
$2,969 million in 2006 was GE-funded ($2,741 million in 2005 and $2,443 million
in 2004); and $690 million in 2006 was funded by customers ($684 million in
2005
and $648 million in 2004), 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 2006 and $0.1
billion in 2005. 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, 2006 and 2005, included
liabilities for the estimated costs of this remediation.
Employee
Relations
At
year-end 2006, General Electric Company and consolidated affiliates employed
approximately 319,000 persons, of whom approximately 155,000 were employed
in
the United States. For further information about employees, see page 67 of
the 2006 Annual Report to Shareowners.
(14)
Approximately
19,500 GE manufacturing and service employees in the United States are
represented for collective bargaining purposes by a total of approximately
150
different local collective bargaining groups. A majority of such employees
are
represented by union locals that are affiliated with, and bargain in conjunction
with, the International Union of Electronic, Electrical, Salaried, Machine
and
Furniture Workers (IUE/CWA-AFL-CIO). During 2003, General Electric Company
negotiated four-year contracts with unions representing a substantial majority
of those United States employees who are represented by unions. Most of these
contracts will terminate in June 2007, and we will be engaged in negotiations
to
attain new agreements. While results of the 2007 union negotiations cannot
be
predicted, our recent past negotiations have resulted in agreements that
increased costs.
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
|
||||||||||||||||
|
2006
|
2005
|
2004
|
2006
|
2005
|
2004
|
||||||||||||
|
Total
sales to U.S. Government Agencies
|
2
|
%
|
2
|
%
|
2
|
%
|
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; NBC is a trademark
and service mark of NBC Universal, Inc.; and MSNBC is a trademark and service
mark of MSNBC Cable, LLC.
(15)
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.
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 2006 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. One of our strategic objectives is to maintain these “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 rating could
adversely affect our cost of funds and related margins.
(16)
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 which reduce
the
allowable lending rate or limit consumer borrowing, and from local liquidity
regulations, that may increase the risks of not being able to retrieve assets
and changes to tax law which may affect our return on investments. Our business
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.
(17)
Item
1B. Unresolved Staff Comments
Not
applicable.
Item
2. Properties
As
previously reported, since January 2005, the U.S. Securities and Exchange
Commission (SEC) staff has been conducting an investigation of the use of
hedge
accounting for derivatives by us and General Electric Capital Corporation
(GECC). 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 continued to subpoena
documents and take testimony in this matter. We and GECC continue to cooperate
fully with its investigation.
In
the course of the SEC investigation, the SEC Enforcement staff raised certain
concerns about our accounting for the use of interest rate swaps to fix certain
otherwise variable interest costs in a portion of our commercial paper program
at GECC. The SEC Enforcement staff referred such concerns to the Office of
Chief
Accountant (OCA). We and our auditors determined that our accounting for
the
commercial paper hedging program satisfied the requirements of Statement
of
Financial Accounting Standards (SFAS) 133, Accounting
for Derivative Instruments and Hedging Activities,
as amended, and conveyed our views to the staff of OCA. Following our
discussions, however, OCA communicated its view to us that our commercial
paper
hedging program as structured did not meet the SFAS 133 specificity requirement.
Accordingly, we restated our previously reported financial results to eliminate
hedge accounting for the interest rate swaps entered into as part of our
commercial paper hedging program from January 1, 2001.
As
previously disclosed, on April 16, 2004, the New York Department of
Environmental Conservation (DEC) informed the company that it would be seeking
$97,800 in penalties for violations of the state of New York’s water and
hazardous waste laws at its Waterford, New York facility. In July 2004, DEC
informed the company that it was dropping certain allegations and including
others pertaining to the reporting of information and increasing its penalty
demand to $117,000. The matter was settled in October 2006 and the company
has
paid a penalty of $90,000.
As
previously disclosed, 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 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 us. The
company continues to engage in settlement discussions with the Agency over
both
the nature and severity of the alleged violations.
(18)
As
previously disclosed, in August 2006, the New Jersey Department of Environmental
Protections (DEP) issued an Administrative Order seeking a penalty of $142,000
for violations of the Clean Air Act at GECC’s Linden, New Jersey facility. The
DEP has alleged that emissions from the facility exceeded thresholds established
in the site’s permit. GECC has requested a hearing to contest the fine, and DEP
has offered to settle the matter for 50% of the proposed penalty. GECC is
continuing to discuss the matter with the state of New Jersey.
Not
applicable.
Part
II
|
Item
5.
|
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
|
||
|
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
|
||
|
2005
|
|||||
|
Fourth
quarter
|
$36.34
|
$32.67
|
$.25
|
||
|
Third
quarter
|
35.78
|
32.85
|
.22
|
||
|
Second
quarter
|
37.34
|
34.15
|
.22
|
||
|
First
quarter
|
36.89
|
34.95
|
.22
|
||
As
of January 31, 2007, there were about 626,000 shareowner accounts of record.
(19)
Five-year
financial performance graph: 2002-2006
Comparison
of five-year cumulative return among GE, S&P 500 and Dow Jones Industrial
Average
The
annual changes for the five-year period shown in the graph on this page are
based on the assumption that $100 had been invested in GE stock, the Standard
& Poor’s 500 Stock Index and the Dow Jones Industrial Average on December
31, 2001, and that all quarterly dividends were reinvested at the average of
the
closing stock prices at the beginning and end of the quarter. The total
cumulative dollar returns shown on the graph represent the value that such
investments would have had on December 31, 2006.
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
|||||||||||||
|
GE
|
$
|
100
|
|
$
|
62
|
|
$
|
81
|
|
$
|
98
|
|
$
|
97
|
|
$
|
106
|
|
|
S&P
500
|
100
|
78
|
100
|
111
|
117
|
135
|
||||||||||||
|
DJIA
|
100
|
85
|
109
|
115
|
117
|
139
|
(20)
|
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
program(c)
|
Approximate
dollar
value
of shares that
may
yet be purchased
under
our share
repurchase
program
|
|||||||||||||
|
(Shares
in thousands)
|
|||||||||||||||||
|
2006
|
|||||||||||||||||
|
October
|
21,544
|
$35.53
|
15,716
|
||||||||||||||
|
November
|
11,310
|
$35.72
|
6,235
|
||||||||||||||
|
December
|
16,215
|
$36.57
|
7,619
|
||||||||||||||
|
Total
|
49,069
|
$35.92
|
29,570
|
$
|
11.8
billion
|
||||||||||||
|
(a)
|
Information
is presented on a fiscal calendar basis, consistent with our quarterly
financial reporting.
|
|
(b)
|
This
category includes 19,499 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 (the Program) under which we were authorized to repurchase up
to $25
billion of Company common stock through 2008. The Program is 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 Program.
|
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 67 of the Annual Report to
Shareowners for the fiscal year ended December 31, 2006.
Incorporated
by reference to pages 48-66 and 109-111 of the Annual Report to Shareowners
for the fiscal year ended December 31, 2006.
Incorporated
by reference to pages 60 and 61 of the Annual Report to Shareowners for the
fiscal year ended December 31, 2006.
See
index under item 15.
Not
applicable.
(21)
(a)
Evaluation of Disclosure Controls and Procedures
Under
the direction of our Chief Executive Officer and Chief Financial Officer, we
evaluated our disclosure controls and procedures as of
December 31, 2006. We identified the following material weakness in
our internal control over financial reporting -
we did not have adequately designed procedures to designate each hedged
commercial paper transaction with the specificity required by Statement of
Financial Accounting Standards 133, Accounting
for Derivative Instruments and Hedging Activities,
as amended. The restatement that resulted from this material weakness is
discussed in (b) below. Solely as a result of this material weakness, we
concluded that our disclosure controls and procedures were not effective as
of
December 31, 2006. Other than with respect to the identification of this
material weakness, there was no change in our internal control over financial
reporting during the quarter ended December 31, 2006, that materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
(b)
Management’s Annual Report on Internal Control over Financial Reporting
Management’s
annual report on internal control over financial reporting and the report of
independent registered public accounting firm are incorporated by reference
to
pages 46 and 47 of the Annual Report to Shareowners for the fiscal year ended
December 31, 2006.
Not
applicable.
(22)
Part
III
Executive
Officers of the Registrant (As of February 27, 2007)
|
Name
|
|
Position
|
|
Age
|
|
Date
assumed
Executive
Officer
Position
|
|
|
|
|
||||
|
Jeffrey
R. Immelt
|
Chairman
of the Board and Chief Executive Officer
|
51
|
January
1997
|
|||
|
Philip
D. Ameen
|
Vice
President and Comptroller
|
58
|
April
1994
|
|||
|
Kathryn
A. Cassidy
|
Vice
President and GE Treasurer
|
52
|
March
2003
|
|||
|
William
J. Conaty
|
Senior
Vice President, Human Resources Advisor
|
61
|
October
1993
|
|||
|
Pamela
Daley
|
Senior
Vice President, Corporate Business Development
|
54
|
July
2004
|
|||
|
Brackett
B. Denniston III
|
Senior
Vice President and General Counsel
|
59
|
February
2004
|
|||
|
Joseph
M. Hogan
|
Senior
Vice President, GE Healthcare
|
49
|
November
2000
|
|||
|
John
F. Lynch
|
Senior
Vice President, Human Resources
|
54
|
January
2007
|
|||
|
Michael
A. Neal
|
Vice
Chairman of General Electric Company; Chairman, GE Capital
Services
|
53
|
September
2002
|
|||
|
David
R. Nissen
|
Senior
Vice President, GE Money
|
55
|
September
2002
|
|||
|
John
G. Rice
|
Vice
Chairman of General Electric Company; President & CEO, GE
Infrastructure
|
50
|
September
1997
|
|||
|
Keith
S. Sherin
|
Senior
Vice President and Chief Financial Officer
|
48
|
January
1999
|
|||
|
Lloyd
G. Trotter
|
Vice
Chairman of General Electric Company; President & CEO, GE
Industrial
|
61
|
November
1992
|
|||
|
Robert
C. Wright
|
Vice
Chairman of General Electric Company
|
63
|
July
2000
|
|||
|
Jeffrey
A. Zucker
|
President
and CEO, NBC Universal, Inc.
|
41
|
February
2007
|
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.
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” in the definitive proxy statement filed
with the SEC relating to the registrant’s Annual Meeting of Shareowners to be
held April 25, 2007.
Incorporated
by reference to “Compensation Discussion and Analysis,” “Compensation Committee
Report,” “Summary Compensation Table,” “Grants of Plan-Based Awards,”
“Outstanding Equity Awards at 2006 Fiscal Year-End,” “Option Exercises and Stock
Vested in Fiscal 2006,” “Pension Benefits in Fiscal 2006,” “Nonqualified
Deferred Compensation Table in Fiscal 2006,” “Potential Payments Upon
Termination” and “Non-management Directors’ Compensation for Fiscal 2006” in the
definitive proxy statement filed with the SEC relating to the registrant’s
Annual Meeting of Shareowners to be held April 25, 2007.
(23)
Item
12. Security
Ownership of Certain Beneficial Owners and Management
and Related Shareholder Matters
Incorporated
by reference to “Information on Stock Ownership” in the definitive proxy
statement filed with the SEC relating to the registrant’s Annual Meeting of
Shareowners to be held April 25, 2007.
The
remaining information called for by this item relating to “Securities Authorized
for Issuance under Equity Compensation Plans” is incorporated by reference to
note 24 on pages 97 and 98 of the Annual Report to Shareowners for the
fiscal year ended December 31, 2006.
Item
13. Certain Relationships and Related Transactions,
and Director Independence
Incorporated
by reference to “Certain Relationships and Related Person Transactions” and
“Corporate Governance” in the registrant’s definitive proxy statement filed with
the SEC relating to its Annual Meeting of Shareowners to be held April 25,
2007.
Incorporated
by reference to “Independent Auditor” in the registrant’s definitive proxy
statement filed with the SEC relating to its Annual Meeting of Shareowners
to be
held April 25, 2007.
(24)
Part
IV
|
(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, 2006, a copy
of
which is attached as Exhibit 13.
|
|
Annual
Report
Page(s)
|
|
|
Statement
of earnings for the years ended December 31, 2006, 2005 and
2004
|
68
|
|
Consolidated
statement of changes in shareowners’ equity for the years
ended
December 31, 2006, 2005 and 2004
|
68
|
|
Statement
of financial position at December 31, 2006 and 2005
|
70
|
|
Statement
of cash flows for the years ended December 31, 2006, 2005 and
2004
|
72
|
|
Management’s
annual report on internal control over financial reporting
|
46
|
|
Report
of independent registered public accounting firm
|
47
|
|
Other
financial information:
|
|
|
Summary
of operating segments
|
53
|
|
Notes
to consolidated financial statements
|
74-108
|
|
Operating
segment information
|
52-56
100
108
|
|
Geographic
segment information
|
57
and 100
|
|
Operations
by quarter (unaudited)
|
107
|
|
(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) of General Electric’s Current
Report on Form 8-K dated April 27, 2000 (Commission file number
1-35)).
|
|
|
|
||
|
3(b)
|
The
By-Laws, as amended, of General Electric Company (Incorporated by
reference to Exhibit (3) of General Electric’s Current Report on Form 8-K
dated April 25, 2006 (Commission file number
1-35)).
|
|
|
|
||
|
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)).
|
|
(25)
|
|
||
|
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 GE and The Bank
of New
York, as trustee for the senior debt securities (Incorporated by
reference
to Exhibit 4(a) to GE’s Current Report on Form 8-K filed on January 29,
2003 (Commission file number 1-35)).
|
|
|
|
||
|
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 1-35)).
|
|
|
|
||
|
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.*
|
|
|
|
||
(26)
|
(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 1-35) 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 1-35) 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 1-35) for the fiscal
year
ended December 31, 1990).
|
||
|
|
|||
|
(d)
|
General
Electric 1987 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(k) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1987).
|
||
|
|
|||
|
(e)
|
General
Electric 1991 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(n) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1990).
|
||
|
|
|||
|
(f)
|
General
Electric 1994 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(o) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1993).
|
||
|
|
|||
|
(g)
|
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 1-35) for the fiscal
year
ended December 31, 2002).
|
||
|
|
|||
|
(h)
|
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 1-35) for the fiscal
year
ended December 31, 1993).
|
||
|
|
|||
|
(i)
|
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 1-35)).
|
||
|
|
|||
|
(j)
|
General
Electric 1995 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(t) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1995).
|
||
|
|
|||
|
(k)
|
General
Electric 1996 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(v) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1996).
|
||
|
|
|||
(27)
|
(l)
|
General
Electric 1997 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(t) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1997).
|
||
|
|
|||
|
(m)
|
General
Electric 1990 Long-Term Incentive Plan as restated and amended effective
August 1, 1997 (Incorporated by reference to Exhibit 10(u) to General
Electric Annual Report on Form 10-K (Commission file number 1-35)
for the
fiscal year ended December 31, 1997).
|
||
|
|
|||
|
(n)
|
General
Electric 1998 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(v) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1998).
|
||
|
|
|||
|
(o)
|
General
Electric 1999 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(v) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31,
1999).
|
||
|
|
|||
|
(p)
|
General
Electric 2000 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(u) to General Electric Annual Report on Form 10-K (Commission
file number 1-35) for the fiscal year ended December 31, 2000).
|
||
|
|
|||
|
(q)
|
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 1-35) for the fiscal
year
ended December 31, 2004).
|
||
|
|
|||
|
(r)
|
Form
of GE Executive Life Insurance Agreement provided to GE officers,
as
revised November 2003 (Incorporated by reference to Exhibit 10(r)
to the
General Electric Annual Report on Form 10-K (Commission file number
1-35)
for the fiscal year ended December 31, 2004).
|
||
|
|
|||
|
(s)
|
General
Electric 2001 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(x) to General Electric Report on Form 10-K (Commission
file
number 1-35) for the fiscal year ended December 31,
2001).
|
||
|
|
|||
|
(t)
|
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 1-35) for the fiscal year ended December
31,
2002).
|
||
|
|
|||
|
(u)
|
General
Electric 2003 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(x) to General Electric Report on Form 10-K (Commission
file
number 1-35) for the fiscal year ended December 31,
2002).
|
||
|
|
|||
|
(v)
|
Amendment
No. 1 to General Electric 1990 Long-Term Incentive Plan as restated
and
amended effective August 1, 1997 (Incorporated by reference to Exhibit
10(y) to General Electric Report on Form 10-K (Commission file number
1-35) for the fiscal year ended December 31, 2002).
|
||
|
|
|||
(28)
|
(w)
|
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 1-35) for the fiscal
year
ended December 31, 2004).
|
||
|
|
|||
|
(x)
|
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 1-35)
for the
fiscal year ended December 31, 2004).
|
||
|
|
|||
|
(y)
|
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 1-35) for the fiscal year ended December
31,
2004).
|
||
|
|
|||
|
(z)
|
General
Electric 2002 Executive Deferred Salary Plan (Incorporated by reference
to
Exhibit 10(z) to the General Electric Annual Report on Form 10-K
(Commission file number 1-35) for the fiscal year ended December
31,
2004).
|
||
|
|
|||
|
(aa)
|
Form
of Agreement for Stock Option Grants to Executive Officers under
the
General Electric 1990 Long Term Incentive Plan (Incorporated by reference
to Exhibit 10.1 of General Electric’s Current Report on Form 8-K dated
September 15, 2004 (Commission file number 1-35)).
|
||
|
|
|||
|
(bb)
|
Form
of Agreement for Annual Restricted Stock Unit Grants to Executive
Officers
under the General Electric 1990 Long Term Incentive Plan (Incorporated
by
reference to Exhibit 10.2 of General Electric’s Current Report on Form 8-K
dated September 15, 2004 (Commission file number
1-35)).
|
||
|
|
|||
|
(cc)
|
Form
of Agreement for RSU Career Retention Program Restricted Stock Unit
Grants
to Executive Officers under the General Electric 1990 Long Term Incentive
Plan (Incorporated by reference to Exhibit 10 of General Electric’s
Current Report on Form 8-K dated July 28, 2005 (Commission file number
1-35)).
|
||
|
|
|||
|
(dd)
|
Form
of Agreement for Long Term Performance Award Grants to Executive
Officers
under the General Electric 1990 Long Term Incentive Plan (Incorporated
by
reference to Exhibit 10(dd) to the General Electric Annual Report on
Form 10-K (Commission file number 1-35) for the fiscal year ended
December
31, 2005).
|
||
|
|
|||
|
(ee)
|
Form
of Agreement for Performance Stock Unit Grants to Executive Officers
under
the General Electric 1990 Long Term Incentive Plan (Incorporated
by
reference to Exhibit 10.5 of General Electric’s Current Report on Form 8-K
dated September 15, 2004 (Commission file number
1-35)).
|
||
|
|
|||
|
(ff)
|
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 1-35)).
|
||
|
|
|||
|
(11)
|
Statement
re Computation of Per Share Earnings.**
|
||
|
|
|||
(29)
|
(12)
|
Computation
of Ratio of Earnings to Fixed Charges.*
|
||
|
|
|||
|
(13)
|
GE’s
2006 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 incorporated by
reference
in each Prospectus constituting part of the Registration Statements
on
Form S-3 (Registration Nos. 33-50639, 33-39596, 33-39596-01, 33-29024,
333-59671, 333-120155, 333-72566 and 333-130117), on Form S-4
(Registration No. 333-107556), and on Form S-8 (Registration Nos.
333-01953, 333-42695, 333-74415, 333-83164, 333-98877, 333-94101,
333-65781, 333-88233, 333-117855, 333-99671 and
333-102111).*
|
||
|
|
|||
|
(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 1-35) for the
fiscal
year ended December 31, 1992).
|
||
|
|
|||
|
*
|
Filed
electronically herewith.
|
||
|
**
|
Information
required to be presented in Exhibit 11 is provided in note 9 to the
2006
Annual Report to Shareowners in accordance with the provisions of
FASB
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings
per Share.
|
||
(30)
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, 2006, 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 27th
day of February 2007.
|
General
Electric Company
(Registrant)
|
|||
|
|
|||
|
By
|
/s/
Keith S. Sherin
|
||
|
Keith
S. Sherin
Senior
Vice President, Finance and
Chief
Financial Officer
(Principal
Financial Officer)
|
(31)
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
27, 2007
|
|||
|
Keith
S. Sherin
Senior
Vice President, Finance and
Chief
Financial Officer
|
|||||
|
|
|||||
|
/s/
Philip D. Ameen
|
Principal
Accounting Officer
|
February
27, 2007
|
|||
|
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
27, 2007
|
(32)