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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file
number 811-01494
- -----------------------------------------------------------------
GENERAL ELECTRIC S&S PROGRAM MUTUAL FUND
- ------------------------------------------------------------------
(Exact name of registrant as specified in charter)
3001, SUMMER STREET,STAMFORD, CONNECTICUT, 06905
- -------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
GE ASSET MANAGEMENT INC,3001, SUMMER STREET,STAMFORD,CONNECTICUT, 06905
- ------------------------------------------------------------------
(Name and address of agent for service)
Registrant"s telephone number, including area code: 800-242-0134
----------------------------
Date of fiscal year end: 12/31
---------------------------
Date of reporting period: : 12/31/09
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ITEM 1. REPORTS TO STOCKHOLDERS.
S&S Program
Program Mutual Fund
Income Fund
Annual Report
December 31, 2009
[LOGO]
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Notes to Performance.................................... 1
Manager Reviews and Schedules of Investments
Program Mutual Fund................................... 2
Income Fund........................................... 11
Notes to Schedules of Investments....................... 29
Financial Statements
Financial Highlights.................................. 30
Statements of Assets and Liabilities.................. 32
Statements of Operations.............................. 33
Statements of Changes in Net Assets................... 34
Notes to Financial Statements......................... 35
Report of Independent Registered Public Accounting Firm. 47
Tax Information......................................... 48
Advisory Agreement Renewal.............................. 49
Additional Information.................................. 52
Investment Team......................................... 56
[GRAPHIC]
Information on the following performance pages relating to the GE S&S Program
Mutual Fund and GE S&S Income Fund (each a "Fund" and collectively the "Funds")
one year total return and Schedule of Investments is audited, all other
information, including the portfolio manager Q&A pages, is unaudited.
Total returns take into account changes in share price and assume reinvestment
of dividends and capital gains distributions, if any. Investment returns and
net asset value on an investment will fluctuate and you may have a gain or loss
when you sell your shares.
The performance data quoted represent past performance; past performance does
not guarantee future results. Investment return and principal value will
fluctuate so your shares, when redeemed, may be worth more or less than their
original cost. Current performance may be higher or lower than the performance
data quoted. Periods less than one year are not annualized.
An investment in a Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. An investment in a Fund is subject to risk, including
possible loss of principal invested.
The Standard & Poor's ("S&P") 500 Composite Index of stocks (S&P 500) and the
Barclays Capital U.S. Aggregate Bond Index are unmanaged indices and do not
reflect the actual cost of investing in the instruments that comprise each
index. S&P 500 is an unmanaged, market capitalization-weighted index of stocks
of 500 large U.S. companies, which is widely used as a measure of large-cap
stock market performance. Barclays Capital U.S. Aggregate Bond Index is a
market value-weighted index of taxable investment-grade debt issues, including
government, corporate, asset-backed and mortgage-backed securities, with
maturities of one year or more. The results shown for the foregoing indices
assume the reinvestment of net dividends or interest and are unaudited.
The peer universe of funds used in our peer ranking calculation is based on the
blend of Lipper peer categories, as shown. This blend is the same as the
category blend used by the Wall Street Journal. The actual number of funds and
numerical rankings in the Lipper and Wall Street Journal universes could differ
since the Wall Street Journal excludes certain funds, which do not meet their
net asset or number of shareholder publication thresholds. Lipper is an
independent mutual fund rating service. A Fund's performance may be compared to
or ranked within a universe of mutual funds with investment objectives and
policies similar but not necessarily identical to the Fund's. Such comparisons
or rankings are made on the basis of several factors, including the Fund's
objectives and policies, management style and strategy, and portfolio
composition, and may change over time if any of those factors change.
- -----------
GE Investment Distributors, Inc., Member of FINRA & SIPC, is the principal
underwriter and distributor of the GE S&S Program Mutual Fund and the GE S&S
Income Fund, and a wholly owned subsidiary of GE Asset Management Incorporated,
the investment adviser of the Funds.
1
[GRAPHIC]
[PHOTO]
George A. Bicher
[PHOTO]
Stephen V. Gelhaus
[PHOTO]
Thomas R. Lincoln
[PHOTO]
Paul C. Reinhardt
The GE S&S Program Mutual Fund is managed by a team of portfolio managers that
includes George A. Bicher, Stephen V. Gelhaus, Thomas R. Lincoln, and Paul C.
Reinhardt. Each of the foregoing portfolio managers manages (or co-manages) one
of three sub-portfolios, which comprise the Fund. A sub-portfolio refers to the
portion of the Fund's assets that are allocated to, and managed by, a
particular portfolio manager on the Fund's portfolio management team. The three
sub-portfolios are managed independently of each other and the portfolio
managers have full discretion over their sub-portfolio. The weightings to each
sub-portfolio in the Fund, which can be changed at any time but generally
remain stable for 18 to 24 months, are driven by the objective of keeping the
Fund "style neutral" such that it combines both growth and value investment
management styles and does not tend to favor either style.
George A. Bicher is a Senior Vice President of GE Asset Management Incorporated
(GEAM). Mr. Bicher is Director of the U.S. Equity Research Team and has been a
portfolio manager for the GE S&S Program Mutual Fund since January 2007.
Mr. Bicher has held the position of equity research analyst since joining GEAM
in June 2002. Prior to joining GEAM, he served in a number of positions at
Deutsche Banc Alex Brown since 1994.
Stephen V. Gelhaus is a Vice President of GEAM. He has been a member of the
portfolio management team for the GE S&S Program Mutual Fund since January
2002. Mr. Gelhaus joined GEAM in June 1991 and was a research analyst in U.S.
Equities from 1995 through 2001 and became an associate portfolio manager at
GEAM in 1999.
Thomas R. Lincoln is a Senior Vice President of GEAM. He has served on the
portfolio management team for the GE S&S Program Mutual Fund since May 2007.
Mr. Lincoln joined GEAM in 1994 as a financial analyst in U.S. Equities.
Mr. Lincoln became part of the investment management team for U.S. Equities at
GEAM in 1997 and a portfolio manager for U.S. Equities in 2003.
Paul C. Reinhardt is a Senior Vice President of GEAM. He has been a member of
the portfolio management team for the GE S&S Program Mutual Fund since January
2001. Mr. Reinhardt joined GEAM in 1982 as an equity analyst and has been a
portfolio manager since 1987.
Q. How did the GE S&S Program Mutual Fund perform compared to its benchmark and
Morningstar peer group for the twelve-month period ended December 31, 2009?
A. For the twelve-month period ended December 31, 2009, the GE S&S Program
Mutual Fund returned 32.71%. The S&P 500 Index, the Fund's benchmark,
returned 26.46% and the Fund's Morningstar peer group of 1,789 U.S. Large
Growth funds returned an average of 35.22% for the same period.
Q. What market conditions impacted Fund performance?
A. The U.S. equity markets fell sharply through early March against a backdrop
of severe global economic
recession, falling home prices, and the
2
[GRAPHIC]
prospect of huge losses by global financial institutions. After the U.S.
government passed a $790 billion stimulus bill and the Federal Reserve
announced plans to pump $1.25 trillion into the economy, the S&P 500 rallied
67% through year-end off its March 9 intraday low. In addition to the
unprecedented fiscal and monetary stimulus, stocks were supported by
earnings reports in the second and third quarter that generally beat
expectations, a pick-up in corporate acquisition activity, and strong free
cash flow as companies cut capital spending and reduced their cost
structures. Despite this strong snap-back, the S&P 500 still remained 29%
below the high it reached in October 2007. The federal funds target rate has
remained historically low--close to zero--for a full year, and the U.S.
equity markets have applauded the Federal Reserve's pledge to keep interest
rates low for an "extended period."
Sector allocation has been important in this environment, as only the
technology (+62%), materials (+49%), and consumer discretionary
(+42%) sectors outperformed the S&P 500 in 2009 while the more defensive
sectors lagged. Despite a 78% rise in the WTI crude price over the year, the
S&P 500 Energy sector rose only 14% in 2009, well below the 26.5% rally of
the broader S&P 500 Index. In this context, the growth style of investing
outperformed the value style, with the strongest returns coming from medium
capitalization companies. Careful stock selection was warranted in the
financials sector, which plummeted 29% in the first quarter but advanced a
whopping 140% off of March lows, reflecting relief that the sector would
remain intact. This was reinforced by the fact that most large U.S. banks
passed their stress tests and credit markets strengthened. By year-end,
several large commercial and investment banks had reimbursed the U.S.
Treasury for the government TARP investments. Going forward, we do not
expect the markets to simply reward survivorship with performance since
earnings estimate achievability should matter more prospectively.
Q. What were the primary drivers of Fund performance?
A. Strong stock selection among energy companies was a key driver of Fund
performance, despite the fact that the sector overall showed lackluster
performance. Emphasizing energy services companies over the large integrated
oil companies paid off amid weak end market demand in refining and
marketing. Transocean (+89%) and Schlumberger (+56%) were key contributors
and continued to be held at year-end. Good stock selection in financials
also benefited the Fund, as large positions in CME Group (+64%), Goldman
Sachs (+103%) and several life insurance companies outperformed the market.
One theme for these holdings was financial strength and the ability to take
market share and emerge from the recession as a stronger competitor.
A beneficial underweight in the defensive consumer staples sector was
another driver to Fund performance, as this group underperformed the market
averages. Later in the year, Proctor Gamble was increased to an overweight
and averaged a 15% return during the period it was held. Other key
single-stock contributors included Genentech, which rallied 14% on Roche's
acquisition bid, and Freeport
3
[GRAPHIC]
McMoRan Copper & Gold (+229%) which surged along with copper prices during
the year. The strength in Genentech--an out of benchmark holding--was enough
to offset weakness in some of our other health care holdings, including
Amgen (-2%) and Gilead (-15%) as biotech companies broadly underperformed.
Consumer discretionary and technology were the only two sectors to detract
from relative performance this year. In consumer discretionary, the Fund
missed strong recovery rallies in Internet retailers (e.g., Amazon and
Expedia which proved too expensive for ownership) and automobile stocks,
which generally lacked the degree of quality we seek in long term holdings.
In the media sector, Comcast (+1%) also underperformed amid disappointing
subscription growth. Within technology, while the Fund enjoyed strength in
many of its diverse holdings, an underweight in Apple (+147%) created the
main drag.
Q. Were there any significant changes to the Fund over the period?
A. We continued to seek large cap, high quality companies that we felt had the
potential to survive and grow market share during the down-cycle, and in a
gradual recovery. We maintained a consistent emphasis on companies with
strong balance sheets and
earnings stability, over more cyclical or leveraged opportunities. We took
advantage of relative underperformance in high-quality brand-name companies,
to add several new positions during the year; among the positions
established were Baxter International, Johnson & Johnson and Proctor &
Gamble. We reduced our holdings in technology--selling Affiliated Computer
Systems and several semiconductor companies--although technology remained
the Fund's largest sector position. We took advantage of relative weakness
in energy to boost our exposure to that sector, which we believe faces
tremendous long-term supply-demand imbalances. At year-end, the Fund's
largest overweights were in technology, health care and financials, and the
largest underweights were in consumer staples, industrials and utilities.
Valuations for many companies remain attractive, even after the strong
rebound from March through year-end. While lower quality companies
outperformed during the rally, we believe any future market rally will be
dominated by outperformance by market share winners with strong balance
sheets and management teams. Amid rapidly changing market conditions we have
maintained our bottom-up stock selection approach with focus on a long-term
investment horizon.
4
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Understanding Your Fund's Expenses
As a shareholder of the Fund you incur ongoing expenses, which include
portfolio management fees, professional fees, administrative fees and other
Fund expenses. The following example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in the share class of the Fund during the
period. The information in the following table is based on an investment of
$1,000, which is invested at the beginning of the period and held for the
entire six-month period ended December 31, 2009.
Actual Expenses
The first section of the table provides information about actual account values
and actual expenses. You may use the information in this section, together with
the amount you invested, to estimate the expenses that you paid over the
period. To do so, simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number given for the share class under the heading "Expenses Paid During
Period."
Hypothetical Example for Comparison Purposes
The second section of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholders reports of other funds.
Please note that the expenses shown in the table do not reflect any transaction
costs, such as sales charges or redemption fees.
July 1, 2009 - December 31, 2009
------------------------------------------------------------------------
Account value at Account value Expenses
the beginning of at the end of paid during
the period ($) the period ($) the period ($)*
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Actual Fund Return** 1,000.00 1,195.87 1.05
------------------------------------------------------------------------
Hypothetical 5% Return
(2.5% for the period) 1,000.00 1,023.97 0.97
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*Expenses are equal to the Fund's annualized expense ratio of 0.19% (for the
period July 1, 2009--December 31, 2009), multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the six-month period)
**Actual Fund Return for the six-month period ended December 31, 2009 is as
follows: 19.59%.
5
[GRAPHIC]
Change in Value of a $10,000 Investment
[CHART]
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2009
----------------------------------------------------------
One Five Ten
Year Year Year
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GE S&S Program Mutual Fund 32.71% 2.18% 1.03%
S&P 500 Index 26.46% 0.42% -0.96%
[GRAPHIC]
Investment Profile
A Mutual Fund designed for investors who seek long-term growth of capital and
income by investing primarily in a diversified portfolio of common and
preferred stocks and other types of equity securities of U.S. companies.
Morningstar Performance Comparison
US OE Large Growth Peer Group
Based on average annual returns
for periods ended 12/31/09
One Five Ten
Year Year Year
Fund's rank in peer group:.............. 1,083 356 88
Number of Funds in peer group:.......... 1,789 1,270 694
Peer group average annual total return:. 35.22% 0.63% -3.43%
Morningstar category in peer group: Large Growth
TOP TEN HOLDINGS
AS OF DECEMBER 31, 2009
AS A % OF MARKET VALUE
-----------------------------------
Microsoft Corp. 3.43%
-----------------------------------
PepsiCo, Inc. 2.92%
-----------------------------------
Amgen Inc. 2.71%
-----------------------------------
Cisco Systems, Inc. 2.48%
-----------------------------------
The Goldman Sachs Group, Inc 2.33%
-----------------------------------
QUALCOMM Inc. 2.33%
-----------------------------------
International Business
Machines Corp. 2.17%
-----------------------------------
Schlumberger Ltd. 2.07%
-----------------------------------
JPMorgan Chase & Co. 1.95%
-----------------------------------
State Street Corp. 1.91%
-----------------------------------
See Notes to Performance on page 1 for further information, including an
explanation of Morningstar peer categories.
Past performance does not predict future performance and the graph and table do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
6
GE S&S Program Mutual Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
GE S&S Program Mutual Fund
Portfolio Composition as a % of the Market Value of $3,719,878 as of
December 31, 2009.
[CHART]
Number
of Shares Value
Common Stock -- 98.7%+
---------------------------------------------------------
Aerospace & Defense -- 3.2%
Alliant Techsystems, Inc..... 96,455 $ 8,514 /(a)/
CAE, Inc..................... 2,006,368 16,784
Hexcel Corp.................. 559,530 7,263 /(a)/
Honeywell International Inc.. 772,245 30,272
ITT Corp..................... 454,684 22,616
Rockwell Collins, Inc........ 296,310 16,404
United Technologies Corp..... 268,414 18,631
120,484
Beverages -- 3.2%
Brown-Forman Corp. (Class B). 21,391 1,146
Molson Coors Brewing Co.
(Class B)................... 213,118 9,624
PepsiCo, Inc................. 1,787,483 108,679
119,449
Biotechnology -- 4.5%
Amgen Inc.................... 1,782,976 100,863 /(a)/
Gilead Sciences, Inc......... 1,516,917 65,652 /(a)/
166,515
Number
of Shares Value
Capital Markets -- 5.8%
Ameriprise Financial, Inc...... 445,502 $ 17,294
Morgan Stanley................. 353,665 10,468
State Street Corp.............. 1,635,208 71,197 /(e)/
The Bank of New York
Mellon Corp................... 781,747 21,865
The Charles Schwab Corp........ 479,385 9,022
The Goldman Sachs Group, Inc... 513,070 86,627
216,473
Chemicals -- 2.4%
Air Products & Chemicals, Inc.. 20,095 1,629
Monsanto Co.................... 501,189 40,972
Potash Corp of
Saskatchewan Inc.............. 136,644 14,826
Praxair, Inc................... 290,850 23,358
The Mosaic Company............. 125,197 7,478
88,263
Commercial Banks -- 0.5%
Regions Financial Corp......... 1,386,553 7,335
US Bancorp..................... 359,110 8,084
Wells Fargo & Co............... 136,045 3,672
19,091
Commercial Services & Supplies -- 0.9%
Corrections Corporation
of America.................... 692,785 17,008 /(a)/
Iron Mountain Inc.............. 733,496 16,694 /(a)/
33,702
Communications Equipment -- 6.3%
Cisco Systems, Inc............. 3,853,745 92,259 /(a)/
Motorola, Inc.................. 180,851 1,403
QUALCOMM Inc................... 1,872,092 86,603
Research In Motion Ltd......... 776,134 52,420 /(a)/
232,685
Computers & Peripherals -- 3.9%
Apple Inc...................... 27,716 5,844 /(a)/
Hewlett-Packard Co............. 1,108,368 57,092
International Business
Machines Corp................. 617,982 80,894
143,830
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See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
7
GE S&S Program Mutual Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Number
of Shares Value
Consumer Finance -- 0.3%
Capital One Financial Corp... 294,426 $ 11,288
Diversified Financial Services -- 5.0%
Bank of America Corp......... 3,957,693 59,603
CME Group Inc................ 160,513 53,924
JPMorgan Chase & Co.......... 1,741,127 72,553
186,080
Diversified Telecommunication Services -- 1.1%
AT&T Inc..................... 1,000,261 28,037
Verizon Communications Inc... 397,214 13,160
41,197
Electric Utilities -- 1.4%
Edison International......... 557,433 19,388
Entergy Corp................. 120,569 9,867
FPL Group, Inc............... 198,778 10,499
Northeast Utilities.......... 550,028 14,185
53,939
Electrical Equipment -- 0.9%
ABB Ltd. ADR................. 1,237,248 23,631 /(a)/
Emerson Electric Co.......... 274,788 11,706
35,337
Electronic Equipment, Instruments & Components -- 0.6%
Corning Inc.................. 1,159,876 22,397
Energy Equipment & Services -- 4.1%
Halliburton Co............... 610,632 18,374
National Oilwell Varco, Inc.. 219,252 9,667 /(a)/
Schlumberger Ltd............. 1,183,757 77,051
Transocean Ltd............... 562,052 46,538 /(a)/
151,630
Food & Staples Retailing -- 0.1%
CVS Caremark Corp............ 160,757 5,178
Food Products -- 1.4%
Archer-Daniels-Midland Co.... 159,831 5,004
Kraft Foods Inc. (Class A)... 388,674 10,564
Number
of Shares Value
McCormick & Company Inc... 725,975 $ 26,229
Nestle S.A. ADR........... 198,353 9,590
51,387
Healthcare Equipment & Supplies -- 4.6%
Baxter International Inc.. 443,429 26,020
Becton Dickinson & Co..... 219,104 17,279
Boston Scientific Corp.... 868,482 7,816 /(a)/
Covidien PLC.............. 1,311,362 62,801
Hologic, Inc.............. 679,909 9,859 /(a)/
Medtronic, Inc............ 579,160 25,471
ResMed, Inc............... 427,802 22,361 /(a)/
171,607
Healthcare Providers & Services -- 2.7%
Aetna Inc................. 287,994 9,129
Cardinal Health, Inc...... 576,411 18,583
Express Scripts, Inc...... 481,412 41,618 /(a)/
McKesson Corp............. 94,249 5,891
UnitedHealth Group, Inc... 885,065 26,977
102,198
Hotels Restaurants & Leisure -- 0.5%
Carnival Corp............. 529,530 16,781 /(a)/
Household Durables -- 0.1%
MDC Holdings, Inc......... 62,850 1,951
Household Products -- 2.3%
Clorox Co................. 92,435 5,639
Kimberly-Clark Corp....... 174,024 11,087
The Procter & Gamble Co... 1,142,561 69,273
85,999
Industrial Conglomerates -- 0.5%
Siemens AG ADR............ 60,285 5,528
Textron, Inc.............. 706,756 13,294
18,822
Insurance -- 3.2%
ACE Ltd................... 532,324 26,829
AFLAC Inc................. 416,500 19,263
AON Corp.................. 262,865 10,078
MetLife, Inc.............. 519,327 18,358
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See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
8
GE S&S Program Mutual Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Number
of Shares Value
PartnerRe Ltd................... 144,683 $ 10,802
Principal Financial Group, Inc.. 442,078 10,628
Prudential Financial, Inc....... 498,142 24,788
120,746
Internet Software & Services -- 1.4%
AOL Inc......................... 131,145 3,053 /(a)/
Baidu, Inc ADR.................. 34,874 14,341 /(a)/
Google Inc. (Class A)........... 56,994 35,335 /(a)/
52,729
IT Services -- 3.7%
Accenture PLC................... 56,265 2,335
Cognizant Technology Solutions
Corp. (Class A)................ 367,180 16,633 /(a)/
Paychex, Inc.................... 332,171 10,178
The Western Union Co............ 3,465,549 65,326
Visa, Inc. (Class A)............ 479,927 41,974
136,446
Life Sciences Tools & Services -- 0.9%
Life Technologies Corp.......... 235,397 12,295 /(a)/
Thermo Fisher Scientific, Inc... 450,860 21,502 /(a)/
33,797
Machinery -- 1.1%
Deere & Co...................... 326,840 17,679
Eaton Corp...................... 292,429 18,604
Navistar International Corp..... 151,046 5,838 /(a)/
42,121
Media -- 4.1%
Comcast Corp. (Class A)......... 144,970 2,321
DIRECTV (Class A)............... 646,671 21,566 /(a)/
Liberty Global, Inc. (Series C). 594,772 12,996 /(a)/
Omnicom Group Inc............... 1,494,970 58,528
The Walt Disney Co.............. 439,608 14,177
Time Warner Inc................. 1,442,599 42,037
151,625
Metals & Mining -- 1.6%
Allegheny Technologies Inc...... 614,936 27,531
Barrick Gold Corp............... 255,704 10,070
Freeport-McMoRan Copper &
Gold Inc....................... 268,808 21,583 /(a)/
59,184
Number
of Shares Value
Multiline Retail -- 1.2%
Kohl's Corp.................. 137,917 $ 7,438 /(a)/
Target Corp.................. 769,160 37,204
44,642
Multi-Utilities -- 0.5%
Dominion Resources, Inc...... 495,788 19,296
Oil, Gas & Consumable Fuels -- 7.7%
Apache Corp.................. 251,200 25,916
Chesapeake Energy Corp....... 112,530 2,912
Chevron Corp................. 604,345 46,529
Devon Energy Corp............ 458,750 33,718
Exxon Mobil Corp............. 984,371 67,124
Marathon Oil Corp............ 1,413,640 44,134
Occidental Petroleum Corp.... 338,079 27,503
Southwestern Energy Co....... 397,878 19,178 /(a)/
Suncor Energy Inc............ 544,388 19,222
286,236
Paper & Forest Products -- 0.3%
Weyerhaeuser Co.............. 241,137 10,403
Personal Products -- 0.1%
Avon Products, Inc........... 80,378 2,532
Pharmaceuticals -- 2.9%
Abbott Laboratories.......... 117,607 6,350 /(h)/
Bristol-Myers Squibb Co...... 1,721,340 43,464
Johnson & Johnson............ 462,175 29,769
Merck & Company Inc.......... 86,092 3,146
Pfizer Inc................... 1,384,469 25,183
107,912
Real Estate Management & Development -- 0.3%
CB Richard Ellis Group, Inc.
(Class A)................... 898,068 12,187 /(a)/
Road & Rail -- 0.8%
Union Pacific Corp........... 441,520 28,213
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
9
GE S&S Program Mutual Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Number
of Shares Value
Semiconductors & Semiconductor Equipment -- 2.2%
Intel Corp....................... 2,624,835 $ 53,547
Kla-Tencor Corp.................. 50,307 1,819
Microchip Technology Inc......... 218,867 6,360
Nvidia Corp...................... 160,756 3,003 /(a)/
Taiwan Semiconductor
Manufacturing Company
Ltd. ADR........................ 875,179 10,012
Texas Instruments Inc............ 307,127 8,004
82,745
Software -- 4.3%
Intuit, Inc...................... 570,495 17,520 /(a)/
Microsoft Corp................... 4,181,755 127,502
Oracle Corp...................... 557,280 13,676
158,698
Specialty Retail -- 2.9%
Bed Bath & Beyond, Inc........... 1,076,725 41,594 /(a)/
Lowe's Companies, Inc............ 2,566,122 60,022
Staples, Inc..................... 288,704 7,099
108,715
Textiles Apparel & Luxury Goods -- 0.1%
NIKE, Inc. (Class B)............. 32,151 2,124
Tobacco -- 0.9%
Altria Group, Inc................ 197,071 3,869
Philip Morris International Inc.. 644,320 31,050
34,919
Wireless Telecommunication Services -- 2.2%
American Tower Corp. (Class A)... 567,199 24,509 /(a)/
NII Holdings, Inc................ 1,654,978 55,574 /(a)/
80,083
Total Common Stock
(Cost $3,400,458)............... 3,671,636
Number
of Shares Value
Preferred Stock -- 0.4%
------------------------------------------------------------
Diversified Financial Services
Bank of America Corp.
(Cost $14,430) 961,964 $ 14,353 /(a)/
Total Investments in Securities
(Cost $3,414,888).............. 3,685,989
Principal
Amount Value
------------------------------------------------------------
Short-Term Investments -- 0.9%
------------------------------------------------------------
Repurchase Agreement -- 0.9%
State Street Corp.
0.01% 01/04/10.................. $ 33,889 $ 33,889 /(e)/
(Cost $33,889)
Total Investments
(Cost $3,448,777).............. 3,719,878
Other Assets and Liabilities,
net -- 0.0%*................... 754
----------
NET ASSETS -- 100.0%............ $3,720,632
==========
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
10
[GRAPHIC]
[PHOTO]
Paul M. Colonna
The GE S&S Income Fund is managed by a team of portfolio managers that includes
Paul M. Colonna, William M. Healey, Mark H. Johnson and Vita Marie Pike. As
lead portfolio manager for the Fund, Mr. Colonna has oversight authority over
the Fund.
Paul M. Colonna is the President and Chief Investment Officer - Fixed Income
and a Director at GEAM. Since January 2005, he has led the team of portfolio
managers for the GE S&S Income Fund, as well as other fixed income funds
managed by GEAM. Mr. Colonna became President --Fixed Income in March 2007.
Prior to joining GEAM in February 2000, Mr. Colonna was a senior portfolio
manager with the Federal Home Loan Mortgage Corporation, overseeing the
Mortgage Investment Group.
William M. Healey is a Senior Vice President of GEAM. He has served on the
portfolio management team for the GE S&S Income Fund since joining GEAM in
1996. Prior to joining GEAM, Mr. Healey spent over 10 years in the fixed income
group at MetLife.
Mark H. Johnson is a Senior Vice President of GEAM and a senior portfolio
manager of Structured Products. He has been a member of the portfolio
management team for the GE S&S Income Fund since September 2007. Mr. Johnson
joined GE in 1998 in its Employers Reinsurance Corporation as a taxable income
portfolio manager. Mr. Johnson joined GEAM as a Vice President and portfolio
manager in 2002 and became a Senior Vice President and senior portfolio manager
of Structured Products in 2007.
Vita Marie Pike is a Senior Vice President of GEAM. She has served on the
portfolio management team for the GE S&S Income Fund since June 2004. Prior to
joining GEAM in January 2001, she was with Alliance Capital for over nine years
serving in a number of different capacities including portfolio manager.
Q. How did the GE S&S Income Fund perform compared to its benchmark and
Morningstar peer group for the twelve-month period ended December 31, 2009?
A. For the twelve-month period ended December 31, 2009, the GE S&S Income Fund
returned 7.80%. The Barclays Capital U.S. Aggregate Bond Index, the Fund's
benchmark, returned 5.93% and the Fund's Morningstar peer group of 1,126 US
Intermediate-Term Bond funds returned an average of 13.47% for the same
period.
Q. Describe what happened in the U.S. economy during the twelve-month period
ended December 31, 2009.
A. Financial markets rallied strongly beginning in March 2009 as policymakers
around the world kept the liquidity pump primed and the global economy began
recovering from the recession in 2008. GDP growth in the U.S. turned
positive in the third quarter, while unemployment continued to rise ending
the year at 10%. The U.S. lost over 4 million jobs in 2009 (reported by the
Bureau of Labor Statistics). Government support
11
[GRAPHIC]
programs targeting the auto (Cash for Clunkers) and housing (first-time
homebuyer tax credits) industries created demand which boosted second half
growth.
Central banks around the globe kept interest rates low throughout the year.
The Federal Reserve held its federal funds target at 0-0.25% and finished
the year with a balance sheet over $2.2 trillion, 2 1/2 times its size
prior to the financial crisis in August 2007. In the statement from its
final meeting in December, the Federal Open Market Committee (FOMC) repeated
that "economic conditions...are likely to warrant exceptionally low levels
of the federal funds rate for an extended period." Quantitative easing
measures including the purchase of $1.25 trillion of agency mortgage-back
securities (MBS) and $175 billion of agency debt are scheduled to wind down
early in 2010 along with many of the special liquidity facilities given the
improvement in the financial markets.
The improving fundamental backdrop created a performance environment in
which non-government related issues (corporate, commercial MBS,
asset-backed) outperformed U.S. government securities including agency
mortgage-backed securities. Interest rates rose across the maturity spectrum
in 2009 producing negative total returns for U.S. treasuries. The U.S.
treasury 2-year and 10-year note yield ended the year at 1.14% and 3.84%
respectively, up 38 basis points (bps) and 163 bps. Default expectations
tumbled as economic activity recovered and credit spreads collapsed from
March highs. Lower quality credit rewarded investors with outsized returns.
The high yield market returned over 58% compared to high grade credit which
gained just over 16%. Commercial mortgage-backed and asset-backed securities
also performed strongly, up 28.5% and 24.7% respectively, with help from the
Term Asset-Backed Loan Facility (TALF) program.
Q. What were the primary drivers of Fund performance?
A. The primary drivers of Fund performance in 2009 were sector allocation and
duration positioning. The Fund's allocation to high yield and emerging
market debt had a large positive impact on total return as those two sectors
far outpaced the return of the benchmark. Overweight positions in high grade
credit and commercial MBS during the second half of the year also
contributed positively as yield spreads narrowed. Duration positioning added
to relative return, particularly in December when interest rates rose and
the fund's duration was short relative to the benchmark.
12
[GRAPHIC]
Understanding Your Fund's Expenses
As a shareholder of the Fund you incur ongoing expenses, which include
portfolio management fees, professional fees, administrative fees and other
Fund expenses. The following example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in the share class of the Fund during the
period. The information in the following table is based on an investment of
$1,000, which is invested at the beginning of the period and held for the
entire six-month period ended December 31, 2009.
Actual Expenses
The first section of the table provides information about actual account values
and actual expenses. You may use the information in this section, together with
the amount you invested, to estimate the expenses that you paid over the
period. To do so, simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number given for the share class under the heading "Expenses Paid During
Period."
Hypothetical Example for Comparison Purposes
The second section of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5%
hypothetical example with the 5% hypothetical examples that appear in the
shareholders reports of other funds.
Please note that the expenses shown in the table do not reflect any transaction
costs, such as sales charges or redemption fees.
July 1, 2009 - December 31, 2009
--------------------------------------------------------------------
Account value at Account value Expenses
the beginning of at the end of paid during
the period ($) the period ($) period ($)*
--------------------------------------------------------------------
Actual Fund Return** 1,000.00 1,064.21 0.99
--------------------------------------------------------------------
Hypothetical 5% Return
(2.5% for the period) 1,000.00 1,023.97 0.97
--------------------------------------------------------------------
*Expenses are equal to the Fund's annualized expense ratio of 0.19% (for the
period July 1, 2009 - December 31, 2009), multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the six-month period)
**Actual Fund Return for the six-month period ended December 31, 2009 is as
follows: 6.42%.
13
[GRAPHIC]
Change in Value of a $10,000 Investment
[CHART]
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2009
--------------------------------------------------------
One Five Ten
Year Year Year
--------------------------------------------------------
GE S&S Income Fund 7.80% 3.84% 5.70%
Barclays Capital U.S. Aggregate Bond
Index 5.93% 4.97% 6.33%
[GRAPHIC]
Investment Profile
A Mutual Fund designed for investors who seek a high interest rate of return
over a long-term period consistent with the preservation of capital by
investing at least 80% of its net assets under normal circumstances in debt
securities. The Fund invests primarily in a variety of investment-grade debt
securities, such as U.S. Government securities, mortgage-backed securities,
corporate bonds and money market instruments.
Morningstar Performance Comparison
US OE Intermediate-Term Bond Peer Group
Based on average annual returns for periods
ended 12/31/09
One Five Ten
Year Year Year
Fund's rank in peer group:.............. 911 531 234
Number of Funds in peer group:.......... 1,126 866 496
Peer group average annual total return:. 13.47% 3.62% 5.18%
Morningstar Category in peer group: Intermediate-Term Bond
QUALITY RATINGS AS OF DECEMBER 31, 2009
AS A % OF MARKET VALUE
--------------------------------
Moody's/S&P/ Percentage of
Fitch Rating* Market Value
--------------------------------
Aaa / AAA 62.44%
--------------------------------
Aa / AA 3.43%
--------------------------------
A / A 14.81%
--------------------------------
Baa / BBB 9.55%
--------------------------------
Ba / BB and lower 9.77%
--------------------------------
100.00%
--------------------------------
*Moody's Investors Services Inc, Standard & Poor's and Fitch are nationally
recognized statistical rating organizations.
See Notes to Performance on page 1 for further information, including an
explanation of Morningstar peer categories. Past performance does not predict
future performance and the graph and table do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares.
14
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
GE S&S Income Fund
Portfolio Composition as a % of the Market Value of $2,531,281 as of
December 31, 2009.
[CHART]
Principal
Amount Value
Bonds and Notes -- 94.0%+
---------------------------------------------------------
U.S. Treasuries -- 20.7%
U.S. Treasury Bonds
4.50% 08/15/39............ $ 74,630 $ 72,939
U.S. Treasury Notes
0.02% 11/30/11............ 84,028 83,479 /(d)/
0.05% 01/31/11............ 11,298 11,334 /(d)/
1.00% 10/31/11............ 79,207 79,136 /(d)/
1.25% 11/30/10............ 1,400 1,410
1.75% 08/15/12............ 16,105 16,209
2.13% 11/30/14............ 151,399 147,815
3.38% 11/15/19............ 82,678 79,527 /(h)/
4.50% 11/15/10............ 429 444
4.63% 10/31/11............ 11,970 12,747
505,040
Agency Mortgage Backed -- 24.0%
Federal Home Loan
Mortgage Corp.
4.50% 06/01/33 - 02/01/35. 897 899 /(h)/
5.00% 07/01/35............ 3,874 3,984 /(h)/
Principal
Amount Value
5.50% 05/01/20 - 04/01/39. $ 41,080 $ 43,324 /(h)/
6.00% 04/01/17 - 11/01/37. 24,918 26,526 /(h)/
6.50% 07/01/29............ 78 85 /(h)/
7.00% 10/01/16 - 08/01/36. 2,679 2,941 /(h)/
7.50% 09/01/12 - 09/01/33. 449 495 /(h)/
8.00% 11/01/30............ 12 13 /(h)/
8.50% 04/01/30 - 05/01/30. 37 43 /(h)/
9.00% 05/01/16 - 11/01/16. 139 155 /(h)/
5.50% TBA................. 18,645 19,531 /(c)/
Federal National
Mortgage Assoc.
4.00% 05/01/19 - 06/01/19. 3,394 3,469 /(h)/
4.50% 05/01/18 - 12/01/34. 14,562 14,987 /(h)/
5.00% 07/01/20 - 05/01/39. 22,858 23,535 /(h)/
5.47% 04/01/37............ 173 181 /(i)/
5.50% 01/01/14 - 12/01/38. 187,519 197,204 /(h)/
5.81% 03/01/37............ 179 188 /(i)/
6.00% 02/01/14 - 11/01/39. 109,610 117,059 /(h)/
6.50% 01/01/14 - 08/01/36. 6,790 7,327 /(h)/
7.00% 08/01/13 - 02/01/34. 688 749 /(h)/
7.50% 08/01/13 - 03/01/34. 2,565 2,891 /(h)/
8.00% 12/01/11 - 11/01/33. 1,403 1,598 /(h)/
8.50% 04/01/30 - 05/01/31. 193 222 /(h)/
9.00% 01/01/14 - 12/01/22. 842 936 /(h)/
4.50% TBA................. 6,855 6,842 /(c)/
5.00% TBA................. 7,777 8,127 /(c)/
5.50% TBA................. 12,502 13,196 /(c)/
6.00% TBA................. 47,888 50,717 /(c)/
6.50% TBA................. 6,768 7,248 /(c)/
7.00% TBA................. 3,690 4,043 /(c)/
Government National
Mortgage Assoc.
3.63% 08/20/23 - 09/20/24. 16 16 /(h,i)/
4.13% 11/20/21 - 10/20/25. 18 18 /(h,i)/
4.38% 05/20/21 - 04/20/24. 21 22 /(h,i)/
4.50% 08/15/33 - 09/15/34. 4,676 4,714 /(h)/
5.00% 08/15/33............ 1,601 1,659 /(h)/
6.00% 04/15/27 - 09/15/36. 4,178 4,451 /(h)/
6.50% 04/15/19 - 09/15/36. 6,265 6,715 /(h)/
7.00% 03/15/12 - 10/15/36. 2,857 3,106 /(h)/
7.50% 11/15/22 - 10/15/33. 776 873 /(h)/
8.00% 11/15/29 - 06/15/30. 13 15 /(h)/
8.50% 10/15/17............ 470 514 /(h)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
15
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
9.00% 11/15/16 - 12/15/21. $ 1,328 $ 1,487 /(h)/
5.50% TBA................. 1,900 1,990 /(c)/
584,095
Agency Collateralized Mortgage Obligations -- 2.4%
Collateralized Mortgage
Obligation Trust (Class B)
9.24% 11/01/18............ 211 158 /(d,f,h,l)/
Federal Home Loan
Mortgage Corp.
0.00% 11/15/37............ 4,712 3,828 /(g,m)/
0.17% 09/25/43............ 16,420 181 /(g,h,i,m)/
0.62% 09/15/34............ 2,361 1,788 /(d,f)/
4.50% 11/15/13 - 03/15/19. 4,162 331 /(g,h,m)/
5.00% 10/15/14 - 12/01/34. 7,489 625 /(g,h,m)/
5.00% 05/15/38............ 2,200 2,167
5.50% 04/15/17 - 06/15/33. 4,055 683 /(g,h,m)/
7.50% 01/15/16............ 154 157 /(h)/
7.50% 07/15/27............ 57 11 /(g,h,m)/
8.00% 04/15/20............ 148 159 /(h)/
8.00% 02/01/23 - 07/01/24. 152 34 /(g,h,m)/
Federal Home Loan Mortgage
Corp. REMIC
6.01% 12/15/39............ 7,197 753 /(g,i,m)/
6.36% 05/15/36............ 17,586 2,400 /(g,i,m)/
6.97% 02/15/36............ 14,371 2,096 /(g,i,m)/
7.47% 04/15/36............ 16,602 2,387 /(g,i,m)/
Federal Home Loan
Mortgage STRIPS
9.46% 08/01/27............ 39 31 /(d,f,h)/
Federal National
Mortgage Assoc.
1.20% 12/25/42............ 2,769 132 /(g,h,i,m)/
4.50% 11/25/13 - 05/25/18. 834 23 /(g,h,m)/
4.75%** 11/25/14............ 48 -- /(g,h,m)/
5.00% 08/25/17 - 02/25/32. 5,707 685 /(g,h,m)/
5.00% 10/25/35 - 08/25/38. 5,874 5,764
5.50% 01/25/33............ 2,768 2,853
6.12% 03/25/38............ 22,514 2,641 /(g,i,m)/
6.37% 06/25/37............ 8,375 1,057 /(g,i,m)/
6.77% 10/25/29............ 3,823 374 /(g,h,i,m)/
7.27% 05/25/18............ 1,218 140 /(g,h,i,m)/
Principal
Amount Value
7.37% 09/25/42............ $ 10,356 $ 1,954 /(g,h,i,m)/
7.47% 08/25/16............ 1,242 72 /(g,h,i,m)/
16.10% 03/25/31............ 2,993 3,386 /(h,i)/
Federal National Mortgage
Assoc. (Class 1)
1.35% 11/01/34............ 3,572 2,959 /(d,f,h)/
4.50% 09/01/35 - 01/01/36. 14,970 3,077 /(g,m)/
5.00% 05/25/38............ 4,467 814 /(g,m)/
Federal National Mortgage
Assoc. (Class 2)
4.50% 08/01/35............ 4,545 1,073 /(g,h,m)/
5.00% 03/25/38............ 4,181 824 /(g,m)/
5.50% 12/01/33............ 1,190 262 /(g,h,m)/
7.50% 11/01/23............ 695 112 /(g,h,m)/
8.00% 08/01/23 - 07/01/24. 334 78 /(g,h,m)/
8.50% 03/01/17 - 07/25/22. 496 101 /(g,h,m)/
9.00% 05/25/22............ 164 41 /(g,h,m)/
Federal National Mortgage
Assoc. (Class B)
6.69% 12/25/22............ 164 152 /(d,f,h)/
Federal National Mortgage
Assoc. (Class H)
5.00% 10/25/22............ 1,371 147 /(g,h,m)/
Federal National Mortgage
Assoc. (Class K)
1008%** 05/25/22............ -- 6 /(g,h,m)/
Federal National Mortgage
Assoc. REMIC
6.00% 04/25/37............ 2,633 528 /(g,m)/
6.01% 01/25/40............ 26,874 3,018 /(g,i,m)/
6.31% 07/25/36............ 20,043 2,465 /(g,i,m)/
6.42% 06/25/36............ 9,648 1,300 /(g,i,m)/
Government National Mortgage
Assoc.
6.17% 05/20/39............ 14,658 1,622 /(g,i,m)/
6.27% 01/20/37............ 22,517 2,181 /(g,i,m)/
57,630
Asset Backed -- 2.9%
AmeriCredit Automobile
Receivables Trust
0.31% 04/07/14............ 8,250 7,861 /(i)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
16
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Avis Budget Rental Car Funding
AESOP LLC (Class A)
0.35% 04/20/11........ $ 5,333 $ 5,291 /(b,i)/
Bayview Financial Acquisition
Trust (Class A)
0.91% 02/28/44........ 3,020 2,501 /(i)/
Bear Stearns Asset Backed
Securities Trust (Class A)
0.60% 01/25/34........ 210 138 /(i)/
Capital One Auto Finance Trust
0.23% 04/15/12........ 5,683 5,669 /(h,i)/
Chase Funding Mortgage Loan
Asset-Backed Certificates
5.75% 05/25/32........ 311 155 /(h,i,l)/
Countrywide
Asset-Backed Certificates
0.49% 07/25/34........ 1,456 1,224 /(i)/
0.75% 02/25/35........ 2,674 2,502 /(h,i)/
1.09% 05/25/33........ 24 14 /(i)/
Countrywide Asset-Backed
Certificates (Class 2)
0.83% 06/25/33........ 20 15 /(i)/
Countrywide Asset-Backed
Certificates (Class A)
0.60% 08/25/34........ 64 58 /(h,i)/
0.79% 08/25/32........ 163 79 / (h,i)/
0.89% 04/25/32........ 95 46 / (h,i)/
1.03% 03/25/33........ 465 345 / (i)/
Countrywide Home Equity Loan
Trust (Class 2)
0.47% 01/15/30........ 3,818 1,336 /(i)/
Discover Card Master
Trust I (Class A)
0.56% 06/16/15........ 1,500 1,410 /(i)/
Discover Card Master Trust I
(Class B) (Series 2)
0.41% 05/15/12........ 2,430 2,327 /(i)/
First Franklin Mortgage Loan
Asset Backed Certificates
0.49% 11/25/36........ 1,446 975 /(i)/
First Franklin Mortgage Loan
Asset Backed Certificates
(Class M)
0.68% 03/25/35........ 10,000 8,784 /(i)/
Principal
Amount Value
First Horizon Asset Back
Trust (Class A)
0.45% 02/25/34...... $ 1,081 $ 575 /(i)/
GMAC Mortgage Corp Loan
Trust (Class 2)
0.41% 08/25/35...... 3,279 847 /(i)/
GSAA Trust
0.48% 01/25/36...... 10,000 4,736 /(i,l)/
0.63% 05/25/34...... 407 285 /(i)/
GSAMP Trust
0.38% 12/25/35...... 965 944 /(i)/
Indymac Residential Asset
Backed Trust
0.34% 11/25/36...... 8,934 7,414 /(i)/
Indymac Residential Asset
Backed Trust (Class M)
2.23% 04/25/47...... 1,018 2 /(h,i,l,n)/
Irwin Home Equity Corp.
0.38% 02/25/36...... 420 131 /(b,i)/
Long Beach Mortgage Loan Trust
0.33% 05/25/36...... 309 302 /(i)/
0.39% 05/25/36...... 2,000 758 /(h,i,l)/
Mid-State Trust
7.54% 07/01/35...... 716 674 /(h,l)/
Nissan Auto Lease Trust
0.30% 02/15/13...... 2,281 2,279 /(i)/
Option One Mortgage Loan Trust
(Class A)
1.07% 02/25/33...... 299 206 /(i)/
Residential Asset Mortgage
Products Inc. (Class A)
0.79% 06/25/32...... 70 57 /(i)/
Residential Asset Securities Corp.
0.33% 06/25/36...... 140 140 /(i)/
0.73% 07/25/32...... 279 136 /(h,i)/
Residential Asset Securities
Corp. (Class A)
0.81% 06/25/33...... 545 273 /(i)/
0.87% 11/25/33...... 510 166 /(i)/
Residential Funding Mortgage
Securities II Inc. (Class A)
0.44% 02/25/34...... 101 52 /(i)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
17
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
SLM Student Loan Trust (Class A)
0.30% 06/15/18........ $ 218 $ 216 /(h,i)/
Triad Auto Receivables Owner
Trust (Class A)
0.29% 02/12/14........ 11,000 10,650 /(h,i)/
Wachovia Asset Securitization
Inc. (Class A)
0.45% 06/25/34........ 595 302 /(i,l)/
Wells Fargo Home Equity Trust
3.97% 05/25/34........ 160 158 /(h,i,l)/
72,033
Corporate Notes -- 35.2%
Abbey National Treasury
Services PLC
3.88% 11/10/14........ 3,064 3,075 /(b)/
Abu Dhabi National Energy Co.
6.25% 09/16/19........ 1,200 1,162 /(b)/
Adaro Indonesia PT
7.63% 10/22/19........ 700 692 /(b)/
AES El Salvador Trust
6.75% 02/01/16........ 1,100 977 /(b)/
Air Jamaica Ltd.
9.38% 07/08/15........ 86 75
Alliance One International, Inc.
10.00% 07/15/16........ 2,750 2,888 /(b)/
ALROSA Finance S.A.
8.88% 11/17/14........ 1,100 1,132 /(b)/
AMC Entertainment Inc.
8.75% 06/01/19........ 3,555 3,626
American Tower Corp.
4.63% 04/01/15........ 3,802 3,846 /(b)/
Anheuser-Busch InBev
Worldwide Inc.
5.38% 11/15/14........ 3,587 3,798 /(b)/
7.20% 01/15/14........ 1,067 1,210 /(b)/
7.75% 01/15/19........ 5,982 7,004 /(b)/
Apria Healthcare Group Inc.
11.25% 11/01/14........ 4,024 4,416 /(b)/
ARAMARK Corp.
8.50% 02/01/15........ 5,904 6,081
Principal
Amount Value
Archer-Daniels-Midland Co.
6.45% 01/15/38...... $ 4,266 $ 4,750 /(h)/
Arcos Dorados BV
7.50% 10/01/19...... 800 793 /(b)/
Arizona Public Service Co.
6.25% 08/01/16...... 3,165 3,346 /(h)/
AT&T Inc.
6.40% 05/15/38...... 5,262 5,408 /(h)/
6.70% 11/15/13...... 3,500 3,949 /(h)/
Axtel SAB de C.V.
9.00% 09/22/19...... 268 275 /(b)/
Banco do Brasil S.A.
8.50% 10/29/49...... 2,700 2,876 /(b)/
Banco Mercantil del Norte S.A.
6.14% 10/13/16...... 534 518 /(i)/
Banco Nacional de
Desenvolvimento Economico
e Social
6.50% 06/10/19...... 3,200 3,440 /(b)/
Bank of America Corp.
5.75% 12/01/17...... 8,335 8,535 /(h)/
6.50% 08/01/16...... 6,770 7,280
7.38% 05/15/14...... 1,225 1,390
Barclays Bank PLC
5.00% 09/22/16...... 1,975 2,018
5.20% 07/10/14...... 3,796 4,024
Berkshire Hathaway Finance
Corp.
5.00% 08/15/13...... 2,315 2,489
BlackRock, Inc.
5.00% 12/10/19...... 3,568 3,506
Boston Properties LP (REIT)
5.88% 10/15/19...... 2,500 2,508
Boston Scientific Corp.
6.00% 01/15/20...... 1,814 1,854
Bristol-Myers Squibb Co.
5.88% 11/15/36...... 1,191 1,238 /(h)/
CA, Inc.
5.38% 12/01/19...... 2,588 2,603
6.13% 12/01/14...... 1,251 1,382
Calpine Corp.
7.25% 10/15/17...... 5,590 5,366 /(b)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
18
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Cantor Fitzgerald LP
7.88% 10/15/19....... $ 2,584 $ 2,529 /(b)/
Cargill Inc.
5.20% 01/22/13....... 2,139 2,268 /(b,h)/
6.00% 11/27/17....... 1,749 1,864 /(b,h)/
Carolina Power & Light Co.
5.15% 04/01/15....... 1,500 1,614 /(h)/
5.70% 04/01/35....... 815 810 /(h)/
6.13% 09/15/33....... 1,032 1,083 /(h)/
6.30% 04/01/38....... 2,000 2,161
Case New Holland Inc.
7.75% 09/01/13....... 5,358 5,479 /(b)/
Cenovus Energy Inc.
4.50% 09/15/14....... 2,738 2,826 /(b)/
6.75% 11/15/39....... 2,489 2,713 /(b)/
Centrais Eletricas Brasileiras S.A.
6.88% 07/30/19....... 1,600 1,734 /(b)/
Central American Bank for
Economic Integration
5.38% 09/24/14....... 2,780 2,884 /(b)/
CFG Investment SAC
9.25% 12/19/13....... 600 596
Chesapeake Energy Corp.
7.25% 12/15/18....... 6,000 6,045
Cincinnati Bell Inc.
8.25% 10/15/17....... 4,890 4,963
Citigroup, Inc.
5.00% 09/15/14....... 3,115 3,003
5.13% 05/05/14....... 4,121 4,102
6.38% 08/12/14....... 8,733 9,143
8.50% 05/22/19....... 7,825 9,036
City National Capital Trust I
9.63% 02/01/40....... 2,594 2,755
Clarendon Alumina
Production Ltd.
8.50% 11/16/21....... 1,325 967 /(b,h)/
CME Group Inc.
5.40% 08/01/13....... 2,255 2,434
Comcast Corp.
6.50% 01/15/15....... 2,491 2,791
Community Health Systems, Inc.
8.88% 07/15/15....... 6,000 6,210
Principal
Amount Value
Consolidated Edison Company
of New York Inc.
5.85% 04/01/18...... $ 4,158 $ 4,454
6.65% 04/01/19...... 2,158 2,445
COX Communications Inc.
6.25% 06/01/18...... 2,270 2,416 /(b)/
7.13% 10/01/12...... 2,052 2,279 /(h)/
7.75% 11/01/10...... 2,410 2,523 /(h)/
Credit Suisse
6.00% 02/15/18...... 8,345 8,732 /(h)/
Credit Suisse First Boston
International for CJSC The
EXIM of Ukraine
7.65% 09/07/11...... 1,264 1,062
CVS Caremark Corp.
5.75% 06/01/17...... 1,067 1,126
6.13% 09/15/39...... 3,734 3,701
6.60% 03/15/19...... 1,106 1,210
DASA Finance Corp.
8.75% 05/29/18...... 4,294 4,455
Diageo Capital PLC
5.20% 01/30/13...... 2,074 2,220 /(h)/
Diageo Finance BV
3.25% 01/15/15...... 2,514 2,497
Diamond Offshore Drilling, Inc.
5.70% 10/15/39...... 6,186 6,021
Digicel Group Ltd.
8.25% 09/01/17...... 700 682 /(b)/
DirecTV Financing Company Inc.
4.75% 10/01/14...... 5,230 5,331 /(b)/
5.88% 10/01/19...... 3,036 3,088 /(b)/
Dolphin Energy Ltd.
5.89% 06/15/19...... 2,475 2,500 /(b)/
Dominion Resources, Inc.
5.20% 08/15/19...... 2,499 2,538
Dover Corp.
6.50% 02/15/11...... 1,930 2,039 /(h)/
Drummond Company Inc.
7.38% 02/15/16...... 3,398 3,322 /(b)/
9.00% 10/15/14...... 2,955 3,099 /(b)/
Duke Energy Indiana Inc.
6.35% 08/15/38...... 5,212 5,694
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
19
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Dynegy Holdings Inc.
7.50% 06/01/15..... $ 3,484 $ 3,258
Ecopetrol S.A.
7.63% 07/23/19..... 802 889
Embraer Overseas Ltd.
6.38% 01/15/20..... 1,066 1,066
Empresa Nacional del Petroleo
6.25% 07/08/19..... 1,700 1,768 /(b)/
Empresas Publicas de
Medellin ESP
7.63% 07/29/19..... 800 880 /(b)/
European Investment Bank
4.88% 01/17/17..... 5,000 5,358
Exelon Generation Company LLC
5.20% 10/01/19..... 3,484 3,486
6.25% 10/01/39..... 3,111 3,170
Export-Import Bank of Korea
5.88% 01/14/15..... 450 483
Gaz Capital S.A.
8.13% 07/31/14..... 700 742 /(b)/
9.25% 04/23/19..... 2,500 2,788
Genworth Financial Inc.
8.63% 12/15/16..... 2,594 2,691
Gerdau Holdings Inc.
7.00% 01/20/20..... 1,000 1,028 /(b)/
GlaxoSmithKline Capital Inc.
4.85% 05/15/13..... 2,952 3,169
Globo Comunicacao e
Participacoes S.A.
7.25% 04/26/22..... 1,690 1,766 /(b)/
HCA Inc.
7.88% 02/15/20..... 5,888 6,131 /(b)/
9.25% 11/15/16..... 5,368 5,764
HCC Insurance Holdings, Inc.
6.30% 11/15/19..... 1,280 1,300
Health Management
Associates, Inc.
6.13% 04/15/16..... 5,364 5,029
Holcim US Finance Sarl &
Cie SCS
6.00% 12/30/19..... 2,013 2,095 /(b)/
Principal
Amount Value
Host Hotels & Resorts LP (REIT)
9.00% 05/15/17........ $ 6,892 $ 7,452 /(b)/
HSBC Bank USA N.A.
4.63% 04/01/14........ 1,815 1,895 /(h)/
7.00% 01/15/39........ 3,250 3,641
HSBC Finance Corp.
5.00% 06/30/15........ 9,276 9,582
5.70% 06/01/11........ 5,342 5,581
6.75% 05/15/11........ 1,975 2,087 /(h)/
HSBC Holdings PLC
6.50% 05/02/36........ 625 656 /(h)/
6.80% 06/01/38........ 3,000 3,256
Hutchison Whampoa
International 09 Ltd.
7.63% 04/09/19........ 700 804 /(b)/
Hutchison Whampoa
International 09/16 Ltd.
4.63% 09/11/15........ 3,900 3,935 /(b)/
IIRSA Norte Finance Ltd.
8.75% 05/30/24........ 3,084 3,239 /(b,h)/
Illinois Power Co.
9.75% 11/15/18........ 3,752 4,665
Indo Integrated Energy BV
9.00% 06/01/12........ 2,100 2,120
Industrial Bank Of Korea
7.13% 04/23/14........ 800 895 /(b)/
Ingles Markets Inc.
8.88% 05/15/17........ 6,262 6,512
Inmarsat Finance PLC
7.38% 12/01/17........ 3,800 3,886 /(b)/
Intelsat Subsidiary Holding
Company Ltd.
8.88% 01/15/15........ 2,750 2,846
Intergas Finance BV
6.88% 11/04/11........ 500 510
Intergen N.V.
9.00% 06/30/17........ 5,202 5,423 /(b,h)/
International Business
Machines Corp.
7.63% 10/15/18........ 2,400 2,931
International Paper Co.
7.50% 08/15/21........ 5,258 5,891
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
20
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Inversiones CMPC S.A.
6.13% 11/05/19.... $ 1,200 $ 1,209 /(b)/
Johnson & Johnson
5.85% 07/15/38.... 2,058 2,220
JPMorgan Chase & Co.
5.13% 09/15/14.... 7,475 7,884
6.30% 04/23/19.... 1,868 2,055
JPMorgan Chase Bank
5.88% 06/13/16.... 2,391 2,509 /(h)/
JPMorgan Chase Capital XXVII
7.00% 11/01/39.... 3,805 3,837
Kazakhstan Temir Zholy
Finance BV
6.50% 05/11/11.... 600 590
KazMunaiGaz Finance Sub BV
9.13% 07/02/18.... 800 888 /(b)/
11.75% 01/23/15.... 1,500 1,808 /(b)/
KeyBank NA
5.80% 07/01/14.... 3,856 3,753
Korea Hydro & Nuclear Power
Company Ltd.
6.25% 06/17/14.... 1,500 1,637 /(b)/
Korea National Oil Corp.
5.38% 07/30/14.... 1,700 1,797 /(b)/
Kreditanstalt fuer Wiederaufbau
3.50% 03/10/14.... 13,305 13,673
4.13% 10/15/14.... 7,696 8,065
4.50% 07/16/18.... 4,964 5,126
L-3 Communications Corp.
5.88% 01/15/15.... 3,256 3,252
Lincoln National Corp.
8.75% 07/01/19.... 4,359 4,981
Majapahit Holding BV
7.25% 10/17/11.... 3,700 3,867 /(b)/
7.75% 10/17/16.... 1,400 1,482 /(b)/
7.75% 01/20/20.... 1,700 1,781
Massey Energy Co.
6.88% 12/15/13.... 1,934 1,932
McDonald's Corp.
6.30% 03/01/38.... 2,284 2,519
MDC-GMTN B.V.
7.63% 05/06/19.... 1,300 1,388 /(b)/
Principal
Amount Value
Mead Johnson Nutrition Co.
4.90% 11/01/19...... $ 3,758 $ 3,726 /(b)/
Merrill Lynch & Company Inc.
6.05% 08/15/12...... 3,502 3,751
6.88% 04/25/18...... 4,332 4,667
Midamerican Energy
Holdings Co.
6.13% 04/01/36...... 2,165 2,217 /(h)/
Morgan Stanley
5.05% 01/21/11...... 2,295 2,380
5.63% 09/23/19...... 4,970 5,006
6.00% 04/28/15...... 2,134 2,273
7.30% 05/13/19...... 4,957 5,566
Morgan Stanley (Series F)
6.63% 04/01/18...... 3,100 3,352
Munich Re America
Corp. (Series B)
7.45% 12/15/26...... 1,935 1,993 /(h)/
NAK Naftogaz Ukraine
9.50% 09/30/14...... 2,300 1,931 /(n)/
National Agricultural
Cooperative Federation
5.00% 09/30/14...... 2,316 2,400 /(b)/
NET Servicos de
Comunicacao S.A.
7.50% 01/27/20...... 1,100 1,122 /(b)/
Newmont Mining Corp.
5.13% 10/01/19...... 1,961 1,962
6.25% 10/01/39...... 5,600 5,607
News America Inc.
5.65% 08/15/20...... 1,745 1,817 /(b)/
6.65% 11/15/37...... 3,885 4,104
Nexen Inc.
6.20% 07/30/19...... 4,503 4,765
7.50% 07/30/39...... 2,994 3,432
NGPL Pipeco LLC
7.12% 12/15/17...... 2,195 2,422 /(b)/
Nisource Finance Corp.
6.13% 03/01/22...... 2,424 2,474
Noble Group Ltd.
6.75% 01/29/20...... 500 513 /(b)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
21
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
NorthWestern Corp.
5.88% 11/01/14..... $ 3,875 $ 4,019 /(h)/
NRG Energy, Inc.
7.38% 02/01/16..... 5,370 5,377
Odebrecht Finance Ltd.
7.00% 04/21/20..... 1,500 1,517 /(b)/
Oracle Corp.
5.00% 07/08/19..... 2,498 2,576
Pacific Gas & Electric Co.
5.80% 03/01/37..... 2,045 2,073
Pacific Rubiales Energy Corp.
8.75% 11/10/16..... 700 735 /(b)/
Pacificorp
6.00% 01/15/39..... 2,000 2,102
6.25% 10/15/37..... 2,106 2,272
Parker Hannifin Corp.
5.50% 05/15/18..... 3,249 3,423
Pemex Finance Ltd.
9.03% 02/15/11..... 1,685 1,736 /(h)/
Petrobras International
Finance Co.
5.75% 01/20/20..... 2,700 2,747
Petroleos Mexicanos
4.88% 03/15/15..... 4,030 4,015 /(b)/
8.00% 05/03/19..... 622 720
Petroleum Company of Trinidad
& Tobago Ltd.
6.00% 05/08/22..... 1,800 1,674 /(b)/
Petronas Capital Ltd.
5.25% 08/12/19..... 1,500 1,501 /(b)/
Petronas Global Sukuk Ltd.
4.25% 08/12/14..... 1,100 1,103 /(b)/
Pfizer Inc.
6.20% 03/15/19..... 2,326 2,586
7.20% 03/15/39..... 1,160 1,417
Pioneer Natural Resources Co.
7.50% 01/15/20..... 4,672 4,674
Plains All American Pipeline LP
4.25% 09/01/12..... 3,755 3,875
PNC Funding Corp.
4.25% 09/21/15..... 2,492 2,542
Principal
Amount Value
Potomac Electric Power Co.
7.90% 12/15/38...... $ 866 $ 1,106
Power Sector Assets & Liabilities
Management Corp.
7.39% 12/02/24...... 700 721 /(b)/
President and Fellows of
Harvard College
5.00% 01/15/14...... 2,500 2,685 /(b)/
Principal Financial Group, Inc.
8.88% 05/15/19...... 1,724 1,989
Prudential Financial, Inc.
3.63% 09/17/12...... 1,244 1,262
5.15% 01/15/13...... 2,879 3,029
7.38% 06/15/19...... 2,509 2,813
Public Service Company
of Colorado
7.88% 10/01/12...... 3,330 3,821 /(h)/
QVC Inc.
7.50% 10/01/19...... 2,500 2,550 /(b)/
Qwest Communications
International Inc.
8.00% 10/01/15...... 2,500 2,569 /(b)/
RailAmerica, Inc.
9.25% 07/01/17...... 4,912 5,225
Raspadskaya Securities Ltd. for
OJSC Raspadskaya
7.50% 05/22/12...... 1,000 1,009
Republic Services Inc.
5.25% 11/15/21...... 2,588 2,545 /(b)/
5.50% 09/15/19...... 1,743 1,770 /(b)/
Reynolds Group DL Escrow Inc.
7.75% 10/15/16...... 5,433 5,555 /(b)/
Roche Holdings Inc.
6.00% 03/01/19...... 2,262 2,486 /(b)/
Royal Bank of Scotland
Group PLC
6.40% 10/21/19...... 1,680 1,675
RSHB Capital SA for OJSC
Russian Agricultural Bank
6.97% 09/21/16...... 500 491 /(i)/
Sabine Pass LNG LP
7.25% 11/30/13...... 1,825 1,656
7.50% 11/30/16...... 3,310 2,756
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
22
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
SBA Telecommunications Inc.
8.00% 08/15/16...... $ 1,072 $ 1,120 /(b)/
8.25% 08/15/19...... 1,608 1,704 /(b)/
Security Benefit Life Insurance
8.75% 05/15/16...... 2,190 548 /(b)/
Simon Property Group LP (REIT)
6.75% 05/15/14...... 3,004 3,201
Southern California Edison Co.
5.50% 08/15/18...... 4,250 4,537
Southern Copper Corp.
6.38% 07/27/15...... 1,000 1,028
7.50% 07/27/35...... 500 495
Spirit Aerosystems Inc.
7.50% 10/01/17...... 2,500 2,463 /(b)/
Talecris Biotherapeutics
Holdings Corp.
7.75% 11/15/16...... 2,100 2,131 /(b)/
Talisman Energy Inc.
7.75% 06/01/19...... 2,744 3,223
Target Corp.
7.00% 01/15/38...... 2,000 2,333
Teachers Insurance & Annuity
Association of America
6.85% 12/16/39...... 3,106 3,211 /(b)/
Teck Resources Ltd.
10.75% 05/15/19...... 3,764 4,498
Telecom Italia Capital S.A.
6.20% 07/18/11...... 3,491 3,695
7.18% 06/18/19...... 3,510 3,913
Telefonica Emisiones SAU
5.86% 02/04/13...... 3,075 3,322
Tesoro Corp. (Series B)
6.63% 11/01/15...... 6,435 6,113
The Allstate Corp.
7.45% 05/16/19...... 1,836 2,133
The Bear Stearns Companies LLC
6.95% 08/10/12...... 4,497 5,024 /(h)/
The Dow Chemical Co.
5.90% 02/15/15...... 3,504 3,765
8.55% 05/15/19...... 1,250 1,491
The Goldman Sachs Group, Inc.
6.00% 05/01/14...... 4,470 4,889
Principal
Amount Value
6.60% 01/15/12..... $ 689 $ 749
7.50% 02/15/19..... 5,294 6,172
The Kroger Co.
6.15% 01/15/20..... 4,302 4,604
The Potomac Edison Co.
5.35% 11/15/14..... 1,520 1,593 /(h)/
5.50% 02/01/34..... 1,154 1,180
The Royal Bank of Scotland PLC
4.88% 08/25/14..... 2,060 2,088 /(b)/
The Toledo Edison Company
7.25% 05/01/20..... 1,184 1,351
The Travelers Companies, Inc.
5.80% 05/15/18..... 2,150 2,291
The Williams Companies, Inc.
7.88% 09/01/21..... 3,886 4,457
Thermo Fisher Scientific, Inc.
3.25% 11/18/14..... 2,590 2,539 /(b)/
Thomson Reuters Corp.
5.95% 07/15/13..... 3,244 3,551
Time Warner Cable Inc.
6.75% 07/01/18..... 4,798 5,271
7.50% 04/01/14..... 3,408 3,927
8.75% 02/14/19..... 3,498 4,263
Time Warner Inc.
5.88% 11/15/16..... 3,262 3,521
TNK-BP Finance S.A.
6.13% 03/20/12..... 1,100 1,128
Transocean Inc.
6.00% 03/15/18..... 2,121 2,263
UBS Luxembourg S.A. for OJSC
Vimpel Communications
8.00% 02/11/10..... 2,400 2,415
Union Electric Co.
6.70% 02/01/19..... 4,046 4,467
United Technologies Corp.
6.13% 07/15/38..... 1,081 1,171
UPC Germany GmbH
8.13% 12/01/17..... 2,600 2,629 /(b)/
USB Capital XIII Trust
6.63% 12/15/39..... 2,595 2,637
Vale Overseas Ltd.
6.88% 11/10/39..... 568 572
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
23
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Valero Energy Corp.
6.63% 06/15/37..... $ 3,386 $ 3,177
Vedanta Resources PLC
6.63% 02/22/10..... 1,070 1,073
9.50% 07/18/18..... 900 914 /(b)/
Verizon Communications Inc.
5.25% 04/15/13..... 3,046 3,283
6.35% 04/01/19..... 1,524 1,681
6.40% 02/15/38..... 1,350 1,411
6.90% 04/15/38..... 2,140 2,372
8.75% 11/01/18..... 3,262 4,074
Verizon Global Funding Corp.
7.25% 12/01/10..... 3,889 4,110 /(h)/
Verizon Wireless Capital LLC
5.55% 02/01/14..... 6,882 7,469
Verizon Wireless Capital LLC
7.38% 11/15/13..... 6,113 7,022
VIP Finance Ireland Ltd. for
OJSC Vimpel
Communications (Class A)
8.38% 04/30/13..... 1,800 1,904 /(b)/
Virgin Media Finance PLC
8.38% 10/15/19..... 2,700 2,778
9.50% 08/15/16..... 2,700 2,899
Voto-Votorantim Overseas
Trading Operations N.V.
6.63% 09/25/19..... 1,000 1,002 /(b)/
VTB Capital SA
for Vneshtorgbank
6.32% 02/04/15..... 700 693 /(i)/
Walgreen Co.
5.25% 01/15/19..... 3,687 3,913
WEA Finance LLC
6.75% 09/02/19..... 2,496 2,680 /(b)/
7.50% 06/02/14..... 3,750 4,220 /(b)/
Westpac Banking Corp.
4.88% 11/19/19..... 5,180 5,113
Windstream Corp.
7.88% 11/01/17..... 6,177 6,100 /(b)/
Woodside Finance Ltd.
4.50% 11/10/14..... 5,028 5,073 /(b)/
Wyeth
5.50% 03/15/13..... 4,274 4,647
Principal
Amount Value
XL Capital Ltd.
5.25% 09/15/14...... $ 5,664 $ 5,547
Xstrata Finance Canada Ltd.
5.80% 11/15/16...... 2,491 2,553 /(b)/
XTO Energy Inc.
6.38% 06/15/38...... 1,677 1,888
6.50% 12/15/18...... 933 1,066
858,110
Non-Agency Collateralized Mortgage Obligations -- 6.7%
Banc of America Commercial
Mortgage Inc. (Class A)
5.66% 06/10/49...... 5,970 4,990
Banc of America Commercial
Mortgage Inc. (Class C)
5.70% 04/10/49...... 2,000 432 /(h,i,l)/
Banc of America Funding Corp.
5.37% 02/20/36...... 1,941 69 /(h,i,l)/
5.60% 03/20/36...... 1,728 94 /(h,i,l)/
Banc of America Mortgage
Securities Inc. (Class B)
5.16% 01/25/36...... 1,820 153 /(h,i,l)/
5.51% 02/25/36...... 1,374 260 /(h,i,l)/
Bear Stearns Commercial
Mortgage Securities
5.24% 12/11/38...... 2,070 1,687
5.33% 02/11/44...... 3,410 2,943
5.41% 03/11/39...... 1,472 1,494 /(h,i)/
5.46% 03/11/39...... 2,200 1,342 /(i)/
5.48% 10/12/41...... 4,563 4,617 /(h)/
5.61% 06/11/50...... 3,540 3,590
5.69% 06/11/50...... 4,820 4,220 /(i)/
5.72% 06/11/40...... 2,420 1,210 /(i)/
6.21% 11/11/17...... 2,930 1,437 /(i)/
Bear Stearns Commercial
Mortgage Securities (Class A)
5.46% 04/12/38...... 1,442 1,463 /(i)/
5.54% 10/12/41...... 4,900 4,872
5.92% 06/11/50...... 2,225 1,606 /(i)/
Bear Stearns Commercial
Mortgage Securities (Class D)
5.99% 09/11/42...... 700 131 /(b,h,i,l)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
24
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Citigroup Commercial
Mortgage Trust
5.70% 12/10/49...... $ 9,000 $ 6,488 /(i)/
Citigroup Commercial
Mortgage Trust (Class A)
5.62% 10/15/48...... 5,970 5,687
Countrywide Alternative
Loan Trust (Class B)
6.00% 08/25/36...... 187 3 /(h,l)/
Countrywide Commercial
Mortgage Trust
5.46% 07/12/46...... 6,230 4,784
Credit Suisse Mortgage
Capital Certificates
5.47% 09/15/39...... 3,967 3,398 /(h)/
Credit Suisse Mortgage Capital
Certificates (Class C)
5.65% 02/25/36...... 959 70 /(h,i,l)/
CS First Boston Mortgage
Securities Corp.
0.65% 07/15/37...... 37,269 529 /(b,h,i,l)/
1.40% 03/15/35...... 53,308 123 /(b,h,i,l)/
5.34% 10/25/35...... 1,625 130 /(h,i,l)/
Greenwich Capital Commercial
Funding Corp.
5.44% 03/10/39...... 3,540 3,128
5.60% 12/10/49...... 5,280 5,229
GS Mortgage Securities Corp II
5.56% 11/10/39...... 3,650 3,196
Impac CMB Trust
0.49% 04/25/35...... 1,709 944 /(h,i)/
Impac CMB Trust (Class 1)
0.59% 10/25/34...... 3,845 2,771 /(i)/
Impac Secured Assets CMN
Owner Trust
0.62% 03/25/36...... 2,453 178 /(i)/
Impac Secured Assets CMN
Owner Trust (Class A)
0.48% 11/25/36...... 2,149 36 /(h,i)/
Indymac INDA Mortgage
Loan Trust
5.22% 01/25/36...... 473 6 /(h,i,l)/
Principal
Amount Value
Indymac INDA Mortgage Loan
Trust (Class B)
5.22% 01/25/36...... $ 949 $ 53 /(h,i,l)/
Interstar Millennium Trust
(Class A)
0.65% 03/14/36...... 416 350 /(i)/
JP Morgan Alternative
Loan Trust
0.29% 10/25/36...... 1,557 1,494 /(i)/
JP Morgan Chase Commercial
Mortgage Securities Corp.
5.34% 08/12/37...... 4,450 4,391 /(i)/
5.50% 06/12/47...... 1,200 534 /(i)/
5.79% 02/12/51...... 5,040 4,397 /(i)/
5.87% 04/15/45...... 2,010 1,937 /(i)/
6.07% 02/12/51...... 6,200 4,877
6.20% 02/12/51...... 1,080 191 /(b,h,i,l)/
JP Morgan Chase Commercial
Mortgage Securities
Corp. (Class A)
5.90% 02/12/51...... 4,780 3,460 /(i)/
LB-UBS Commercial
Mortgage Trust
0.67% 09/15/39...... 122,692 2,485 /(h,i,l)/
0.72% 01/18/12...... 51,891 590 /(h,i,l)/
1.00% 01/15/36...... 21,334 963 /(b,d,h,l)/
4.95% 09/15/30...... 2,230 2,161
5.87% 09/15/45...... 5,990 5,257 /(i)/
6.15% 04/15/41...... 1,160 679
LB-UBS Commercial Mortgage
Trust (Class B)
6.65% 07/14/16...... 750 774 /(b,h,l)/
LB-UBS Commercial Mortgage
Trust (Class F)
6.24% 07/15/40...... 1,915 320 /(h,i,l)/
LB-UBS Commercial Mortgage
Trust (Class X)
0.46% 03/15/32...... 32,282 87 /(h,i,l)/
LB-UBS Commercial Mortgage
Trust (Class X)
0.50% 12/15/39...... 44,274 515 /(b,h,i,l)/
Lehman Brothers Floating Rate
Commercial Mortgage Trust
0.49% 10/15/17...... 208 207 /(b,h,i)/
0.54% 10/15/17...... 4,000 3,964 /(b,h,i)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
25
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
MASTR Alternative Loans Trust
5.00% 08/25/18...... $ 1,395 $ 137 /(g,h,l,m)/
Medallion Trust (Class A)
0.31% 08/22/36...... 1,378 1,307 /(i)/
MLCC Mortgage Investors Inc.
5.04% 02/25/36...... 1,505 58 /(h,i,l)/
Morgan Stanley Capital I
0.77% 01/15/21...... 2,988 717 /(b,i)/
5.16% 10/12/52...... 3,500 3,429 /(i)/
5.28% 12/15/43...... 2,021 2,046 /(h)/
5.33% 12/15/43...... 2,021 1,875 /(h)/
5.36% 11/12/41...... 9,345 7,693
5.39% 11/12/41...... 4,629 2,600 /(h,i)/
5.44% 02/12/44...... 2,017 1,996 /(b,h)/
5.69% 04/15/49...... 7,700 6,488 /(h,i)/
5.71% 07/12/44...... 3,000 3,003 /(h)/
Morgan Stanley Capital I
(Class A)
1.00% 03/12/44...... 6,080 5,863 /(i)/
Morgan Stanley Dean Witter
Capital I (Class A)
5.72% 12/18/32...... 4 4 /(h,l)/
MortgageIT Trust (Class A)
0.53% 08/25/35...... 3,388 2,059 /(i)/
National RMBS Trust
0.36% 03/20/34...... 625 595 /(i)/
Opteum Mortgage
Acceptance Corp.
0.53% 02/25/35...... 973 632 /(h,i)/
Residential Accredit Loans Inc.
6.00% 01/25/36...... 1,433 34 /(h,l)/
Residential Funding
Mortgage Securities I
5.75% 01/25/36...... 1,564 120 /(h,l)/
Sequoia Mortgage Trust
0.49% 06/20/34...... 212 161 /(h,i)/
Structured Asset Securities Corp.
(Class X)
2.17%** 02/25/28...... 4,910 -- /(i,l)/
Thornburg Mortgage Securities
Trust (Class A)
0.91% 04/25/43...... 365 313 /(i)/
Principal
Amount Value
Wachovia Bank Commercial
Mortgage Trust
5.25% 12/15/43............. $ 4,840 $ 4,676
Wachovia Bank Commercial
Mortgage Trust (Class A)
5.99% 06/15/45............. 1,200 723 /(i)/
WaMu Mortgage Pass
Through Certificates
0.56% 01/25/45............. 965 558 /(h,i)/
0.57% 01/25/45............. 758 469 /(i)/
WaMu Mortgage Pass Through
Certificates (Class A)
0.67% 07/25/44............. 1,220 635 /(i)/
Wells Fargo Mortgage Backed
Securities Trust
5.39% 08/25/35............. 4,121 220 /(h,i,l)/
5.50% 01/25/36 - 03/25/36.. 3,108 368 /(h,l)/
Wells Fargo Mortgage Backed
Securities Trust (Class B)
5.50% 03/25/36............. 2,831 582 /(h,l)/
162,357
Sovereign Bonds -- 1.8%
Democratic Socialist Republic
of Sri Lanka
7.40% 01/22/15............. 700 726 /(b)/
8.25% 10/24/12............. 500 525
Government of Argentina
2.50% 12/31/38............. 550 191
Government of Belize
4.25% 02/20/29............. 549 302 /(j)/
Government of Brazil
5.63% 01/07/41............. 1,000 942
8.00% 01/15/18............. 1,980 2,259 /(h)/
Government of Colombia
6.13% 01/18/41............. 1,600 1,484
7.38% 03/18/19 - 09/18/37.. 2,100 2,319
Government of Croatia
6.75% 11/05/19............. 1,000 1,077 /(b)/
Government of Dominican
9.50% 09/27/11............. 2,035 2,116
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
26
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Government of Indonesia
10.38% 05/04/14.... $ 700 $ 863 /(b)/
11.63% 03/04/19.... 900 1,291 /(b)/
Government of Korea
5.75% 04/16/14.... 808 883
Government of Lebanon
4.00% 12/31/17.... 467 432 /(a)/
Government of
Manitoba Canada
4.90% 12/06/16.... 2,120 2,242 /(h)/
Government of Panama
5.20% 01/30/20.... 1,400 1,404
6.70% 01/26/36.... 1,965 2,073
Government of Peruvian
6.55% 03/14/37.... 3,361 3,495
7.35% 07/21/25.... 500 572
Government of Philippines
6.50% 01/20/20.... 700 758
Government of Poland
6.38% 07/15/19.... 805 876
Government of Qatar
4.00% 01/20/15.... 400 401 /(b)/
5.25% 01/20/20.... 1,600 1,612 /(b)/
6.40% 01/20/40.... 400 402 /(b)/
Government of Quebec Canada
7.50% 09/15/29.... 3,115 3,919
Government of Turkey
7.50% 07/14/17.... 1,000 1,135
Government of Uruguay
6.88% 09/28/25.... 802 843
Government of Venezuela
5.38% 08/07/10.... 3,497 3,410
10.75% 09/19/13.... 1,338 1,177
Korea Expressway Corp.
4.50% 03/23/15.... 1,800 1,834 /(b)/
Republic of Ghana
8.50% 10/04/17.... 600 614 /(b)/
Republic of Lithuania
6.75% 01/15/15.... 1,500 1,527 /(b)/
Republic of the Philippines
6.38% 10/23/34.... 1,000 980
44,684
Principal
Amount Value
Municipal Bonds and Notes -- 0.3%
New Jersey State
Turnpike Authority
7.41% 01/01/40..... $ 2,590 $ 2,900
New Jersey Transportation
Trust Fund Authority
6.88% 12/15/39..... 880 904
Dallas Area Rapid Transit
6.00% 12/01/44..... 1,560 1,597
American Municipal
Power-Ohio Inc.
6.05% 02/15/43..... 1,994 1,868
7,269
Total Bonds and Notes
(Cost $2,308,344)........... 2,291,218
---------------------------------------------------------
Other Investments -- 0.3%
---------------------------------------------------------
GEI Investment Fund
(Cost $9,591).............. 7,289 /(k)/
Total Investment in Securities
(Cost $2,317,935) 2,298,507
---------------------------------------------------------
Short-Term Investments -- 9.5%
---------------------------------------------------------
Time Deposit -- 0.5%
State Street Corp.
0.01% 01/04/10..... 14,022 14,022 /(e)/
U.S. Treasuries -- 2.0%
U.S. Treasury Bill
0.13% 05/20/10..... 48,800 48,774 /(d)/
Federal Agencies -- 7.0%
Federal Home Loan Bank
Discount Notes
0.03% 01/27/10..... 28,700 28,699 /(d)/
0.05% 03/03/10..... 40,000 39,995 /(d)/
0.10% 03/19/10..... 40,000 39,991 /(d)/
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
27
GE S&S Income Fund (dollars in thousands) -- December 31, 2009
[GRAPHIC]
Principal
Amount Value
Federal National Mortgage
Assoc.Discount Notes
0.04% 02/04/10..... $ 11,300 $ 11,299 /(d)/
0.05% 02/24/10..... 50,000 49,994 /(d)/
169,978
Total Short-Term Investments
(Cost $232,774)............ 232,774
Total Investments
(Cost $2,550,709).......... 2,531,281
Liabilities in Excess of Other
Assets, net -- (3.8)% (93,669)
-----------
NET ASSETS -- 100.0%........ $ 2,437,612
===========
Other Information
- --------------------------------------------------------------------------------
The S&S Income Fund had the following long futures contracts open at
December 31, 2009:
Number Current
Expiration of Notional Unrealized
Description Date Contracts Value (Depreciation)
-----------------------------------------------------------------
2 Yr. U.S.Treasury
Notes Futures March 2010 428 $92,562 $(137)
5 Yr. U.S.Treasury
Notes Futures March 2010 229 26,194 (428)
The S&S Income Fund had the following short futures contracts open at
December 31, 2009:
Number Current
Expiration of Notional Unrealized
Description Date Contracts Value Appreciation
------------------------------------------------------------------
10 Yr. U.S.Treasury
Notes Futures March 2010 1017 $(117,416) $3,075
------
$2,510
======
- -------
See Notes to Schedules of Investments on page 29 and Notes to Financial
Statements.
28
[GRAPHIC]
(dollars in thousands) -- December 31, 2009
(a)Non-income producing security.
(b)Pursuant to Rule 144A of the Securities Act of 1933, these securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. At December 31, 2009, these securities amounted to
$255,274; or 10.47% of the net assets of the GE S&S Income Fund. These
securities have been determined to be liquid using procedures established by
the Board of Trustees.
(c)Settlement is on a delayed delivery or when-issued basis with final maturity
to be announced (TBA) in the future.
(d)Coupon amount represents effective yield.
(e)State Street Corp. is the parent company of State Street Bank & Trust Co.,
the Fund's custodian and accounting agent.
(f)Principal only securities represent the right to receive the monthly
principal payments on an underlying pool of mortgages. No payments of
interest on the pool are passed through to the "principal only" holder.
(g)Interest only securities represent the right to receive the monthly interest
payments on an underlying pool of mortgages. Payments of principal on the
pool reduce the value of the "interest only" holding.
(h)At December 31, 2009, all or a portion of this security was pledged to cover
collateral requirements for futures, options, forward foreign currency
contracts and/or TBA's.
(i)Variable or floating rate security. The stated rate represents the rate of
December 31, 2009.
(j)Step coupon bond. Security becomes interest bearing at a future date.
(k)GEAM, the investment adviser of the Fund, also serves as investment adviser
of the GEI Investment Fund.
(l)Illiquid Securities at December 31, 2009, these securities amounted to
$16,444; or 0.67% of net assets for the GE S&S Income Fund. These securities
have been determined to be illiquid using procedures established by the
Board of Trustees.
(m)Coupon amount represents the coupon of the underlying mortgage securities on
which monthly interest payments are based.
(n)Securities in default.
+ Percentages are based on net assets as of December 31, 2009.
* Less than 0.1%
** Value less than $500
Abbreviations:
ADR -- American Depository Receipt
REIT -- Real Estate Investment Trust
REMIC -- Real Estate Mortgage Investment Conduit
STRIPS -- Separate Trading of Registered Interest
and Principal of Security
TBA -- To be announced
29
[GRAPHIC]
Selected data based on a share outstanding throughout the years indicated
GE S&S Program Mutual Fund 2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------------
Inception date -- -- -- -- 1/1/80
Net asset value, beginning of year. $ 28.15 $ 44.73 $ 46.31 $ 42.85 $ 45.36
Income from investment operations:
Net investment income............ 0.51 0.60 0.74 0.91 0.74
Net realized and unrealized
gains (losses) on investments.. 8.70 (16.58) 3.24 6.31 0.63
- ------------------------------------------------------------------------------------------
Total income (loss) from
investment operations............ 9.21 (15.98) 3.98 7.22 1.37
- ------------------------------------------------------------------------------------------
Less distributions from:
Net investment income............ 0.50 0.60 0.74 0.90 0.76
Net realized gains............... -- -- 4.82 2.86 3.12
- ------------------------------------------------------------------------------------------
Total distributions................ 0.50 0.60 5.56 3.76 3.88
- ------------------------------------------------------------------------------------------
Net asset value, end of year....... $ 36.86 $ 28.15 $ 44.73 $ 46.31 $ 42.85
- ------------------------------------------------------------------------------------------
TOTAL RETURN/(a)/.................. 32.71% (35.70)% 8.53% 16.82% 2.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands)................. $3,720,632 $2,857,838 $4,678,236 $4,541,021 $4,074,331
Ratios to average net assets:
Net investment income.......... 1.60% 1.53% 1.48% 1.95% 1.60%
Net expenses................... 0.19% 0.20% 0.10% 0.11% 0.09%
Gross expenses................. 0.19% 0.20% 0.10% 0.11% 0.09%
Portfolio turnover rate.......... 45% 58% 55% 40% 42%
(a)Total returns are historical and assume changes in share price, reinvestment
of dividends and capital gains distributions.
- -------
See Notes to Financial Statements.
30
[GRAPHIC]
Selected data based on a share outstanding throughout the years indicated
GE S&S Income Fund 2009 2008 2007 2006 2005
- -------------------------------------------------------------------------------------------------
Inception date -- -- -- -- 1/3/80
Net asset value, beginning of year........ $ 10.49 $ 11.18 $ 11.15 $ 11.24 $ 11.52
Income (loss) from investment operations:
Net investment income................... 0.44 0.50 0.62 0.60 0.55
Net realized and unrealized
gains (losses) on investments......... 0.36 (0.69) 0.03 (0.09) (0.26)
- -------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations................... 0.80 (0.19) 0.65 0.51 0.29
- -------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income................... 0.44 0.50 0.62 0.60 0.54
Net realized gains...................... -- -- -- -- 0.03
- -------------------------------------------------------------------------------------------------
Total distributions....................... 0.44 0.50 0.62 0.60 0.57
- -------------------------------------------------------------------------------------------------
Net asset value, end of year.............. $ 10.85 $ 10.49 $ 11.18 $ 11.15 $ 11.24
- -------------------------------------------------------------------------------------------------
TOTAL RETURN/(a)/......................... 7.80% (1.73)% 6.03% 4.74% 2.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands)........................ $2,437,612 $2,350,064 $2,527,067 $2,507,655 $2,557,311
Ratios to average net assets:
Net investment income................. 4.15% 4.64% 5.61% 5.47% 4.80%
Net expenses.......................... 0.19% 0.18% 0.15% 0.15% 0.13%
Gross expenses........................ 0.19% 0.18% 0.15% 0.15% 0.13%
Portfolio turnover rate................. 322% 452% 426% 322% 323%
(a)Total returns are historical and assume changes in share price, reinvestment
of dividends and capital gains distributions.
- -------
See Notes to Financial Statements.
31
Statements of Assets and Liabilities GE S&S
December 31, 2009 (Amounts in thousands) PROGRAM GE S&S
MUTUAL FUND INCOME FUND
ASSETS
Investments in securities, at market
(cost $3,414,888 and 2,308,344, respectively)................ $3,685,989 $2,291,218
Investments in affiliated securities at market
(cost $0, and 9,591, respectively)........................... -- 7,289
Short-term Investments (at amortized cost)..................... 33,889 232,774
Foreign currency (cost $49 and $0, respectively)............... 49 --
Income receivables............................................. 4,213 21,355
Receivable for fund shares sold................................ 5 400
Variation margin receivable.................................... -- 273
Other assets................................................... 7 --
- -----------------------------------------------------------------------------------------
Total assets................................................. 3,724,152 2,553,309
- -----------------------------------------------------------------------------------------
LIABILITIES
Distribution Payable to Shareholders........................... -- 451
Payable for investments purchased.............................. -- 113,005
Payable for fund shares redeemed............................... 1,418 126
Payable to GEAM................................................ 1,693 1,786
Accrued other expenses......................................... 52 71
Other liabilities.............................................. 357 258
- -----------------------------------------------------------------------------------------
Total liabilities............................................ 3,520 115,697
- -----------------------------------------------------------------------------------------
NET ASSETS....................................................... $3,720,632 $2,437,612
- -----------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital paid in................................................ 4,064,550 2,586,456
Undistributed(distribution in excess of) net investment income. 503 3,775
Accumulated net realized gain (loss)........................... (615,522) (135,701)
Net unrealized appreciation/(depreciation) on:
Investments.................................................. 271,101 (19,428)
Futures...................................................... -- 2,510
- -----------------------------------------------------------------------------------------
NET ASSETS....................................................... $3,720,632 $2,437,612
- -----------------------------------------------------------------------------------------
Shares outstanding ($25.00 and $10.00 par value respectively;
unlimited shares authorized)................................... 100,952 224,696
Net asset value per share........................................ $36.86 $10.85
- -------
See Notes to Financial Statements.
32
Statements of Operations GE S&S
For the Year ended December 31 , 2009 (Amounts in thousands) PROGRAM GE S&S
MUTUAL FUND INCOME FUND
INVESTMENT INCOME
Income:
Dividend.......................................................... $ 52,917 $ --
Interest.......................................................... 3,982 101,577
Interest from affliated investments............................... -- 83
Less : Foreign taxes withheld..................................... (294) --
- ----------------------------------------------------------------------------------------------
Total Income........................................................ 56,605 101,660
- ----------------------------------------------------------------------------------------------
Expenses:
Advisory and administration fees (Note 4)......................... 4,498 2,864
Transfer agent fees............................................... 685 655
Insurance......................................................... 308 222
Shareholder servicing agent expense............................... 233 223
Custody and accounting expenses................................... 150 298
Professional fees................................................. 29 41
Registration, printing, filing and miscellaneous expenses......... 75 90
- ----------------------------------------------------------------------------------------------
Net expenses...................................................... 5,978 4,393
- ----------------------------------------------------------------------------------------------
Net investment income............................................... 50,627 97,267
- ----------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ( LOSS) ON INVESTMENTS
Realized gain (loss) on :
Investments....................................................... (364,491) (58,682)
Futures........................................................... -- 2,736
Foreign currency related transactions............................. -- (18)
Increase (decrease) in unrealized appreciation / (depreciation) on:
Investments....................................................... 1,230,943 135,996
Futures........................................................... -- (362)
- ----------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments..................... 866,452 79,670
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations................ $ 917,079 $176,937
- ----------------------------------------------------------------------------------------------
- -------
See Notes to Financial Statements.
33
Statements of Changes GE S&S
in Net Assets For the year ended PROGRAM GE S&S
December 31, 2009 and 2008 (Amounts in thousands) MUTUAL FUND INCOME FUND
2009 2008 2009 2008
- -----------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investments income................................ $ 50,627 $ 59,622 $ 97,267 $ 114,275
Net realized gain (loss) on investments, futures,
written options, foreign currency related
transactions and swaps.............................. (364,491) (212,386) (55,964) (25,791)
Net increase (decrease) in unrealized appreciation/
(depreciation) on investments, futures, written
options, foreign currency related translations...... 1,230,943 (1,472,109) 135,634 (134,260)
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) from operations............... 917,079 (1,624,873) 176,937 (45,776)
- -----------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income................................. (50,216) (59,567) (97,663) (113,769)
Net realized gains.................................... -- (144) -- --
Return of capital..................................... -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Total distributions..................................... (50,216) (59,711) (97,663) (113,769)
- -----------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations
and distributions..................................... 866,863 (1,684,584) 79,274 (159,545)
- -----------------------------------------------------------------------------------------------------------
Share transactions:
Proceeds from sale of shares.......................... 160,374 172,805 72,733 86,858
Value of distributions reinvested..................... 46,834 55,370 92,933 108,183
Cost of shares redeemed............................... (211,277) (363,989) (157,392) (212,499)
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) from share transactions......... (4,069) (135,814) 8,274 (17,458)
- -----------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 862,794 (1,820,398) 87,548 (177,003)
NET ASSETS
Beginning of year....................................... 2,857,838 4,678,236 2,350,064 2,527,067
- -----------------------------------------------------------------------------------------------------------
End of year............................................. $3,720,632 $ 2,857,838 $2,437,612 $2,350,064
- -----------------------------------------------------------------------------------------------------------
Undistributed net investment income, end of year.......... $ 503 $ 92 $ 3,775 $ 4,186
CHANGES IN FUND SHARES
Shares sold by subscription............................... 5,259 4,627 6,893 7,937
Issued for distributions reinvested....................... 1,260 1,999 8,788 10,003
Shares redeemed........................................... (7,096) (9,676) (14,985) (19,910)
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) in fund shares.................... (577) (3,050) 696 (1,970)
- -----------------------------------------------------------------------------------------------------------
- -------
See Notes to Financial Statements.
34
December 31, 2009
[GRAPHIC]
1. Organization of the Funds
The GE S&S Program Mutual Fund and GE S&S Income Fund (collectively, the
"Funds") are registered under the Investment Company Act of 1940, as amended,
(the "1940 Act") as open-end management investment companies. The Funds are two
of the investment options offered under the GE Savings & Security Program (the
"Program"). The Program, through a trust, owns 63% of the GE S&S Program Mutual
Fund and 69% of the GE S&S Income Fund. The Funds operate as Employees'
Securities Companies (as defined in the 1940 Act) and as such are exempt from
certain provisions of the 1940 Act.
GE Asset Management Incorporated (GEAM) is the Funds' investment adviser and a
wholly-owned subsidiary of General Electric Company.
2. Summary of Significant Accounting Policies
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions at the date of the financial statements. Actual results may differ
from those estimates.
Accounting Changes
The Financial Accounting Standards Board (FASB) issued FASB Accounting
Standards Codification (ASC) effective for financial statements issued for
interim and annual periods ending after September 15, 2009. The ASC is an
aggregation of previously issued authoritative U.S. generally accepted
accounting principles (GAAP) in one comprehensive set of guidance organized by
subject area. In accordance with the ASC, references to previously issued
accounting standards have been replaced by ASC references. Subsequent revisions
to GAAP will be incorporated into the ASC through Accounting Standards Updates
(ASU).
Subsequent Events
The following summarizes the significant accounting policies of the Funds:
Subsequent events after the balance sheet date through the date that the
financial statements were issued, have been evaluated in the preparation of the
Financial Statements.
Security Valuation and Transactions
A Fund's portfolio securities are valued generally on the basis of market
quotations. Equity securities generally are valued at the last reported sales
price on the primary market in which they are traded. Portfolio securities
listed on NASDAQ are valued using the NASDAQ Official Closing Price, which may
not necessarily represent the last sale price. If no sales occurred on the
exchange or NASDAQ that day, the portfolio security generally is valued using
the last reported bid price.
Debt securities (other than short-term securities described below) generally
are valued at an evaluated bid as reported by an independent pricing service.
Values obtained from pricing services are based on various factors such as
market transactions, dealer supplied valuations, security characteristics and
other market data. In the absence of a reliable price from such a
pricing service, debt securities may be valued based on dealer supplied
valuations or quotations. A Fund's written or purchased options are valued at
the last sales price, or if no sales occurred that day, at the last reported
bid price. Short-term investments of sufficient quality with remaining
maturities of sixty days or less at the time of purchase are valued on the
basis of amortized costs.
35
December 31, 2009
[GRAPHIC]
All assets and liabilities of the Funds initially expressed in foreign currency
values will be converted into U.S. dollars at the WM/Reuter exchange rate
computed at 11:00 a.m., Eastern time.
If prices are not readily available for a portfolio security, or if it is
believed that a price for a portfolio security does not represent its fair
value, the security may be valued using procedures approved by the Funds' Board
of Trustees that are designed to establish its "fair" value.
Foreign securities may be valued with the assistance of an independent fair
value pricing service in circumstances where it is believed that they have been
or would be materially affected by events occurring after the close of the
portfolio security's primary market and before the close of regular trading on
the NYSE. This independent fair value pricing service uses a computerized
system to appraise affected securities and portfolios taking into consideration
various factors and the fair value of such securities may be something other
than the last available quotation or other market price.
GEAM may also separately monitor portfolio securities and, consistent with the
Funds' fair value procedures, apply a different value to a portfolio security
than would be applied had it been priced using market quotations or by an
independent fair value pricing service.
Determining the fair value of securities involves the application of both
subjective and objective considerations. Security values may differ depending
on the methodology used to determine their values, and may differ from the last
quoted sale or closing price. No assurance can be given that use of these fair
value procedures will always better represent the price at which a Fund could
sell the affected portfolio security.
Security transactions are accounted for as of the trade date. Realized gains
and losses on investments sold are recorded on the basis of identified cost for
both financial statement and federal tax purposes.
Fair Value Measurement
(Dollars in Thousands)
The Funds adopted ASC 820, Fair Valuation Measurements and Disclosures
effective January 1, 2008. This guidance establishes a new framework for
measuring fair value and expands related disclosures. Broadly, the framework
requires fair value to be determined based on the exchange price that would be
received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly
transaction between market participants. It also establishes a three-level
valuation hierarchy based upon observable and non-observable inputs.
For financial assets and liabilities, fair value is the price the Funds would
receive to sell an asset or pay to transfer a liability in an orderly
transaction with a market participant at the measurement date. In the absence
of active markets for the identical assets or liabilities, such measurements
involve developing assumptions based on market observable data and, in the
absence of such data, internal information that is consistent with what market
participants would use in a hypothetical transaction that occurs at the
measurement date.
Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect our market assumptions. Preference is given to
observable inputs. These two types of inputs create the following fair value
hierarchy:
36
December 31, 2009
[GRAPHIC]
Level 1 - Quoted prices for identical investments in active markets.
Level 2 - Quoted prices for similar investments in active markets; quoted
prices for identical or similar investments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
Level 3 - Significant inputs to the valuation model are unobservable.
Policies and procedures are maintained to value investments using the best and
most relevant data available. In addition, GEAM performs periodic reviews of
the methodologies used by independent pricing services including price
validation of individual securities.
The following section describes the valuation methodologies the Fund uses to
measure different financial investments at fair value.
When available, the Funds uses quoted market prices to determine the fair value
of investment securities, and they are included in Level 1. Level 1 securities
primarily include publicly-traded equity securities.
When quoted market prices are unobservable, pricing information is obtained
from an independent pricing vendor. The pricing vendor uses various pricing
models for each asset class that are consistent with what other market
participants would use. The inputs and assumptions to the model of the pricing
vendor are derived from market observable sources including: benchmark yields,
reported trades, broker/dealer quotes, issuer spreads, benchmark securities,
bids, offers, and other market-related data. Since many fixed income securities
do not trade on a daily basis, the methodology of the pricing vendor uses
available information as applicable such as benchmark curves, benchmarking of
like securities, sector groupings, and matrix pricing. The pricing vendor
considers all available market observable inputs in determining the evaluation
for a security. Thus, certain securities may not be priced using quoted prices,
but rather determined from market observable information. These investments are
included in Level 2 and primarily comprise our portfolio of corporate fixed
income, and government, mortgage and asset-backed securities. In infrequent
circumstances, pricing vendors may provide the Fund with valuations that are
based on significant unobservable inputs, and in those circumstances the
investment securities are included in Level 3.
The Funds uses non-binding broker quotes as the primary basis for valuation
when there is limited, or no, relevant market activity for a specific
investment or for other investments that share similar characteristics. The
Funds have not adjusted the prices obtained. Investment securities priced using
non-binding broker quotes are included in Level 3. As is the case with the
primary pricing vendor, third-party brokers do not provide access to their
proprietary valuation models, inputs and assumptions. Accordingly, GEAM
conducts internal reviews of pricing for all such investment securities
periodically to ensure reasonableness of valuations used in our financial
statements. These reviews are designed to identify prices that appear stale,
those that have changed significantly from prior valuations, and other
anomalies that may indicate that a price may not be accurate. Based on the
information available, GEAM believes that the fair values provided by the
brokers are representative of prices that would be received to sell the assets
at the measurement date (exit prices).
37
December 31, 2009
[GRAPHIC]
Other financial investments are derivative investments that are not reflected
in Total Investments, such as futures, forwards, swaps, and written options
contracts, which are valued based on the unrealized appreciation/depreciation
of the instrument.
The Funds uses closing prices for derivatives included in Level 1, which are
traded either on exchanges or liquid over-the counter markets. Derivative
assets and liabilities included in Level 2 primarily represent interest rate
swaps, cross-currency swaps and foreign currency and commodity forward and
option contracts. Derivative assets and liabilities included in Level 3
primarily represent interest rate products that contain embedded optionality or
prepayment features.
Other financial instruments are derivative instruments that are not reflected
in Total Investments, such as futures, forwards, swaps, and written options
contracts.
In January 2010, FASB issued ASU 2010-06, Improving Disclosures about Fair
Value Measurements. ASU 2010-06 will require reporting entities to make new
disclosures about the amounts and reasons for significant transfers in and out
of Level 1 and Level 2 fair value measurements and inputs and valuation
techniques used to measure fair value for both recurring and nonrecurring fair
value measurements that fall in either Level 2 or Level 3, and information on
purchases, sales, issuances, and settlements in the roll forward of activity in
Level 3 fair value measures. The new disclosures are effective for interim and
annual reporting periods beginning after December 15, 2009, except for the
disclosures about purchases, sales, issuances, and settlements in the roll
forward of activity in Level 3 fair value measurements. Those disclosures are
effect for fiscal years beginning after December 15, 2010, and for interim
periods within those fiscal years. GEAM does not believe the adoption of ASU
2010-06 will materially impact the financial statement amounts.
The following tables present the funds' investments measured at fair value on a
recurring basis at December 31, 2009:
S&S Program Mutual Fund
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------
Investments in Securities/*+/ $3,685,989 $ 33,889 $ -- $3,719,878
+ See Statement of Investments for Industry Classification.
S&S Income Fund
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------
Investments In Securities+ $ -- $2,427,789 $103,492 $2,531,281
Other Financial Instruments+ 2,510 -- -- 2,510
+ See Statement of Investments for Industry Classification.
* Other financial instruments include derivative instruments such as futures,
forward foreign currency exchange contracts, swap contacts and option
contacts. Amounts shown represent unrealized appreciation (depreciation), or
in the case of options, market value at period end.
38
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Following is a reconciliation of securities activity based on Level 3 inputs
for which unobservable market inputs were used to determine fair value:
Investments in Securities
- -----------------------------------------------------------------------------------
Balance at 12/31/08 $ 66,253
Accrued discounts/premiums 938
Realized gain (loss) (16,818)
Change in unrealized appreciation (depreciation) 16,682
Net purchases (sales) 54,720
Net transfers in and out of Level 3 (18,283)
- -----------------------------------------------------------------------------------
Balance at 12/31/09 $103,492
- -----------------------------------------------------------------------------------
Change in unrealized loss relating to securities still
held at 12/31/09 $ 2,152
Transfers in and out of Level 3 are considered to occur at the beginning of the
period.
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities. For example, money
market securities are valued using amortized cost, in accordance with the
Investment Company Act of 1940. Generally, amortized cost reflects the current
fair value of a security, but since the value is not obtained from a quoted
price in an active market, such securities are reflected as Level 2. Fair value
determinations are required for securities whose value is affected by a
significant event that will materially affect the value of a domestic or
foreign security and which occurs subsequent to the time of the close of the
principal market on which such domestic or foreign security trades but prior to
the calculation of the Fund's NAV.
Repurchase Agreements
Each of the Funds may engage in repurchase agreement transactions with respect
to instruments that are consistent with the Fund's investment objectives or
policies. The Funds' custodian takes possession of the collateral pledged for
investments in repurchase agreements on behalf of the Funds. The Funds value
the underlying collateral daily on a mark-to-market basis to determine that the
value, including accrued interest, is at least equal to 102% of the repurchase
price. In the event the seller defaults and the value of the security declines,
or if the seller enters an insolvency proceeding, realization of the collateral
by the Funds may be delayed or limited.
Security Lending
Each of the Funds may loan securities to brokers, dealers, and financial
institutions determined by GEAM to be creditworthy, subject to certain
limitations. The Funds continue to receive the interest and dividends on the
loaned securities during the term of the loan. The loans of securities are
secured by collateral in the form of cash or other liquid assets, which are
segregated and maintained with the custodian in an amount at least equal to
102% of the current market value of the loaned securities. During the term of
the loan, the Funds will record any gain or loss in the market value of its
loaned securities and of securities in which cash collateral is invested. A
Fund will also earn interest, net of any rebate, from
39
December 31, 2009
[GRAPHIC]
securities in which cash collateral is invested. In the event the counterparty
(borrower) does not meet its contracted obligation to return the securities,
the Funds may be exposed to the risk of loss of reacquiring the loaned
securities at prevailing market prices using the proceeds of the sale of the
collateral.
Foreign Currency
Accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
are translated into U.S. dollars at the prevailing rates of exchange at year
end. Purchases and sales of securities, income receipts and expense payments
denominated in foreign currencies are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of such transactions.
The Funds do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates for securities denominated in foreign
currencies from the fluctuations arising from changes in market prices of those
securities during the year. Such fluctuations are included in net realized or
unrealized gain or loss from investments. Net realized gains or losses on
foreign currency transactions represent net gains or losses on sales and
maturities of foreign currency contracts, disposition of foreign currencies,
the difference between the amount of net investment income and withholding
taxes accrued and the U.S. dollar amount actually received and paid, and gains
or losses between the trade and settlement date on purchases and sales of
securities. Net unrealized foreign exchange gains and losses arising from
changes in the value of other assets and liabilities (including foreign
currencies and open foreign currency contracts) as a result of changes in
foreign exchange rates are included as increases or decreases in unrealized
appreciation/depreciation on foreign currency related transactions.
Futures Contracts
The GE S&S Income Fund may invest in futures contracts subject to certain
limitations. The Fund may invest in futures contracts to manage its exposure to
the stock and bond markets and fluctuations in currency values. Buying futures
tends to increase a Fund's exposure to the underlying instrument while selling
futures tends to decrease a Fund's exposure to the underlying instrument, or
hedge other Fund investments. The Fund will not enter into a transaction
involving futures for speculative purposes. The Fund's risks in using these
contracts include changes in the value of the underlying instruments,
non-performance of the counterparties under the contracts' terms and changes in
the liquidity of the secondary market for the contracts. Futures contracts are
valued at the settlement price established each day by the board of trade or
exchange on which they principally trade.
Upon entering into a financial futures contract, the Fund is required to pledge
to the broker an amount of cash and/or other assets equal to a certain
percentage of the contract amount, known as initial margin deposit. Subsequent
payments, known as variation margin, are made or received by the Fund each day,
depending on the daily fluctuation in the fair value of the underlying
security. The Fund records an unrealized gain or loss equal to the daily
variation margin. Should market conditions move unexpectedly, the Fund may not
achieve the anticipated benefits of the futures contracts and may incur a loss.
The Fund recognizes a realized gain or loss on the expiration or closing of a
futures contract.
40
December 31, 2009
[GRAPHIC]
Options
The GE S&S Income Fund may purchase and write options, subject to certain
limitations. The Fund may invest in options contracts to manage its exposure to
the stock and bond markets and fluctuations in foreign currency values. Writing
puts and buying calls tend to increase a Fund's exposure to the underlying
instrument while buying puts and writing calls tend to decrease a Fund's
exposure to the underlying instrument, or hedge other Fund investments. The
Fund will not enter into a transaction involving options for speculative
purposes. The Fund's risks in using these contracts include changes in the
value of the underlying instruments, non-performance of the counter-parties
under the contracts' terms and changes in the liquidity of the secondary market
for the contracts. Options are valued at the last sale price, or if no sales
occurred on that day, at the last quoted bid price.
When a Fund writes an option, the amount of the premium received is recorded as
a liability and is subsequently adjusted to the current fair value of the
option written. Premiums received from writing options that expire unexercised
are treated by the Funds on the expiration date as realized gains from
investments. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase, as a realized loss. When an option is exercised, the
proceeds from the sale of the underlying security or the cost basis of the
securities purchased is adjusted by the original premium received or paid.
Swap Contracts
As part of its investment strategy, the GE S&S Income Fund may invest in swap
agreements which are agreements to exchange the return generated by one
instrument for the return generated by another instrument. Total return swap
agreements involve commitments to pay interest in exchange for a market linked
return based upon a notional principal amount. To the extent the total return
of the security or index underlying the agreement exceeds or falls short of the
offsetting interest rate obligation, the Fund will receive a payment from or
make a payment to the counterparty. Swaps are marked to market daily based upon
the underlying security or index. Payments received or made are recorded as
realized gain or loss in the Statement of Operations. Entering into swap
agreements involves, to varying degrees, elements of credit and market risk in
excess of the amounts recognized on the Statement of Assets and Liabilities.
Such risks involve the possibility that there will be no liquid market for
these agreements, that the counterparty to the agreements may default on its
obligation to perform and that there may be unfavorable changes in the value of
the index or securities underlying the agreement. Notional principal amounts
are used to express the extent of involvement in these transactions, but the
amounts potentially subject to credit risk are much smaller.
When-Issued Securities and Forward Commitments
Each of the Funds may purchase or sell securities on a when-issued or forward
commitment basis. These transactions are arrangements in which the Funds
purchase and sell securities with payment and delivery scheduled a month or
more after entering into the transactions. The price of the underlying
securities and the date when these securities will be delivered and paid for
are fixed at the time the transaction is negotiated. Losses may arise due to
changes in the market value of the
41
December 31, 2009
[GRAPHIC]
underlying securities or if the counterparty does not perform under the
contract. In connection with such purchases, the Funds maintain cash or liquid
assets in an amount equal to purchase commitments for such underlying
securities until settlement date and for sales commitments the Funds maintain
equivalent deliverable securities as "cover" for the transaction. Unsettled
commitments are valued at the current market value of the underlying security.
Daily fluctuations in the value of such contracts are recorded as unrealized
gains or losses. The Funds will not enter into such commitments for the purpose
of investment leverage.
Forward Foreign Currency Exchange Contracts
The GE S&S Income Fund may enter into forward foreign currency exchange
contracts to facilitate transactions in foreign denominated securities and to
manage the Fund's currency exposure. Forward foreign currency exchange
contracts are valued at the mean between the bid and the offered forward rates
as last quoted by a recognized dealer. The aggregate principal amounts of the
contracts are not recorded in the Fund's financial statements. Such amounts
appear under the caption forward foreign currency contracts in the Schedule of
Investments. Fluctuations in the value of the contracts are recorded in the
Statement of Assets and Liabilities as an asset (or liability) and in the
Statement of Operations as unrealized appreciation (depreciation) until the
contracts are closed, when they are recorded as realized gains or losses on
foreign currency related transactions. The Fund's risks in using these
contracts include changes in the value of foreign currency or the possibility
that the counterparties do not perform under the contracts' terms. When a Fund
enters into a forward foreign currency exchange contract, it is required to
segregate cash or liquid securities with its custodian in an amount equal to
the value of the Fund's total assets committed to the consummation of the
forward contract. If the value of the segregated securities declines,
additional cash or securities is segregated so that the value of the account
will equal the amount of the Fund's commitment with respect to the contract.
Income Taxes
(Dollars in Thousands)
The Funds intend to comply with all sections of the Internal Revenue Code
applicable to regulated investment companies including the distribution of
substantially all of their taxable net investment income and net realized
capital gains to their shareholders. Therefore, no provision for federal income
tax has been made. Each Fund is treated as a separate taxpayer for federal
income tax purposes.
The Funds are subject to ASC 740, Income Taxes. ASC 740 provides guidance for
financial accounting and reporting for the effects of income taxes that result
from an entity's activities during the year. ASC 740 also provides guidance
regarding how certain uncertain tax positions should be recognized, measured,
presented and disclosed in the financial statements. ASC 740 requires
evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more likely than not" of being sustained by the applicable tax authority.
There are no adjustments to the Funds' net assets required under ASC 740. The
Funds' 2006, 2007, 2008 and 2009 fiscal years tax returns are still open to
examination by the Federal and applicable state tax authorities."
42
December 31, 2009
[GRAPHIC]
At December 31, 2009, information on the tax components of capital is as
follows:
Cost of Gross Tax Gross Tax Net Tax Appreciation/
Investments Unrealized Unrealized (Depreciation) on
For Tax Purposes Appreciation Depreciation Investments
- ----------------------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $3,549,463 $413,582 $(243,167) $170,415
GE S&S Income Fund 2,553,320 68,066 (90,105) (22,039)
Net Tax Appreciation/ Undistributed Post
(Depreciation) on Long-Term Gains/ October
Derivatives, Currency Undistributed (Accumulated Losses
and Other Net Assets Income Capital Loss) (see Detail Below)
- ----------------------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $ -- $ 503 $(514,837) $ --
GE S&S Income Fund -- 3,775 (130,580) --
43
December 31, 2009
[GRAPHIC]
As of December 31, 2009, the following Funds have capital loss carryovers as
indicated below. The capital loss carryover is available to offset future
realized capital gains to the extent provided in the Internal Revenue Code and
regulations thereunder. To the extent that these carryover losses are used to
offset future capital gains, it is probable that the gains so offset will not
be distributed to shareholders because they would be taxable as ordinary income.
Fund Amount Expires
------------------------------------------
GE S&S Program Mutual
Fund $150,494 12/31/2016
364,343 12/31/2017
GE S&S Income Fund 8,770 12/31/2013
25,532 12/31/2014
16,907 12/31/2016
79,371 12/31/2017
Any net capital and currency losses incurred after October 31, within each
Fund's tax year, are deemed to arise on the first day of the Fund's next tax
year if the Fund so elects to defer such losses.
The Funds did not defer such losses.
The tax composition of distributions paid during the year ended December 31,
2009 was as follows:
Ordinary Long-Term
Fund Income Capital Gains Total
----------------------------------------------------
GE S&S Program
Mutual Fund 2009 $ 50,216 $ -- $ 50,216
2008 59,567 144 59,711
GE S&S
Income Fund 2009 97,663 -- 97,663
2008 113,769 -- 113,769
Distributions to Shareholders
GE S&S Income Fund declares investment income dividends daily and pays them
monthly. The GE S&S Program Mutual Fund declares and pays dividends from
investment income annually. The Funds declare and pay net realized capital
gains in excess of capital loss carryforwards distributions annually. The
character of income and gains to be distributed is determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences include (but are not limited to) treatment of
realized gains and losses on foreign currency contracts, futures and losses
deferred due to wash sale transactions. Reclassifications are made to the
Funds' capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations. These
reclassifications have no impact on net investment income, realized gains or
losses, or net asset value of the Funds. The calculation of net investment
income per share in the Financial Highlights table excludes these adjustments.
The reclassifications for the year ended December 31, 2009 were as follows:
Undistributed Accumulated Paid
Net Investment Net Realized in
Income Loss Capital
---------------------------------------------------
GE S&S Program
Mutual Fund $ -- $-- $ --
GE S&S
Income Fund (18) 18 --
Investment Income
Corporate actions (including cash dividends) are recorded on the ex-dividend
date, net of applicable withholding taxes, except for certain foreign corporate
actions, which are recorded as soon after ex-dividend date as such information
becomes available. Interest income is recorded on the accrual basis. All
discounts and premiums on bonds are accreted and amortized, respectively, to
call or maturity date, whichever is shorter, using the effective yield method.
Expenses
Expenses of the Funds which are directly identifiable to a specific Fund are
allocated to that Fund. Expenses which are not directly identifiable
44
December 31, 2009
[GRAPHIC]
to a specific Fund are allocated in such a manner as deemed equitable, taking
into consideration the nature and type of expense and the relative sizes of the
Funds. All expenses of the Funds are paid by GEAM, and reimbursed by the Funds.
Derivatives Disclosure
The Fund is subject to equity price risk, interest rate risk, credit risk and
foreign currency exchange rate risk in the normal course of pursuing their
investment objectives. The Fund uses futures contracts to gain exposure to, or
hedge against changes in the value of equities, interest rates or foreign
currencies. A futures contract represents a commitment for the future purchase
or sale of an asset at a specified price on a specified date. Upon entering
into such contracts, the Fund is required to deposit with the broker, either in
cash or securities, an initial margin in an amount equal to a certain
percentage of the contract amount. Subsequent payments (variation margin) are
made or received by the Fund each day, depending on the daily fluctuations in
the value of the contract, and are recorded for financial statement purposes as
unrealized gains or losses by the Fund. Upon entering into such contracts, the
Fund bears the risk of interest or exchange rates or securities prices moving
unexpectedly, in which case, the Fund may not achieve the anticipated benefits
of the futures contracts and may realize a loss. With futures contracts, there
is minimal counterparty credit risk to the Fund since futures contracts are
exchange traded and the exchange's clearinghouse, as counterparty to all traded
futures, guarantees the futures against default.
Shown below are the derivative contracts entered into by the Fund, summarized
by primary risk exposure.
Asset Derivatives December 31, 2009 Liability Derivatives December 31, 2009
---------------------------------------------- ----------------------------------------
Notional Notional
Value/ Value/
Derivatives not accounted No. of No. of
for as hedging instruments Balance Sheet Contracts Fair Balance Sheet Contracts Fair
under FASB ASC 815 Location Long/(Short) Value Location Long/(Short) Value
- ---------------------------------------------------------------------------------------------------------------------
S&S Income Fund
Interest Rate Contracts Receivables, Net Assets -- 1,340/1,674 2,510*
Unrealized Appreciation/
(Depreciation) on Futures
*Includes cumulative appreciation/depreciation of futures contracts as reported
in the Schedule of Investments and equity section of the Statement of Assets
and Liabilities. Only the current day's variation margin is reported within
the assets section of the receivables and/or payables Statement of Assets and
Liabilities.
Shown below are the effects of derivative instruments on the Funds' Statements
of Operations, summarized by primary risk exposure.
Total Number Realized Gain
of Futures/ or (Loss) on Change in Unrealized
Derivatives not accounted Options Derivatives Appreciation/(Depreciation)
for as hedging instruments Location in the Contracts Recognized on Derivatives
under FASB ASC 815 Statements of Operations Purchased/(Sold) in Income Recognized in Income
- -----------------------------------------------------------------------------------------------------------------------
S&S Income Fund
Interest Rate Contracts Net realized gain/(loss) on 27/(28) 2,736 (362)
futures, Increase/(decrease) in
unrealized appreciation/
(depreciation) on futures
45
December 31, 2009
[GRAPHIC]
3. Line of Credit
The Trust shares a revolving credit facility of up to $150 million with a
number of its affiliates. The credit facility is with its custodian bank, State
Street Bank and Trust Company. The revolving credit facility requires the
payment of a commitment fee equal to 0.15% per annum on the daily unused
portion of the credit facility, payable quarterly. The portion borne by the
Funds generally is borne proportionally based upon net assets. In addition, the
Trust has a $100 million uncommitted, unsecured line of credit with State
Street. Generally, borrowings under the credit facilities would accrue interest
at the Federal Funds Rate plus 50 basis points and would be borne by the
borrowing Fund. The maximum amount allowed to be borrowed by any one Fund is
the lesser of its prospectus limitation, 20% of its net assets, or $125
million. The credit facilities were not utilized by the Trust during the period
ended December 31, 2009.
4. Amounts Paid to Affiliates
Advisory and Administration Expenses
During 2009, the Funds incurred expenses for the cost of services rendered by
GEAM as investment adviser and for services GEAM rendered as shareholder
servicing agent. These expenses are included as advisory and administration
expenses and shareholder servicing agent expense in the Statements of
Operations. The Trustees received no compensation as trustees for the Funds.
GENPACT performs certain accounting and certain administration services not
provided by GEAM. For the year ending December 31, 2009, $54,985 (dollars not
in thousands) was charged to the GE S&S Program Mutual Fund and $46,091
(dollars not in thousands) was charged to the GE S&S Income Fund.
Administrative services not performed by GEAM or GENPACT were provided by an
unaffiliated service provider.
5. Investment Transactions
(Dollars in Thousands)
Purchases and Sales of Securities
The cost of purchases and the proceeds from sales of investments, other than
short-term securities and options, for the year ended December 31, 2009, were
as follows:
U.S. Government
Securities Other Securities
-----------------------------------------------------------------------
Purchases Sales Purchases Sales
-----------------------------------------------------------------------
GE S&S Program Mutual Fund $ -- $ -- $1,419,596 $1,398,336
GE S&S Income Fund 5,457,034 6,178,594 2,023,823 1,359,685
Options
During the year ended December 31, 2009 and for the year then ended the GE S&S
Income Fund did not enter into any option contracts.
Security Lending
At December 31, 2009 and for the year then ended there were no securities on
loan.
46
[GRAPHIC]
[LOGO]
Board of Trustees and Shareholders
GE S&S Funds
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the GE S&S Program Mutual Fund and
GE S&S Income Fund, each a series of GE S&S Funds (collectively, the "Funds"),
as of December 31, 2009 and the related statements of operations for the year
then ended, statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December 31, 2009 by
correspondence with the custodian and brokers, or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
GE S&S Program Mutual Fund and GE S&S Income Fund as of December 31, 2009, the
results of their operations, changes in their net assets and financial
highlights for each of the years described above, in conformity with U.S.
generally accepted accounting principles.
[LOGO]
Boston, Massachusetts
February 25, 2010
47
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For the year ended December 31, 2009
Summary
For the fiscal year ended December 31, 2009 certain dividends paid by the fund
may be subject to a maximum income tax rate of 15%, as provided for by the Jobs
and Growth Tax Relief Reconciliation Act of 2003. Of the ordinary dividends
paid during the fiscal year, the following represent the amounts that may be
considered qualified dividend income:
Qualified
Dividend
Fund name Income
---------------------------------------------------
General Electric S&S Program Mutual Fund 100%
For corporate shareholders, of the ordinary dividends paid, the following
represent the amounts that may be eligible for the dividends received deduction:
Dividends
Received
Fund name Deduction
---------------------------------------------------
General Electric S&S Program Mutual Fund 95.66%
48
[GRAPHIC]
The Board of Trustees of the GE S&S Mutual Funds/1/ (the "Board") considered
and all those that were present unanimously approved the continuance of the
investment advisory agreements with GE Asset Management Incorporated ("GEAM")
at a meeting held on December 17, 2009.
In considering whether to approve the Funds' investment advisory agreements,
the Board members considered and discussed a substantial amount of information
and analysis provided by GEAM personnel. The Board members also considered
detailed information regarding performance and expenses of other investment
companies, including those with similar investment objectives and sizes, which
was prepared by independent third party providers, Lipper Analytical Services
Inc. ("Lipper") and Morningstar, Inc. ("Morningstar"). The Board members
reviewed the fees charged by GEAM for other mutual funds and investment
products other than mutual funds that employ the same investment strategies as
the Funds. The Board had the opportunity to ask questions and request
additional information in connection with its considerations.
Before approving each Fund's investment advisory agreement, the Board members
received and considered memoranda prepared by GEAM personnel that set forth
detailed information, including substantial exhibits and other materials
related to GEAM's business and the services it provides to each Fund. The Board
members also reviewed materials discussing the legal standards for the
consideration of the proposed continuances. The Board members reviewed and
discussed the proposed continuance of the agreements with GEAM personnel,
including representatives from the legal, compliance and finance departments
and senior members of each relevant investment group (e.g., equity, fixed
income). The Board members also heard presentations by these representatives,
and posed questions and engaged in substantive discussions with them concerning
the Funds' operations and the investment process employed for each Fund. The
Board members took into account that many of them possess multi-year experience
as Board members and that all of them possess a great deal of knowledge about
GEAM and the Funds in their capacities as senior officers of GEAM. They also
took into account their consideration of these types of agreements in recent
years. The information was presented in a manner to facilitate comparison to
prior periods and to reflect certain enhancements. To focus their review, the
Board members asked GEAM personnel, in its oral presentations, to highlight
material differences from the information presented in recent years.
- -------
/1/ The GE S&S Mutual Funds include the GE S&S Income Fund and GE S&S Program
Mutual Fund (each, a "Fund" and collectively, the "Funds").
In reaching their determinations relating to continuance of the Funds'
investment advisory agreements, the Board members considered all factors that
they deemed relevant, including the factors discussed below. In their
deliberations, the Board members did not identify any particular information
that was all-important or controlling, and each Board member may have
attributed different weights to the various factors. The Board members
evaluated this information, and all other information available to them, for
each Fund separately, and their determinations were made separately in respect
of each Fund. In particular, the Board members focused on the following with
respect to each Fund:
The Nature, Extent And Quality Of Services Provided
The Board members reviewed the services provided by GEAM and concurred that
GEAM provides high quality advisory and administrative services to the Funds.
In connection with their consideration of GEAM's services, the Board members
focused on the favorable attributes of GEAM, including (i) an investment
philosophy oriented toward long-term
49
[GRAPHIC]
performance; (ii) effective processes used for selecting investments and
brokers; (iii) effective processes used for providing Fund administration,
including controllership and compliance functions and oversight of the
performance of other companies that provide services to the Funds; (iv) highly
skilled professionals, including analysts, research professionals and portfolio
managers with a depth of experience involving the types of Funds they oversee;
(v) access to significant technological resources from which the Funds may
benefit; and (vi) a favorable history and reputation. The Board members
discussed the personnel changes made during the past year by GEAM. The Board
members noted that each Fund represents only a small amount of the overall
assets managed by GEAM, but benefits from a full array of services and
resources provided by GEAM. In particular, the Board members discussed that the
Funds benefit from a large staff of research analysts employed by GEAM.
In light of the foregoing, the Board members concluded that the services
provided by GEAM continue to be satisfactory.
Investment Performance Of The Funds
The Board members considered the investment performance of the Funds for
various periods. The Board members reviewed detailed comparisons of the
performance of the Funds with the relevant securities indices and peer
groupings of mutual funds prepared by Lipper and Morningstar with respect to
various periods. The Board members also engaged in discussions with GEAM
personnel regarding the investment process and performance results for each
Fund. These discussions focused on each Fund's investment objective, the number
and experience of portfolio management and supporting research personnel, the
investment style and approach employed, the likely market cycles for the
investment style and, in some instances, relative underperformance in certain
periods. The Board members discussed GEAM's investment approach with respect to
each of the Funds, and that the performance of the Funds is consistent with
GEAM's articulated long-term approach and overall investment philosophy.
The Board members concluded that the Funds' performance was acceptable overall
taking into consideration the factors discussed above.
Cost Of The Services Provided To The Funds
The Board members considered the cost of the services provided by GEAM, noting
that, pursuant to each investment advisory agreement, GEAM is reimbursed for
its reasonable costs incurred in providing the services contemplated by those
agreements and is not paid a management fee. The Board also noted that GE
Investment Distributors, Inc. ("GEID"), a subsidiary of GEAM, is reimbursed for
its reasonable costs incurred in providing services specified in its agreement
with the Funds as unitholder servicing agent and is not paid a unitholder
servicing fee. The Board members considered that the charges resulting from
this arrangement involve all of the expenses incurred by GEAM and GEID with
respect to the management and unitholder operations of the Funds, including,
without limitation, indirect allocable overhead costs and the direct and
indirect costs of GEAM and GEID personnel providing investment management and
other services to the Funds. The Board members noted and discussed the
additional services provided by GEAM to the Funds compared to other investment
products managed by GEAM and the charges that result from those services and
were provided a study conducted by the Investment Company Institute that
discusses and compares advisory fees and services for mutual funds and
institutional separate accounts. The Board members also noted that none of the
charges resulting from the Funds' arrangements with GEAM and GEID may include
any element of profit.
50
[GRAPHIC]
The Board members reviewed the information they had requested from GEAM
personnel concerning the underlying assumptions and methods of cost allocation
used by GEAM in allocating its costs and those of the other Fund service
providers, including GEID. The Board members also discussed with GEAM personnel
the basis for their belief that the methods of allocation used were reasonable
for each area of GEAM's business.
Based on their review, the Board members concluded that they were satisfied
that the assumptions and methods used in cost allocation and the level of
expenses incurred by the Funds were not unreasonable or excessive.
The Extent To Which Economies Of Scale Would Be Realized For The Benefit Of
Fund Shareholders As The Funds Grow
The Board members considered the extent to which economies of scale would be
realized for the benefit of Fund investors as the Funds grow. The Board noted
that, although none of the Funds experienced significant growth in assets over
the past year, the Funds continue to enjoy fee and expense levels within the
group of lowest fee and expense funds in their respective peer group
comparisons.
The Board members recognized the significant benefits to the Funds resulting
from their arrangement with GEAM, which causes them to bear only the reasonable
costs incurred by GEAM and GEID, without any element of profit, for the
substantial services they provide to the Funds. The Board members also
recognized the benefits to the Funds of being able to leverage a favorable cost
structure achieved with respect to the Funds' other operating expenses as a
result of GEAM's large overall base of assets under management and its vendor
management practices.
Comparison Of Services To Be Rendered And Costs To Be Incurred
The Board members discussed the services provided to the Funds by GEAM, and the
costs incurred by the Funds for those services. The Board members reviewed
information concerning the Funds' expense ratios, and comparative information
with respect to similar products. They discussed that, in all cases, the Funds
enjoy expense levels within the group of lowest cost funds in each peer group
comparison. In light of this information, the Board members determined that the
level of expenses incurred was reasonable in relation to the services provided
to the Funds.
Fall-Out Benefits
The Board members considered other actual and potential financial benefits that
GEAM may derive from its relationship with the Funds, including, where
applicable, soft dollar commission benefits generated through Fund portfolio
transactions. The Board members noted, however, that the Funds benefit from the
vast array of resources available through GEAM, and that each Fund represents
only a small amount of the overall assets managed by GEAM.
Conclusion
No single factor was determinative to the Board's decision. Based on their
discussion and such other matters as were deemed relevant, the Board members
concluded that the proposed level of cost reimbursement to GEAM and projected
total expense ratios for the Funds are reasonable in relation to the services
provided. In view of these facts, the Board members concluded that the renewal
of each advisory agreement was in the best interests of the Funds and their
shareholders.
51
[GRAPHIC]
Information about Trustees and Executive Officers:
The business and affairs of the Trust are managed under the direction of the GE
S&S Mutual Funds' Board of Trustees. Information pertaining to the Trustees and
officers of the Trust is set forth below.
Interested Trustees and Executive Officers
- --------------------------------------------------------------------------------
James W. Ireland III
- --------------------------------------------------------------------------------
Address c/o GEAM 3001 Summer St. Stamford, CT 06905
Age 54
Position Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - two years
Principal Occupation(s) During Past 5 Years President, Chief Executive Officer,
and Director of GEAM since June 2007; President, NBC Universal Television
Stations from December 1999 to July 2007.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of the Norman Rockwell Museum since
September 1997 and Treasurer of the Norman Rockwell Museum Board of Trustees
since September 1998; Member of the Board of Directors of the Damon Runyon
Cancer Research Foundation since October 2008; Trustee and Vice Chair of the
Campaign Steering Committee of St. Lawrence University since July 2001; Trustee
of Elfun Funds and General Electric Pension Trust since July 2007.
- --------------------------------------------------------------------------------
Daniel O. Colao
- --------------------------------------------------------------------------------
Address c/o GEAM, 3001 Summer St. Stamford, CT 06905
Age 43
Position Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - one year
Principal Occupation(s) During Past 5 Years Executive Vice President and Chief
Financial Officer of GEAM since July 2008; Global Chief Financial Officer of
Lehman Brothers Investment Management Division from March 2008 to July 2008;
Managing Director and Global Chief Financial Officer of Lehman Brothers Bank
and Mortgage Capital Division from March 2007 to March 2008; Chief Financial
Officer of GE Aviation Services from August 2005 to March 2007; Chief Financial
Officer of GE Vendor Financial Services from August 2004 to August 2005; GE
Corporate Financial Planning and Analysis (FP&A) manager from June 2004 to
August 2004; Chief Financial Officer of GE Fleet Services from January 2001 to
June 2004.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since July 2008; Director of GE Asset Management Limited (GEAML)
since August 2008.
- --------------------------------------------------------------------------------
Paul M. Colonna
- --------------------------------------------------------------------------------
Address c/o GEAM, 3001 Summer St. Stamford, CT 06905
Age 41
Position Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - two years
Principal Occupation(s) During Past 5 Years President - Fixed Income at GEAM
since March 2007; Executive Vice President of GEAM from February 2007 to March
2007; Senior Vice President-Total Return Management at GEAM from March 2005 to
March 2007; Senior Vice President-Structured Products at GEAM from March 2002
to March 2005.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since February 2007; Director of GE Asset Management Limited
(GEAML) since December 2007.
52
[GRAPHIC]
- --------------------------------------------------------------------------------
Michael J. Cosgrove
- --------------------------------------------------------------------------------
Address c/o GEAM 3001 Summer St. Stamford, CT 06905
Age 60
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - 22 years
Principal Occupation(s) During Past 5 years President and Chief Executive
Officer - Mutual Funds and Intermediary Business of GEAM since March 2007;
Executive Vice President of GEAM from February 2007 to March 2007; Vice
President, GE Capital Corporation, an indirect wholly-owned subsidiary of GE,
since December 1999; Executive Vice President - Mutual Funds of GEAM, a
wholly-owned subsidiary of GE that is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, since March 1993; Director of
GEAM since 1988.
Number of Portfolios in Fund Complex Overseen by Trustee 51
Other Directorships Held by Trustee Chairman of the Board and President of GE
Funds since 1993 and GE Institutional Funds, GE LifeStyle Funds and GE
Investments Funds, Inc. since 1997; Trustee of Elfun Funds and General Electric
Pension Trust since 1988; Trustee of Fordham University and Elfun Foundation;
Director, GE Asset Management (Ireland), GE Asset Management Funds Plc, GE
Asset Management Canada Company, GE Asset Management Limited and GE Volunteers.
- --------------------------------------------------------------------------------
Amiel H. Goldberg
- --------------------------------------------------------------------------------
Address c/o GEAM, 3001 Summer St. Stamford, CT 06905
Age 46
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - less than one year
Principal Occupation(s) During Past 5 Years Senior Vice President, Chief Risk
Officer of GEAM since June 2009; Executive Director and Investment Banker -
Financial Institutions Solutions Group of UBS Investment Bank from April 2007
to May 2008; Senior Vice President - Enterprise Wide Finance and Divisional
Finance Officer - Commercial Banking Group of WaMu from January 2007 to April
2007; Senior Vice President - Enterprise Wide Finance and Treasury Integration
and Methods Executive of WaMu from July 2005 to December 2006; Vice
President/Director and Head of Asset-Liability Management of CoBank, ACB from
January of 2000 to June 2005.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds, GE Savings &
Security Funds and General Electric Pension Trust since June 2009.
- --------------------------------------------------------------------------------
Ralph R. Layman
- --------------------------------------------------------------------------------
Address c/o GEAM 3001 Summer St. Stamford, CT 06905
Age 54
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - 18 years
Principal Occupation(s) During Past 5 years President and Chief Investment
Officer - Public Equities and a Director at GEAM since July 2009; President -
International Equities from March 2007 to July 2009; Executive Vice President
of GEAM from 1993 to March 2007; Executive Vice President - International
Equity Investments at GEAM from 1993 to March 2007; Executive Vice President -
International Equity Investments of GEIC from 1993-2000 (when GEIC was merged
into GEAM); Senior Vice President - International Equity Investments of GEAM
and GEIC from 1991 until 1993; Executive Vice President, Partner and Portfolio
Manager of Northern Capital Management from 1989-1991; and prior thereto, Vice
President and Portfolio Manager of Templeton Investment Counsel.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since 1993; Director of GE Asset Management Limited (GEAML) since
September 1995.
53
[GRAPHIC]
- --------------------------------------------------------------------------------
Matthew J. Simpson
- --------------------------------------------------------------------------------
Address c/o GEAM, 3001 Summer St. Stamford, CT 06905
Age 48
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served two years
Principal Occupation(s) During Past 5 Years Executive Vice President, General
Counsel and Secretary of GEAM since July 2007; Senior Vice President and
General Counsel - Marketing and Client Services (formerly Asset Management
Services) at GEAM and Senior Vice President and General Counsel of GEAMS from
February 1997 to July 2007; from October 1992 to February 1997, Vice President
and Associate General Counsel of GEAM; Secretary of GE Funds, GE Institutional
Funds, GE LifeStyle Funds and GE Investments Funds, Inc. from 1997 to July 2007
and Vice President from September 2003 to July 2007; Assistant Secretary of
Elfun Funds and GE Savings & Security Funds from 1998 to July 2007 and Vice
President from October 2003 to July 2007.
Number of Portfolios in Fund Complex Overseen by Trustee 51
Other Directorships Held by Trustee Trustee of GE Funds, GE Institutional Funds
and GE LifeStyle Funds since July 2007; Director of GE Investments Funds, Inc.
since July 2007; Trustee of Elfun Funds, GE Savings & Security Funds and
General Electric Pension Trust since July 2007.
- --------------------------------------------------------------------------------
Judith A. Studer
- --------------------------------------------------------------------------------
Address c/o GEAM 3001 Summer St. Stamford, CT 06905
Age 57
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - 6 years
Principal Occupation(s) During Past 5 years Director and Chief Market
Strategist at GEAM since July 2009; President - U.S. Equities at GEAM from June
2007 until July 2009; Executive Vice President of GEAM from 2006 to June 2007;
Executive Vice President - Investment Strategies from July 2006 to June 2007;
Senior Vice President - International Equities of GEAM from 1995-2006.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since 2004.
- --------------------------------------------------------------------------------
Donald W. Torey
- --------------------------------------------------------------------------------
Address c/o GEAM 3001 Summer St. Stamford, CT 06905
Age 52
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - 16 years
Principal Occupation(s) During Past 5 years President - Alternative Investments
at GEAM since March 2007; Executive Vice President of GEAM from 1997 to March
2007; Executive Vice President - Alternative Investments from 1997 to March
2007; Director of GEIC from 1993-2000 (when GEIC was merged into GEAM);
Executive Vice President - Alternative Investments of GEIC from 1997-2000;
Executive Vice President - Finance and Administration of GEAM and GEIC from
1993 to 1997; Manager - Mergers and Acquisitions Finance for GE from 1989-1993;
Vice President - Private Placements of GEIC from 1988-1989.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since 1993.
- --------------------------------------------------------------------------------
John J. Walker
- --------------------------------------------------------------------------------
Address c/o GEAM 3001 Summer St. Stamford, CT 06905
Age 56
Position(s) Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - 10 years
Principal Occupation(s) During Past 5 years Chief Operating Officer of GEAM
since January 2008; Chief Financial Officer of GEAM from 1999-2008; Chief
Financial Officer of GEIC from 1999-2000 (when GEIC was merged into GEAM);
Chief Financial Officer of GE Capital - Global Consumer Finance from 1996-1999;
Chief Financial Officer of GE Capital - Commercial Finance from 1992 to 1996;
Finance Director of GE Capital - TIFC from 1988-1992.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since 1999; Director of GE Asset Management Limited (GEAML) since
July 1995.
54
[GRAPHIC]
- --------------------------------------------------------------------------------
David Wiederecht
- --------------------------------------------------------------------------------
Address c/o GEAM, 3001 Summer St. Stamford, CT 06905
Age 53
Position Held with Fund Trustee
Term of Office and Length of Time Served Until successor is elected and
qualified - One year
Principal Occupation(s) During Past 5 Years Director of GEAM and President and
Chief Investment Officer - Investment Strategies since February 2008; Managing
Director - Alternative Investments from 2004 to 2008; Vice President -
Alternative Investments/Private Equity/Hedge Fund from 1998 to 2004.
Number of Portfolios in Fund Complex Overseen by Trustee 8
Other Directorships Held by Trustee Trustee of Elfun Funds and General Electric
Pension Trust since 2008; Director of Edmunds Holding Company since 1999;
Director of The Ritten-house Hotel and Condominium since 1992; Director of
Ross-Simons, Inc. since 2001.
55
[GRAPHIC]
Investment Adviser
GE Asset Management Incorporated
Program Trustees and Officers of the Investment Adviser
James W. Ireland III, Trustee, President and Chief Executive Officer of GE
Asset Management Incorporated (GEAM)
Cheryl H. Beacock, Senior Vice President of GEAM, Human Resources
Daniel O. Colao, Trustee, Executive Vice President of GEAM, Chief Financial
Officer
Paul M. Colonna, Trustee, President and Chief Investment Officer - Fixed Income
Investments
Michael J. Cosgrove, Trustee, President and CEO - Mutual Funds and Intermediary
Business
Amiel H. Goldberg, Trustee, Senior Vice President of GEAM, Chief Risk Officer
Ralph R. Layman, Trustee, President and Chief Investment Officer - Public
Equity Investments (since July 2009)
Maureen B. Mitchell, President - Institutional Sales and Marketing (since July
2009)
Matthew J. Simpson, Trustee, Executive Vice President of GEAM, General Counsel
and Secretary
Judith M. Studer, Trustee, President - Chief Market Strategist (since July 2009)
Donald W. Torey, Trustee, President - Alternative Investments and Real Estate
John J. Walker, Trustee, Executive Vice President of GEAM, Chief Operating
Officer
David Wiederecht, Trustee, President and Chief Investment Officer - Investment
Strategies
Portfolio Managers
GE S&S Program Mutual Fund GE S&S Income Fund
Team Members: George A. Bicher Team led by Paul M. Colonna
Stephen V. Gelhaus Team Members: William Healey
Thomas R. Lincoln Mark H. Johnson
Paul C. Reinhardt Vita Marie Pike
Independent Registered Public Accounting Firm
KPMG LLP
Custodian
State Street Bank & Trust Company
Shareholder Servicing Agent
Address all inquiries inside the Program to: Address all inquiries outside the Program to:
GE S&SP Service Center GE S&S Mutual Funds
c/o Fidelity Investments c/o PNC Global Investment Servicing
P.O. Box 770003 P.O. Box 9838
Cincinnati, OH 45277-0065 Providence, RI 02940
56
[GRAPHIC]
INSIDE THE SAVINGS & SECURITY PROGRAM
Shares or units held inside the Program have been credited to your account
as a result of contributions and investment earnings. For a statement
summarizing your account balance in the Program, please refer to Your
Personal Share statement (a copy of which may be obtained on
benefits.ge.com) or your S&SP Quarterly Investment Statement, which is
provided quarterly and is available online at any time or upon request. You
may obtain additional information and process transactions on investments
held inside the Program by calling:
GE S&SP Service Center: 1-877-55-GESSP (1-877-554-3777)
or visit benefits.ge.com and click on My GE S&SP
OUTSIDE THE SAVINGS & SECURITY PROGRAM
If shares of Program Mutual and Income Funds have been distributed to you
from the Program, information on these investments may be obtained by
calling:
GE Asset Management -- Shareholder Services: 1-800-242-0134
or visit www.geam.com
57
GE S&S Funds
3001 Summer Street
Stamford, CT 06905
Distributor
GE Investment Distributors Inc.
Member FINRA and SIPC
3001 Summer Street
PO Box 7900
Stamford, CT 06904-7900
www.geam.com
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission for the first, second and third quarters
of each fiscal year on Form N-Q. The Funds' Forms N-Q, as well as a
description of the policies and procedures that the Funds use to determine
how to vote proxies (if any) relating to portfolio securities is available
without charge (i) upon request, by calling 1-800-242-0134; (ii) on the
Funds' website at http://www.geam.com; and (iii) on the Commission's website
at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the
Commission's Public Reference Room in Washington, DC -- information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
Information (if any) regarding how the Funds voted proxies relating to
portfolio securities during the most recently disclosed 12-months period
ended June 30 is available without charge (i) through the Funds' website at
http://www.geam.com; and (ii) on the Commission's website at
http://www.sec.gov.
[LOGO] SS-1 (2/10)
---------------------------------------------------
ITEM 2. CODE OF ETHICS.
Please refer to the Code of Ethics included in the following link:
www.ge.com/files/usa/en/commitment/social/integrity/downloads/english.pdf
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that both John R.
Costantino and William J. Lucas are designated as audit committee financial
experts for the Funds; and further that it is the finding of the Boards that
Messrs. Costantino and Lucas, the audit committee financial experts, qualify
as being 'independent' pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. The aggregate fees billed for each of the last two fiscal
years (the "Reporting Periods") for professional services rendered by the
Registrant's principal accountant (the "Auditor") for the audit of the
Registrant's annual financial statements, or services that are normally
provide by the Auditor in connection with the statutory and regulatory
filings or engagements for the Reporting Periods were $20,300 in 2008 and
$20,300 in 2009.
(b) AUDIT RELATED FEES. There were no fees billed by the Auditor for
assurance and related services that were related to the performance of the
audit for the Registrant during the Reporting Periods.
(c) TAX FEES. There were no fees billed for professional services
rendered by the Auditor for tax compliance, tax advice or tax planning for
the Registrant during the Reporting Periods.
(d) ALL OTHER FEES. There were no fees billed for products and services
provided by the Auditor, other than the services reported in paragraphs
(a) through (c) of this Item for the Registrant during the Reporting Periods.
(e) (1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES.
The Audit Committee of the S&S Funds (the "Funds") Board of
Trustees is responsible, among other things, for the appointment,
compensation and oversight of the work of the Fund's independent
accountants/auditors (the "Auditor"). As part of this responsibility and
to ensure that the Auditor's independence is not impaired, the Audit Committee
(1) pre-approves the audit and non-audit services provided to the Funds by
the Auditor, and (2) all non-audit services provided to the Funds' investment
adviser and covered affiliates (as defined in the Audit Committee Charter) that
provide ongoing services to the Funds if the services directly impact the
Funds' operations or financial reporting, in accordance with the Audit
Committee Charter. Following are excerpts from the Audit Committee Charter
that sets forth the pre-approval policies and procedures:
1. Selection and Pre-Approval of Auditor and Approval of Fees.
(i) The Audit Committee shall pre-approve the selection of the Auditor and
shall recommend for ratification the selection, retention or termination of the
Auditor by the full Board, including the independent Trustees/Directors, and,
in connection therewith, shall evaluate the independence of the Auditor,
including: (i) an evaluation of whether the Auditor provides any consulting
services to the Fund's investment adviser and the extent to which the Auditor
provides non-audit services to the Fund's investment adviser and certain other
affiliated service providers as defined in Section 2(f) below, which services
are not subject to the pre-approval requirements set forth in Section 4 below;
(ii) an evaluation of the extent to which the Auditor has any relationships
with the Fund or its affiliated persons that are brought to the attention of
the Audit Committee by the Auditor in accordance with applicable standards of
the Independence Standards Board ("ISB"), because, in the Auditor's
professional judgment, such relationships may reasonably be thought to bear
on the Auditor's independence with respect to the Fund; and (iii) monitoring
the Auditor's compliance with respect to the rotation requirements for the
lead and coordinating partners having primary responsibility for the Fund's
audits and any partner responsible for the reviewing the Fund's audits.
The Audit Committee shall review the Auditor's specific representations as
to its independence.
(b) The Audit Committee shall pre-approve and review the fees charged by
the Auditor for audit and non-audit services to be provided to the Fund and
certain affiliated service providers (as defined in Section 2(f) below) in
accordance with the pre-approval requirements set forth in Section 4 below.
The Fund shall provide for appropriate funding, as determined by the Audit
Committee, to compensate the Auditor for any authorized service provided to
the Fund.
2. Meetings with the Auditor. The Audit Committee shall meet with the
Auditor, including private meetings, prior to the commencement of substantial
work on the audit and following the conclusion of the audit, as well as such
other times as the Audit Committee shall deem necessary or appropriate. The
Auditor shall report directly to the Audit Committee. The Auditor shall
report at least annually, concerning the following and other pertinent matters:
(a) to review the arrangements for and scope of the annual audit and any
special audits;
(b) to provide the Auditor the opportunity to report to the Audit
Committee, on a timely basis, all critical accounting policies and practices
to be used;
(c) to discuss any matters of concern relating to the Fund's financial
statements, including: (i) any adjustments to such statements recommended by
the Auditor, or other results of said audit(s), and (ii) any alternative
treatments of financial information within GAAP that have been discussed with
Fund management, the ramifications of the use of such alternative disclosures
and treatments, and the treatment preferred by the Auditor;
(d) to provide the Auditor the opportunity to report to the Audit
Committee, on a timely basis, any material written communication between the
Auditor and Fund management, such as any management letter or schedule of
unadjusted differences;
(e) to discuss the opinion the Auditor has rendered regarding the Fund's
financial statements;
(f) to report all non-audit services that do not require Audit Committee
pre-approval and are provided to certain affiliated persons of the Fund,
including: (1) the Fund's investment adviser or sub-advisers (but excluding
any investment sub-adviser whose role is primarily portfolio management and
is overseen by the investment adviser), (2) the Fund's principal underwriter,
and (3) any entity controlling, controlled by, or under common control with
the investment adviser or principal underwriter, that provides "ongoing"
services to the Funds in accordance with the pre-approval requirements of
paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X (each, a "Covered Affiliate"
and collectively, "Covered Affiliates");
(g) to review, in accordance with current standards of ISB, all
relationships between the Auditor and the Fund or its affiliated persons that,
in the Auditor's professional judgment, may reasonably be thought to bear
on its independence, and to confirm, in light of such information, whether
the Auditor believes, in its professional judgment, that it may properly serve
as independent accountants/auditors with respect to the Fund;
(h) to consider the Auditor's comments with respect to the Fund's financial
policies, procedures and internal accounting controls and responses thereto by
the Fund's officers and Fund management, as well as other personnel;
(i) to investigate any improprieties or suspected improprieties in the
operations of the Fund to the extent necessary or appropriate in light of any
internal investigations by the Fund's officers and/or by officers or employees
of the Fund management of such improprieties;
(j) to receive periodic reports concerning regulatory changes and new
accounting pronouncements that significantly affect the value of the Fund's
assets and their financial reporting;
(k) to report on the Fund's qualification under Subchapter M of the Internal
Revenue Code, amounts distributed and reported to shareholders for Federal tax
purposes and the Fund's tax returns; and
(l) to provide the Auditor the opportunity to report on any other matter
that the Auditor deems necessary or appropriate to discuss with the Audit
Committee.
If the Auditor's report on the above-listed (and other pertinent)
matters is not made in person to the Audit Committee within 60 days following
the end of the Fund's fiscal year, the Auditor shall deliver a written report
to the Audit Committee concerning these matters within such 60 day period.
3. Change in Accounting Principles. The Audit Committee shall consider
the effect upon the Fund of any changes in accounting principles or practices
proposed by the Auditor or the Fund's officers.
4. Pre-Approval of Audit Related Services and Permissible Non-Audit
Services. The Audit Committee shall pre-approve both audit (including audit,
review, and attest) services and permissible non-audit services provided to
the Fund and, if the nature of the engagement relates directly to the
operations and financial reporting of the Fund, permissible non-audit services
provided to any Covered Affiliate.
The Audit Committee may determine to delegate the authority to grant
pre-approvals to one or more Audit Committee members, each acting on behalf
of the Audit Committee. In this event, the member of the Audit Committee so
delegated shall report each delegated pre-approval to the Audit Committee at
its next regularly scheduled meeting. The Audit Committee may also adopt and
follow, in lieu of explicit pre-approval described above, written policies
and procedures detailed as to the particular service, designed to safeguard
the continued independence of the Auditor, consistent with the requirements
of the Act and SEC regulations thereunder.
Notwithstanding the foregoing, the pre-approval requirement concerning
permissible non-audit services provided to the Fund or any Covered Affiliate
is waived if: (1) the aggregate amount of all such non-audit services provided
constitutes no more than five percent (5%) of the total amount of revenues paid
to the Auditor by the Fund and the Covered Affiliates during the fiscal year in
which the services are provided that would have to be pre-approved by the Audit
Committee, (2) the non-audit services were not recognized as non-audit services
at the time of the engagement, and (3) such non-audit services are promptly
brought to the attention of the Audit Committee and approved by the Audit
Committee or one or more designated members of the Audit Committee prior to the
completion of the audit.
5. Prohibited Activities of the Auditor. The Audit Committee shall confirm
with the Auditor that it is not performing contemporaneously (during the audit
and professional engagement period) non-audit services for the Fund that the
Audit Committee believes may taint the independence of the Auditor.
The Auditor will be responsible for informing the Audit Committee of whether it
believes that a particular non-audit service is permissible or prohibited
pursuant to applicable regulations and standards.
(2) PERCENTAGE OF SERVICES IN PARAGRAGHS (b) THROUGH (d) APPROVED BY AUDIT
COMMITTEE. No fees were charged during 2008 or 2009 for audit related, tax or
other services as indicated in sections (b) through (d) of this Item.
(f) Not applicable.
(g) NON-AUDIT FEES. The aggregate non-audit fees billed by the Auditor
for services rendered to the Registrant, and rendered to Service Affiliates,
for the Reporting Periods were $0 in 2008 and $0 in 2009.
(h) AUDITOR INDEPENDENCE. There were no non-audit services rendered to
Service Affiliates that were not pre-approved.
ITEM 5. Audit Committee of Listed Registrants
The Registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act.
The Registrant's audit committee members are: John R. Costantino,
William J. Lucas and Robert P. Quinn.
ITEM 6. Schedule of Investments.
Attached as part of ITEM 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Applicable only to Closed-End Management Investment Companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Applicable only to Closed-End Management Investment Companies.
ITEM 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
Applicable only to Closed-End Management Investment Companies.
ITEM 10. Submission of Matters to a Vote of Security Holders.
No material changes.
ITEM 11. CONTROLS AND PROCEDURES.
The officers providing the certifications in this report in accordance
with Rule 30a-3 under the Investment Company Act of 1940 have concluded,
based on their evaluation of the registrant's disclosure controls and
procedures (as such term is defined in such rule), that such controls and
procedures are adequate and reasonably designed to achieve the purpose
described in paragraph (c) of such rule.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their last evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS.
(a) Not applicable.
(b) Attached hereto as Exhibit 1 and Exhibit 2 are the Certifications of
John H. Myers and Scott Rhodes as principal executive officer and
principal financial officer, respectively, as required by Rule 30a-2 under
the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GENERAL ELECTRIC S&S PROGRAM MUTUAL FUND
By: /S/JAMES W.IRELAND
James W.Ireland
TRUSTEE, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
GE ASSET MANAGEMENT INCORPORATED
Date: March 08, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
By: /S/JAMES W.IRELAND
James W.Ireland
Chairman, S&S FUNDS
Date: March 08, 2010
By: /S/EUNICE TSANG
Eunice Tsang
TREASURER, S&S FUNDS
Date: March 08, 2010
EXHIBIT INDEX
(b)(1) Certifications of principal executive officer and
principal financial officer as required by Rule 30a-2 under the
Investment Company Act of 1940.
(b)(2) Certification of principal executive officer and
principal financial officer as required by Section 906 of the
Sarbanes-Oxley Act of 2002.