OMB APPROVAL
OMB Number: 3235-0570
Expires: August 31, 2010
Estimated average burden
hours per response: 18.9
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: : 12/31/07
-------------------------
<page>
ITEM 1. REPORTS TO STOCKHOLDERS.
S&S PROGRAM
Program Mutual Fund
Income Fund
Annual Report
December 31, 2007
[GE LOGO OMITTED]
<page>
Contents
- --------------------------------------------------------------------------------
NOTES TO PERFORMANCE ................................................... 1
MANAGER REVIEWS AND SCHEDULES OF INVESTMENTS
PROGRAM MUTUAL FUND ................................................. 2
INCOME FUND ......................................................... 10
NOTES TO SCHEDULES OF INVESTMENTS ...................................... 27
FINANCIAL STATEMENTS
Financial Highlights ................................................ 28
Statements of Assets and Liabilities ................................ 30
Statements of Operations ............................................ 31
Statements of Changes in Net Assets ................................. 32
Notes to Financial Statements ....................................... 33
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ................ 41
TAX INFORMATION ........................................................ 42
ADVISORY AGREEMENT RENEWAL ............................................. 43
ADDITIONAL INFORMATION ................................................. 46
INVESTMENT TEAM ........................................................ 49
<page>
Notes to Performance (unaudited)
- --------------------------------------------------------------------------------
Information on the subsequent 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 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 all dividends and capital gains distributions, if any.
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. Please call 800-242-0134 for the most recent month-end performance
data.
Shares of the Funds are neither insured nor guaranteed by the U.S. Government,
and their prices will fluctuate with market conditions.
The Standard & Poor's ("S&P") 500(R) Index of stocks (S&P 500 Index) and the
Lehman Brothers Aggregate Bond Index (LB 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 Index 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. LB 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. This index is designed to
represent the performance of the U.S. investment-grade first-rate bond market.
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
<page>
GE S&S Program Mutual Fund
- --------------------------------------------------------------------------------
THE GE S&S PROGRAM MUTUAL FUND IS MANAGED BY A TEAM OF PORTFOLIO MANAGERS THAT
INCLUDES THOMAS R. LINCOLN, PAUL C. REINHARDT, STEPHEN V. GELHAUS AND GEORGE A.
BICHER (PICTURED BELOW FROM LEFT TO RIGHT). EACH OF THE FOREGOING PORTFOLIO
MANAGERS MANAGES (OR CO-MANAGES) ONE OF THREE SUB-PORTFOLIOS, WHICH COMPRISE THE
FUND. 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 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.
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.
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.
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.
[PHOTO OMITTED]
2
<page>
- --------------------------------------------------------------------------------
Q&A
Q. HOW DID THE GE S&S PROGRAM MUTUAL FUND PERFORM COMPARED TO ITS BENCHMARK
AND LIPPER PEER GROUP FOR THE TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2007?
A. For the twelve-month period ended December 31, 2007, the GE S&S Program
Mutual Fund returned 8.53%. The S&P 500 Index, the Fund's benchmark,
returned 5.50% and the Fund's Lipper peer group of 835 Large-Cap Core funds
returned an average of 5.73% for the same period.
Q. WHAT MARKET CONDITIONS IMPACTED FUND PERFORMANCE?
A. In the first half of the year, stocks rallied due to strong corporate
earnings, record M&A activity, cooling inflation worries and in the absence
of Fed tightening. The market's climb was interrupted by global liquidity
concerns in February, and again in late June and July of 2007, amid a credit
crunch brought about by rising sub-prime mortgage defaults. However,
accommodative actions by the Fed in late summer/early fall propelled the
markets higher, and the S&P 500 reached a record high of 1,565 in early
October as Fed remarks allayed investor concerns that the economy was headed
for recession. However, stocks pulled back sharply during the balance of the
fourth quarter, reflecting investor concerns over the economic impact of the
housing- and credit-market turmoil and record-high oil prices. In this
environment, the growth style of investing outperformed the value style for
the first time in seven years. Large caps also outperformed small, as these
higher-quality companies are better able to sustain earnings growth during a
significant economic slowdown.
Eight out of ten S&P 500 sectors had positive returns, and each of these was
in the double-digits, led by sectors tilted toward global infrastructure
investment and booming commodity prices, including energy (+35%) and
materials (+23%). Utilities (+20%) were a good place to be, and technology
(+16%) showed strength as the sector's high proportion of non-US revenues
promised some insulation from a slowing domestic economy. The two sectors
that lagged brought the index return down into the mid-single digits, as the
S&P 500 returned +5.5% for the year. Financials (-19%) lagged the most,
facing credit cycle headwinds and broken balance sheets. Consumer
discretionary (-13%) also lagged the broad market as the recession debate
increased.
Q. WHAT WERE THE PRIMARY DRIVERS OF FUND PERFORMANCE?
A. The Fund's preference for large, high quality companies paid off in a year
where stock market volatility increased. Underweighting financials -- the
S&P 500's worst performing sector -- was the Fund's primary driver of
outperformance. Underweighting commercial banks and consumer finance
companies, as well as focusing on State Street (+22%) within the capital
markets industry, provided key downside protection. Strong stock selection
in the materials, industrials and energy sectors also drove gains. While
these sectors have been buoyed by robust investment in developing economies,
the Fund has owned some the top performers, including Hess (+105%), global
oil services giants Transocean (+67%) and Schlumberger (+57%), aerospace
leader Textron (+54%) and agricultural
3
<page>
GE S&S Program Mutual Fund
- --------------------------------------------------------------------------------
Q&A
bioengineering company Monsanto (+115%). Defensive consumer staples stocks
also benefited the Fund against the backdrop of a slowing U.S. economy, with
large cap multinationals like Pepsi (+24%) and Procter & Gamble (+17%)
boosting returns.
Partially offsetting the Fund's broad-based strength were negative
contributions from healthcare and telecommunications. Most notable was a
pullback in Amgen (-32%), which suffered amid safety concerns regarding its
anemia drugs and increased FDA scrutiny. However, we continued to like the
strength in Amgen's pipeline of biotech products, and its long-term
prospects. Our continued underweight in telecommunications was another key
detractor. While we have been adding to our position in AT&T (+21%), our
underweight versus the benchmark hampered returns, as did the lag in Latin
wireless provider, NII Holdings (-38%). We continued to believe that the
cable companies would be more successful taking share from phone companies
rather than vice versa, hence our larger relative weighting in media, taking
a long-term view. Unfortunately, disappointing results at cable giant,
Comcast (-35%) detracted from relative performance this year.
Q. WERE THERE ANY SIGNIFICANT CHANGES TO THE FUND OVER THE PERIOD?
A. There were no significant changes to the Fund during the year, as we have
remained committed to investing in high quality large-cap stocks with
predictable and steady earnings growth at compelling valuations. We continue
to be relatively defensively positioned, although at year-end, our largest
overweight was in technology -- an area that we believe could benefit from
multiple expansion in the months to come due to the large international
component of tech earnings, and its above average growth prospects. Overall,
our tech holdings tend not to be the most economically sensitive, with high
recurring revenues and ample free cash flow. We added to our overweight in
consumer staples and materials during the period. We also capitalized on
strength in the energy and utilities sectors to take some profits, and we
reduced our overweight in healthcare due to some increased uncertainty in
the risk landscape.
The U.S. has experienced economic growth that we believe was below potential
in 2007, and earnings growth has slowed. We are constructive on our
positioning in this environment and the high quality of our holdings. We had
expected the companies in the Fund's portfolio to demonstrate the financial
flexibility and balance sheet strength to weather a mid-cycle slowdown, and
to be bolstered by a flight to quality in skittish markets. Valuations of
larger, high-quality companies sold at little or no premium in the past
year. We believe that many of our stock selections will benefit from
improving valuations and superior relative earnings growth. In addition,
many of our multinationals will likely benefit from strong growth outside of
North America. We remain focused on a long-term investment horizon and
continue to utilize a bottom-up, research-driven, fundamental approach to
stock selection.
4
<page>
GE S&S Program Mutual Fund
- --------------------------------------------------------------------------------
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 each 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, 2007.
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 $1,000 = 8.6), then multiply the result by the number
given for your class under the heading "Expenses Paid During Period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholders
reports of other funds.
Please note that the expenses shown in the table do not reflect any transaction
costs, such as sales charges or redemption fees.
JULY 1, 2007 - DECEMBER 31, 2007
- ---------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT ACCOUNT VALUE EXPENSES
THE BEGINNING OF AT THE END OF PAID DURING
THE PERIOD ($) THE PERIOD ($) THE PERIOD ($)*
- ---------------------------------------------------------------------------------------------------------------------------
Actual Fund Return** 1,000.00 1,013.14 0.51
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical 5% Return
(2.5% for the period) 1,000.00 1,024.41 0.51
- ---------------------------------------------------------------------------------------------------------------------------
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 0.10% (FROM
PERIOD JULY 1, 2007 - DECEMBER 31, 2007), MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY 184/365 (TO REFLECT THE SIX MONTH
PERIOD).
** ACTUAL FUND RETURNS FOR SIX-MONTH PERIOD ENDED DECEMBER 31, 2007 ARE AS
FOLLOWS: 1.31%.
5
<page>
GE S&S Program Mutual Fund
- --------------------------------------------------------------------------------
CHANGE IN VALUE OF A $10,000 INVESTMENT
[LINE CHART OMITTED PLOT POINTS FOLLOWS]
GE S&S PROGRAM
MUTUAL FUND S&P 500 INDEX
12/97 $10000 $10000
12/98 12378 12870
12/99 14821 15581
12/00 14830 14150
12/01 13535 12465
12/02 10976 9710
12/03 13585 12499
12/04 14740 13859
12/05 15174 14541
12/06 17726 16837
12/07 19239 17763
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2007
- --------------------------------------------------------------------------------
ONE FIVE TEN
YEAR YEAR YEAR
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund 8.53% 11.88% 6.76%
- --------------------------------------------------------------------------------
S&P 500 Index 5.50% 12.84% 5.91%
- --------------------------------------------------------------------------------
GE S&S Program Mutual Fund (ending value $19,239)
S&P 500 Index (ending value $17,763)
INVESTMENT PROFILE
A fund designed for investors who seek long-term growth of capital and
income by investing primarily in a diversified portfolio of equity
securities of U.S. companies.
* LIPPER PERFORMANCE COMPARISON
LARGE CAP CORE PEER GROUP
BASED ON AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 12/31/07
ONE FIVE TEN
YEAR YEAR YEAR
Fund's rank in peer group: 220 264 45
Number of Funds in peer group: 835 572 287
Peer group average annual total return: 5.73% 11.70% 5.04%
Lipper categories in peer group: Large Cap Core
* SEE NOTES TO PERFORMANCE FOR THE EXPLANATION OF PEER CATEGORIES.
TOP TEN HOLDINGS
AS OF DECEMBER 31, 2007
AS A % OF MARKET VALUE
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 3.39%
- --------------------------------------------------------------------------------
Microsoft Corp. 3.21%
- --------------------------------------------------------------------------------
American International
Group, Inc. 3.05%
- --------------------------------------------------------------------------------
Procter & Gamble Co. 3.01%
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 2.58%
- --------------------------------------------------------------------------------
PepsiCo, Inc. 2.46%
- --------------------------------------------------------------------------------
State Street Corp. 2.30%
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 2.09%
- --------------------------------------------------------------------------------
Amgen, Inc. 2.05%
- --------------------------------------------------------------------------------
Oracle Corp. 1.98%
- --------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE ON PAGE 1 FOR FURTHER INFORMATION, INCLUDING AN
EXPLANATION OF LIPPER PEER CATEGORIES.
PAST PERFORMANCE DOES NOT PREDICT FUTURE PERFORMANCE AND THE GRAPH AND TABLE DO
NOT REFLECT THE DEDUCTION OF TAXES.
6
<page>
GE S&S PROGRAM MUTUAL FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
GE S&S PROGRAM MUTUAL FUND
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION AS A % OF THE MARKET VALUE OF $4,677,821 AS OF
DECEMBER 31, 2007.
[PIE CHART OMITTED PLOT POINTS FOLLOWS]
Information Technology 22.5%
Healthcare 13.5%
Financials 13.1%
Consumer Staples 11.7%
Energy 10.6%
Industrials 9.6%
Consumer Discretionary 8.8%
Materials 3.7%
Utilities 2.8%
Telecommunication Services 2.4%
Short-Term 1.3%
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK -- 98.7%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.8%
Bed Bath & Beyond, Inc. 1,388,855 $ 40,818 (a)
Cablevision Systems Corp. 227,122 5,565 (a)
Carnival Corp. 751,981 33,456
CBS Corp. 200,624 5,467
Comcast Corp. (Class A) 3,642,860 66,009 (a)
General Motors Corp. 209,827 5,223
Kohl's Corp. 195,277 8,944 (a)
Koninklijke Philips
Electronics N.V. ADR 403,993 17,271
Liberty Global, Inc.
(Series C) 385,506 14,106 (a)
Liberty Media Holding Corp -
Capital (Series A) 203,655 23,724 (a)
Lowe's Companies, Inc. 1,279,590 28,944
News Corp. (Class A) 939,523 19,251
Omnicom Group, Inc. 1,623,136 77,148
Staples, Inc. 422,378 9,744
Target Corp. 175,768 8,788
The Cheesecake Factory 243,171 5,766 (a)
Time Warner, Inc. 1,932,286 31,902
Viacom Inc. (Class B) 182,152 8,000 (a)
410,126
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 11.7%
Alberto-Culver Co. 500,249 $ 12,276
Clorox Co. 476,956 31,083
Colgate-Palmolive Co. 630,037 49,118
Diageo PLC ADR 100,216 8,602
General Mills, Inc. 792,837 45,192
Kimberly-Clark Corp. 846,359 58,687
McCormick & Company, Inc. 607,317 23,023
Nestle S.A. ADR 134,665 15,419
PepsiCo, Inc. 1,516,005 115,065
Procter & Gamble Co. 1,917,817 140,806
Sara Lee Corp. 476,956 7,660
The Coca-Cola Co. 112,742 6,919
The Estee Lauder Companies
Inc. (Class A) 234,693 10,235
Wal-Mart Stores, Inc. 469,762 22,328
546,413
ENERGY -- 10.6%
Apache Corp. 144,060 15,492
Devon Energy Corp. 301,358 26,794
EOG Resources, Inc. 203,238 18,139
Exxon Mobil Corp. 1,693,286 158,644
Halliburton Co. 1,199,375 45,468
Hess Corp. 523,115 52,761
Marathon Oil Corp. 103,337 6,289
Nabors Industries Ltd. 264,975 7,258 (a)
Schlumberger Ltd. 765,235 75,276
Suncor Energy, Inc. 71,309 7,753
Transocean, Inc. 573,518 82,099
495,973
FINANCIALS -- 13.1%
ACE Ltd. 329,444 20,353
Allstate Corp. 363,282 18,974
American International
Group, Inc. 2,447,240 142,674
AON Corp. 375,809 17,922
Bank of New York Mellon Corp. 513,606 25,043
Berkshire Hathaway, Inc.
(Class B) 859 4,068 (a)
BlackRock Inc. (Class A) 50,108 10,863
CB Richard Ellis Group, Inc.
(Class A) 921,345 19,855 (a)
Chubb Corp. 375,809 20,512
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
7
<page>
GE S&S PROGRAM MUTUAL FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
Citigroup, Inc. 2,242,887 $ 66,031
Federal Home Loan
Mortgage Corp. 760,258 25,902
Federal National
Mortgage Assoc. 393,940 15,750
Goldman Sachs Group, Inc. 57,875 12,446
Hartford Financial Services
Group, Inc. 114,859 10,015
HCC Insurance Holdings, Inc. 258,739 7,421
JP Morgan Chase & Co. 189,582 8,275
Metlife, Inc. 819,654 50,507
State Street Corp. 1,327,824 107,819 (e)
SunTrust Banks, Inc. 359,545 22,468
US Bancorp 151,415 4,806
611,704
HEALTHCARE -- 13.5%
Abbott Laboratories 834,112 46,835
Aetna, Inc. 678,440 39,166
Amgen, Inc. 2,062,054 95,762 (a)
Baxter International, Inc. 528,465 30,677
Boston Scientific Corp. 590,701 6,870 (a)
Bristol-Myers Squibb Co. 586,731 15,560
Covidien Ltd. 421,759 18,680
DaVita, Inc. 272,462 15,353 (a)
Genentech Inc. 170,361 11,426 (a)
Gilead Sciences, Inc. 487,710 22,440 (a)
GlaxoSmithKline PLC ADR 219,186 11,045
Johnson & Johnson 409,144 27,290
Lincare Holdings Inc. 74,996 2,637 (a)
McKesson Corp. 291,252 19,080
Medco Health Solutions, Inc. 52,99 5 5,374 (a)
Medtronic Inc. 696,908 35,034
Merck & Company, Inc. 304,904 17,718
Novartis AG ADR 72,030 3,912
Resmed, Inc. 475,965 25,002 (a)
Thermo Electron Corp. 115,875 6,684 (a)
UnitedHealth Group, Inc. 1,678,800 97,706
Wyeth 1,713,461 75,718
629,969
INDUSTRIALS -- 9.6%
ABB Ltd. ADR 501,079 14,431
CAE, Inc. 1,964,606 26,495
Cooper Industries Ltd. 634,578 33,556
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
Deere & Co. 231,749 $ 21,580
Dover Corp. 1,159,725 53,452
Eaton Corp. 241,355 23,399
Emerson Electric Co. 633,596 35,900
General Dynamics Corp. 395,106 35,160
Hexcel Corp. 457,285 11,103 (a)
ITT Corp. 166,556 10,999
Monster Worldwide, Inc. 90,024 2,917 (a)
Northrop Grumman Corp. 37,854 2,977
Rockwell Collins, Inc. 50,108 3,606
Textron Inc. 1,050,387 74,893
3M Co. 291,252 24,558
United Technologies Corp. 988,800 75,683
450,709
INFORMATION TECHNOLOGY -- 22.5%
Affiliated Computer
Services, Inc. (Class A) 264,975 11,950 (a)
Alibaba.com Ltd. 325,853 1,176 (a,b)
Analog Devices, Inc. 516,738 16,381
Automatic Data
Processing, Inc. 474,222 21,117
Cisco Systems, Inc. 4,465,378 120,878 (a)
Corning Incorporated 1,011,730 24,271
Dell, Inc. 140,928 3,454 (a)
EMC Corp. 181,698 3,367 (a)
Fidelity National Information
Services, Inc. 508,455 21,147
Hewlett-Packard Co. 1,018,957 51,437
Intel Corp. 3,439,619 91,700
International Business
Machines Corp. 383,836 41,493
Intuit Inc. 948,444 29,980 (a)
Lam Research Corp. 158,985 6,873 (a)
Maxim Integrated
Products, Inc. 761,275 20,159
Microchip Technology Inc. 694,199 21,812
Microsoft Corp. 4,214,063 150,021
Molex, Inc. (Class A) 826,501 21,712
National Semiconductor Corp. 576,241 13,046
Oracle Corp. 4,092,397 92,406 (a)
Paychex, Inc. 1,209,703 43,815
QUALCOMM, Inc. 1,910,863 75,192
Research In Motion Ltd. 172,940 19,611 (a)
Salesforce.com, Inc. 78,709 4,934 (a)
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
8
<page>
GE S&S PROGRAM MUTUAL FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing
Company Ltd. ADR 1,096,112 $ 10,917
Texas Instruments
Incorporated 566,846 18,933
Western Union Co. 3,361,795 81,624
Yahoo! Inc. 1,449,590 33,717 (a)
1,053,123
MATERIALS -- 3.7%
Alcoa, Inc. 250,540 9,157
Allegheny Technologies
Incorporated 265,293 22,921
Barrick Gold Corp. 1,036,454 43,583
Freeport-McMoRan Copper &
Gold Inc. (Class B) 203,227 20,819
Monsanto Co. 417,057 46,581
PAN American Silver Corp. 227,122 7,933 (a)
Praxair, Inc. 258,708 22,950
173,944
TELECOMMUNICATION SERVICES -- 2.4%
AT&T, Inc. 187,905 7,809
NII Holdings Inc. (Class B) 1,101,697 53,234 (a)
Sprint Nextel Corp.
(Series 1) 75,707 994
Verizon Communications Inc. 1,022,900 44,691
Vodafone Group, PLC ADR 212,958 7,948
114,676
UTILITIES -- 2.8%
American Electric Power
Company, Inc. 137,797 6,416
Constellation Energy
Group, Inc. 189,268 19,406
Dominion Resources, Inc. 1,020,180 48,408
Edison International 250,540 13,371
Entergy Corp. 156,588 18,715
FPL Group, Inc. 205,022 13,896
PG&E Corp. 199,086 8,579
128,791
TOTAL INVESTMENTS
(COST $4,103,161) 4,615,428
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.3%
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
State Street Corp.
3.65% dated 12/30/07, to be
repurchased at $62,406, on
1/02/08 collateralized by
$63,645 U.S. Government
Agency Bond, 4.13%
maturing 2/15/08 01/02/08 $62,393 $ 62,393 (e)
(COST $62,393)
TOTAL INVESTMENTS
(COST $4,165,554) 4,677,821
OTHER ASSETS AND LIABILITIES,
NET-- 0.0%* 415
----------
NET ASSETS-- 100.0% $4,678,236
==========
* less than 0.1%
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
9
<page>
GE S&S Income Fund
- --------------------------------------------------------------------------------
THE GE S&S INCOME FUND IS MANAGED BY A TEAM OF PORTFOLIO MANAGERS THAT INCLUDES
SINHA CHITRANJAN, PAUL M. COLONNA, WILLIAM M. HEALEY, MARK H. JOHNSON, JAMES F.
PALMIERI, VITA MARIE PIKE AND LEWIS TATANANNI. AS LEAD PORTFOLIO MANAGER FOR THE
INCOME FUND, MR. COLONNA (PICTURED BELOW) HAS OVERSIGHT AUTHORITY OVER THE FUND.
SINHA CHITRANJAN IS A PORTFOLIO MANAGER AND SENIOR QUANT ANALYST AT GEAM. HE HAS
SERVED ON THE PORTFOLIO MANAGEMENT TEAM FOR THE GE S&S INCOME FUND SINCE
SEPTEMBER 2007. MR. SINHA JOINED GEAM IN 1997 AND BECAME A FIXED INCOME ANALYST
IN 1998. HE BECAME VICE PRESIDENT -- DERIVATIVE STRATEGIES IN 2002, SENIOR QUANT
ANALYST IN 2003, AND A PORTFOLIO MANAGER AND SENIOR QUANT ANALYST IN 2005.
PAUL M. COLONNA IS A DIRECTOR AND EXECUTIVE VICE PRESIDENT OF GE ASSET
MANAGEMENT AND PRESIDENT - FIXED INCOME 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.
MARK H. JOHNSON IS A SENIOR VICE PRESIDENT OF GEAM AND 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.
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.
JAMES F. PALMIERI IS A PORTFOLIO MANAGER OF GEAM. SINCE MARCH 2006, HE HAS
MANAGED THE MORTGAGE-BACKED SECURITIES SECTOR FOR THE GE S&S INCOME FUND. PRIOR
TO JOINING GEAM IN MARCH 2006, MR. PALMIERI WAS A DIRECTOR OF INVESTMENTS FOR
CONSTITUTION CORPORATE FEDERAL CREDIT UNION FROM FEBRUARY 2005 TO MARCH 2006 AND
A PORTFOLIO MANAGER FOR CIGNA INVESTMENT MANAGEMENT FROM JANUARY 2000 TO
FEBRUARY 2005.
LEWIS TATANANNI IS A SENIOR CORPORATE TRADER AT GEAM. HE HAS BEEN A MEMBER OF
THE PORTFOLIO MANAGEMENT TEAM FOR THE GE S&S INCOME FUND SINCE DECEMBER 2007.
MR. TATANANNI JOINED GEAM IN OCTOBER 2002 AND WAS RESPONSIBLE FOR EXECUTING THE
INTEREST RATE DERIVATIVE HEDGING PROGRAMS FOR GEAM'S INSURANCE CLIENTS. MR.
TATANANNI JOINED GE IN 1999 AS
[PHOTO OMITTED]
10
<page>
- --------------------------------------------------------------------------------
Q&A
AN ASSOCIATE AT GE CAPITAL TREASURY AND WAS RESPONSIBLE FOR DEBT ORIGINATION AND
DERIVATIVE EXECUTION.
VITA MARIE PIKE IS A 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 LIPPER
PEER GROUP FOR THE TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2007?
A. For the twelve-month period ended December 31, 2007, the GE S&S Income Fund
returned 6.03%. The Lehman Brothers Aggregate Bond Index, the Fund's
benchmark, returned 6.97% and the Fund's Lipper peer group of 547
Intermediate Investment Grade Debt Funds returned an average of 4.71% for
the same period.
Q. DESCRIBE WHAT HAPPENED IN THE U.S. ECONOMY DURING THE TWELVE-MONTH PERIOD
ENDING DECEMBER 31, 2007.
A. The U.S. economy will most likely post a GDP growth of approximately 2% in
2007, held back by recessionary conditions in the housing market. Rising
delinquencies and defaults in sub-prime mortgage loans resulted in large
pricing dislocations of securities backed by these loan types. In the
fallout, Wall Street broker/dealers were forced in the third and fourth
quarters to take write-downs in the billions from owning such securities as
well as structured vehicles backed by these security types. Investor's lack
of confidence in valuations of sub-prime mortgages spread to all risky
assets, significantly widening yield spreads in high grade and high yield
credit and emerging market debt. A flight to the safety of U.S. treasuries
pushed interest rates down, which generated a 9% total return for the
treasury sector. By year-end, 2 and 10-year note yields had fallen by 176
and 68 bps to finish at 3.05% and 4.02% respectively. All other U.S. fixed
income sectors posted positive returns for the year, but less than that of
treasuries. The Fed responded to the housing recession/sub-prime crisis by
reducing the fed funds target by 100 basis points to 4.25% starting in
September, while also injecting reserves into the financial system to
provide liquidity to banks unwilling to lend to each other. At the December
meeting, the FOMC stated "the upside risks to inflation roughly balance the
downside risks to growth". However, market pricing at year-end indicated
further rate cuts in 2008.
Q. WHAT WERE THE PRIMARY DRIVERS OF
FUND PERFORMANCE?
A. Duration and yield curve positioning biased toward lower rates and a steeper
yield curve were positive contributors to Fund performance during the year.
The underweight to investment grade corporate securities also added to
relative performance. Although allocations to high yield and emerging market
debt helped earlier in the year, exposure to these sectors hurt performance
in the final quarter as yield spreads widened quite dramatically. The Fund's
exposure to sub-prime related securities through securities lending and
mortgage-rolls negatively impacted total return for the year.
11
<page>
GE S&S Income Fund
- --------------------------------------------------------------------------------
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 each 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, 2007.
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 $1,000 = 8.6), then multiply the result by the number
given for your class under the heading "Expenses Paid During Period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholders
reports of other funds.
Please note that the expenses shown in the table do not reflect any transaction
costs, such as sales charges or redemption fees.
JULY 1, 2007 - DECEMBER 31, 2007
- ---------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT ACCOUNT VALUE EXPENSES
THE BEGINNING OF AT THE END OF PAID DURING
THE PERIOD ($) THE PERIOD ($) THE PERIOD ($)*
- ---------------------------------------------------------------------------------------------------------------------------
Actual Fund Return** 1,000.00 1,047.50 0.67
- ---------------------------------------------------------------------------------------------------------------------------
Hypothetical 5% Return
(2.5% for the period) 1,000.00 1,024.26 0.66
- ---------------------------------------------------------------------------------------------------------------------------
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 0.13% (FROM
PERIOD JULY 1, 2007 - DECEMBER 31, 2007), MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY 184/365 (TO REFLECT THE SIX MONTH
PERIOD).
** ACTUAL FUND RETURNS FOR SIX-MONTH PERIOD ENDED DECEMBER 31, 2007 ARE AS
FOLLOWS: 4.75%.
12
<page>
GE S&S Income Fund
- --------------------------------------------------------------------------------
CHANGE IN VALUE OF A $10,000 INVESTMENT
[LINE CHART OMITTED PLOT POINTS FOLLOWS]
GE S&S LB AGGREGATE
INCOME FUND BOND INDEX
12/97 $10000 $10000
12/98 10849 10869
12/99 10749 10779
12/00 11941 12033
12/01 12927 13049
12/02 14275 14387
12/03 14887 14977
12/04 15500 15627
12/05 15907 16007
12/06 16662 16700
12/07 17667 17864
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2007
- --------------------------------------------------------------------------------
ONE FIVE TEN
YEAR YEAR YEAR
- --------------------------------------------------------------------------------
GE S&S Income Fund 6.03% 4.36% 5.86%
LB Aggregate
Bond Index 6.97% 4.42% 5.97%
GE S&S Income Fund (ending value $17,667)
LB Aggregate Bond Index (ending value $17,864)
INVESTMENT PROFILE
A 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 in debt securities under normal
circumstances. 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.
* LIPPER PERFORMANCE COMPARISON
INTERMEDIATE INVESTMENT GRADE DEBT PEER GROUP
BASED ON AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 12/31/07
ONE FIVE TEN
YEAR YEAR YEAR
Fund's rank in peer group: 165 124 30
Number of Funds in peer group: 547 395 184
Peer group average annual total return: 4.71% 3.88% 5.18%
Lipper categories in peer group: Intermediate Investment Grade Debt
* SEE NOTES TO PERFORMANCE FOR THE EXPLANATION OF PEER CATEGORIES.
QUALITY RATINGS AS OF DECEMBER 31, 2007
AS A % OF MARKET VALUE
- --------------------------------------------------------------------------------
MOODY'S/S&P/ PERCENTAGE OF
FITCH RATING* MARKET VALUE
- --------------------------------------------------------------------------------
Aaa / AAA 85.45%
- --------------------------------------------------------------------------------
Aa / AA 3.41%
- --------------------------------------------------------------------------------
A / A 3.79%
- --------------------------------------------------------------------------------
Baa / BBB 3.73%
- --------------------------------------------------------------------------------
Ba / BB and lower 3.62%
- --------------------------------------------------------------------------------
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 LIPPER PEER CATEGORIES.
PAST PERFORMANCE DOES NOT PREDICT FUTURE PERFORMANCE AND THE GRAPH AND TABLE DO
NOT REFLECT THE DEDUCTION OF TAXES.
13
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
GE S&S INCOME FUND
PORTFOLIO COMPOSITION AS A % OF THE MARKET VALUE OF $3,614,213 AS OF DECEMBER
31, 2007.
Asset-Backed 41.2%
Short-Term & Others 23.6%
U.S.Treasuries 21.6%
Corporate Notes 12.5%
Federal Agencies 1.1%
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
BONDS AND NOTES -- 97.4%+
- --------------------------------------------------------------------------------
U.S. TREASURIES -- 30.9%
U.S. Treasury Bonds
4.50% 02/15/36 $ 2,530 $ 2,544(j)
4.75% 02/15/37 85,274 89,248(j)
U.S. Treasury Notes
3.63% 10/31/09 108,237 109,313(j)
4.25% 09/30/12 103,180 106,784(j)
4.50% 11/15/10 - 05/15/17 36,106 37,413(j)
4.63% 11/15/09 - 02/15/17 166,571 173,914(j)
4.75% 08/15/17 113,896 120,284(j)
4.88% 06/30/12 133,004 141,052(j)
780,552
FEDERAL AGENCIES -- 1.6%
Federal Home Loan
Mortgage Corp.
4.88% 02/09/10 39,085 40,095
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
AGENCY MORTGAGE BACKED -- 27.2%
Federal Home Loan
Mortgage Corp.
4.50% 06/01/33 - 02/01/35 $ 5,069 $ 4,794(h)
5.00% 07/01/35 - 10/01/35 6,052 5,910(h)
5.50% 05/01/20 1,121 1,135(h)
6.00% 04/01/17 - 11/01/36 11,509 11,707(h)
6.50% 01/01/27 - 08/01/36 9,496 9,789(h)
7.00% 10/01/16 - 08/01/36 3,641 3,807(h)
7.50% 11/01/09 - 09/01/33 1,021 1,063(h)
8.00% 11/01/30 15 16(h)
8.50% 04/01/30 - 05/01/30 44 47(h)
9.00% 05/01/16 - 11/01/16 224 241(h)
6.00% TBA 20,265 20,563(c)
Federal National Mortgage Assoc.
4.00% 05/01/19 - 06/01/19 4,855 4,683(h)
4.50% 05/01/18 - 02/01/35 25,261 24,526(h)
5.00% 05/01/20 - 08/01/35 21,294 20,847(h)
5.00% 07/01/35 9,863 9,971(h,i)
5.10% 08/01/35 6,475 6,513(h,i)
5.26% 04/01/37 2,808 2,829(i)
5.44% 04/01/37 260 262(i)
5.50% 01/01/14 - 06/01/37 20,770 21,002(h)
5.53% 04/01/37 3,555 3,605(i)
5.59% 04/01/37 6,301 6,405(i)
5.62% 03/01/37 222 225(i)
5.63% 06/01/37 4,609 4,682(i)
5.66% 05/01/37 1,824 1,852(i)
5.68% 04/01/37 2,316 2,355(i)
5.70% 04/01/37 4,417 4,488(i)
5.71% 04/01/37 3,693 3,753(i)
5.72% 04/01/37 1,149 1,170(i)
5.85% 06/01/37 5,720 5,830(i)
6.00% 02/01/14 - 08/01/35 27,883 28,367(h)
6.04% 10/01/37 4,023 4,100(i)
6.50% 01/01/14 - 01/01/37 37,385 38,532(h)
7.00% 08/01/13 - 06/01/36 11,057 11,589(h)
7.50% 12/01/09 - 03/01/34 3,531 3,735(h)
8.00% 12/01/11 - 11/01/33 2,046 2,173(h)
8.50% 04/01/30 - 05/01/31 258 277(h)
9.00% 02/01/09 - 12/01/22 1,788 1,901(h)
5.00% TBA 124,231 121,836(c)
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
14
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
5.50% TBA $150,282 $ 150,216(c)
6.00% TBA 72,813 73,928(c)
6.50% TBA 827 850(c)
Government National
Mortgage Assoc.
4.50% 08/15/33 - 09/15/34 9,078 8,735(h)
5.00% 08/15/33 2,130 2,102(h)
5.63% 08/20/23 - 09/20/24 19 20(h,i)
6.00% 04/15/27 - 09/15/36 5,272 5,405(h)
6.13% 11/20/21 - 10/20/25 20 20(h,i)
6.38% 05/20/21 - 04/20/24 29 30(h,i)
6.50% 04/15/19 - 09/15/36 9,226 9,554(h)
7.00% 03/15/12 - 10/15/36 5,525 5,763(h)
7.50% 11/15/22 - 10/15/33 1,048 1,113(h)
8.00% 11/15/29 - 06/15/30 15 16(h)
8.50% 10/15/17 711 767(h)
9.00% 11/15/16 - 12/15/21 1,842 1,986(h)
5.50% TBA 30,655 30,779(c)
687,864
AGENCY COLLATERALIZED MORTGAGE
OBLIGATIONS -- 3.4%
Collateralized Mortgage
Obligation Trust (Class B)
3.74% 11/01/18 334 303(d,f,h)
Federal Home Loan
Mortgage Corp.
1.42% 04/15/37 9,121 690(d,g,i)
1.72% 05/15/37 12,210 887(d,g,i)
1.79% 04/25/37 7,109 539(d,g,i)
2.12% 12/15/30 13,414 838(d,g,h,i)
2.75% 09/15/36 8,557 949(d,g,h,i)
4.30% 12/15/33 1,970 1,651(h,i)
4.50% 04/15/13 - 03/15/19 10,518 833(d,g,h)
5.00% 04/15/14 - 08/01/35 69,576 13,215(d,g,h)
5.50% 04/15/17 - 06/15/33 6,666 1,342(d,g,h)
5.50% 04/15/26 8,549 8,661
5.63% 06/15/33 6,500 6,659(h,i)
7.50% 01/15/16 514 533(h)
7.50% 07/15/27 77 14(d,g,h)
8.00% 04/15/20 230 240(h)
8.00% 02/01/23 - 07/01/24 214 48(d,g,h)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
8.61% 11/15/37 $ 6,005 $ 4,466 (d,f)
21.57% 09/25/43 20,973 236(d,g,h,i)
Federal Home Loan
Mortgage STRIPS
6.04% 08/01/27 51 41(d,f,h)
Federal National
Mortgage Assoc.
1.59% 05/25/37 - 06/25/37 107,755 7,142(d,g,i)
1.91% 03/25/37 7,286 686(d,g,i)
2.14% 10/25/29 5,153 312(d,g,h,i)
2.24% 12/25/30 6,565 333(d,g,h,i)
2.34% 07/25/37 16,979 1,578(d,g,i)
2.64% 05/25/18 1,913 144(d,g,h,i)
2.74% 09/25/42 13,357 1,048(d,g,h,i)
2.79% 04/25/17 - 10/25/17 10,558 751(d,g,h,i)
2.84% 08/25/16 3,018 157(d,g,h,i)
3.24% 06/25/42 4,336 328(d,g,h,i)
4.00% 02/25/28 227 224(d,h)
4.50% 05/25/18 1,943 164(d,g,h)
4.75% 11/25/14 950 38(d,g,h)
5.00% 08/25/17 - 02/25/32 2,325 222(d,g,h)
5.00% 10/25/35 1,750 1,574
5.50% 03/25/29 - 01/25/33 9,932 9,865
8.00% 07/25/14 832 839(h)
39.31% 12/25/42 3,784 111(d,g,h,i)
Federal National Mortgage
Assoc. (Class 2)
5.50% 12/01/33 - 05/25/37 1,674 399(d,g)
Federal National Mortgage
Assoc. (Class S)
2.24% 02/25/31 4,704 244(d,g,h,i)
Federal National Mortgage
Assoc. REMIC
4.50% 11/25/13 1,837 53(d,g,h)
5.00% 10/25/22 2,245 333(d,g,h)
5.91% 03/25/31 4,583 4,697(h,i)
Federal National Mortgage
Assoc. REMIC (Class B)
4.49% 12/25/22 232 201(d,f,h)
Federal National Mortgage
Assoc. REMIC (Class K)
19.31%** 05/25/22 -- 7(d,g,h)
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
15
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Federal National Mortgage
Assoc. STRIPS (Class 1)
5.31% 11/01/34 $ 5,081 $ 3,840(d,f,h)
Federal National Mortgage
Assoc. STRIPS (Class 2)
5.00% 08/01/34 25,245 6,453(g)
7.50% 11/01/23 978 275(g,h)
8.00% 08/01/23 - 07/01/24 472 111(g,h)
8.50% 03/01/17 - 07/25/22 755 173(g,h)
9.00% 05/25/22 239 65(g,h)
Government National
Mortgage Assoc.
1.04% 11/06/46 7,942 373(g,h,i)
84,885
ASSET BACKED -- 5.7%
Accredited Mortgage Loan
Trust (Class A)
5.17% 07/25/34 826 797(h,i)
AESOP Funding II LLC (Class A)
5.07% 04/20/10 3,000 2,965(b,h,i)
BA Credit Card Trust
5.03% 08/15/12 10,000 9,916(h,i)
Bear Stearns Asset Backed
Securities Inc. (Class A)
5.24% 01/25/34 323 309(h,i)
Capital One Auto Finance Trust
5.03% 04/15/12 20,000 19,332(h,i)
Capital One Auto Finance
Trust (Class A)
5.13% 03/15/11 1,751 1,751(h,i)
Capital One Master Trust (Class C)
6.70% 06/15/11 2,344 2,362(b,h)
Capital One Multi-Asset
Execution Trust (Class A)
5.06% 03/16/15 1,980 1,956(h,i)
Carmax Auto Owner Trust
4.35% 03/15/10 3,032 3,021(h)
Chase Credit Card Master
Trust (Class A)
5.14% 07/15/10 5,000 5,001(h,i)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Chase Funding Mortgage Loan
Asset-Backed Certificates
5.75% 05/25/32 $ 400 $ 260(h)
Citibank Credit Card
Issuance Trust
4.45% 04/07/10 3,078 3,073(h)
Countrywide Asset-Backed
Certificates
5.39% 02/25/35 8,542 8,396(h,i)
Countrywide Asset-Backed
Certificates (Class A)
5.14% 05/25/36 203 203(h,i)
5.24% 08/25/34 118 117(h,i)
5.43% 08/25/32 207 205(h,i)
5.53% 04/25/32 126 124(h,i)
Discover Card Master Trust I
(Class A)
5.06% 04/17/12 25,700 25,620(h,i)
First Franklin Mortgage Loan
Asset Backed Certificates
5.17% 01/25/35 33 33(h,i)
First Horizon Asset Back
Trust (Class A)
5.09% 02/25/34 746 737(h,i)
GSAA Trust
4.93% 10/25/36 1,565 1,544(h,i)
5.27% 05/25/34 632 629(h,i)
Honda Auto Receivables Owner
Trust (Class A)
4.15% 10/15/10 2,798 2,789(h)
Indymac Residential Asset
Backed Trust
6.87% 04/25/37 1,018 126(h,i)
JP Morgan Mortgage
Acquisition Corp.
5.02% 03/01/37 4,300 3,856(i)
Long Beach Mortgage
Loan Trust
5.03% 05/25/36 2,000 1,859(h,i)
Mid-State Trust
7.54% 07/01/35 877 935(h)
Option One Mortgage Loan Trust
5.00% 06/25/37 5,000 4,565(i)
- ----------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
16
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Peco Energy Transition Trust
6.52% 12/31/10 $ 2,219 $ 2,353(h)
Residential Asset Mortgage
Products, Inc.
5.11% 03/25/34 106 105(h,i)
Residential Asset Securities Corp.
5.37% 07/25/32 456 425(h,i)
Residential Asset Securities
Corp. (Class A)
4.16% 07/25/30 539 532(h,i)
5.45% 06/25/33 733 722(h,i)
5.51% 11/25/33 779 745(h,i)
SLM Student Loan Trust (Class A)
5.04% 06/15/18 890 885(h,i)
Structured Asset Investment
Loan Trust
5.10% 02/25/35 242 241(b,h,i)
Swift Master Auto Receivables
Trust (Class A)
5.13% 06/15/12 15,000 14,349(i)
Triad Auto Receivables Owner
Trust (Class A)
5.29% 02/12/14 11,000 10,738(i)
Washington Mutual Master
Note Trust
5.06% 05/15/14 10,000 9,564(b,i)
Wells Fargo Home Equity Trust
3.97% 05/25/34 867 814(h,i)
143,954
CORPORATE NOTES -- 17.2%
Abbey National PLC
7.95% 10/26/29 2,070 2,374(h)
AES Ironwood LLC
8.86% 11/30/25 5,799 6,350(h)
American Electric Power
Company, Inc. (Series D)
5.25% 06/01/15 2,155 2,074(h)
American International
Group, Inc.
5.85% 01/16/18 3,136 3,159
American Railcar Industries, Inc.
7.50% 03/01/14 1,105 1,044(h)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Amgen Inc.
5.85% 06/01/17 $2,000 $ 2,031(b,h)
Archer-Daniels-Midland Co.
6.45% 01/15/38 2,096 2,143
Arizona Public Service Co.
6.25% 08/01/16 3,165 3,221(h)
BAC CAP TRUST V
5.63% 03/08/35 3,200 2,715(h)
Banco Santander Chile
5.38% 12/09/14 3,465 3,467(b,h)
Basell AF SCA
8.38% 08/15/15 5,864 4,735(b)
Bear Stearns Companies Inc.
5.85% 07/19/10 2,050 2,048(h)
6.95% 08/10/12 7,270 7,475(h)
BellSouth Corp.
4.20% 09/15/09 2,890 2,872(h)
6.55% 06/15/34 3,035 3,127(h)
Bertin Ltd.
10.25% 10/05/16 1,365 1,425(b,h)
BJ Services Co.
5.75% 06/01/11 3,150 3,234(h)
Bristol-Myers Squibb Co.
5.88% 11/15/36 2,145 2,119(h)
British Telecommunications PLC
8.63% 12/15/10 1,260 1,379(h)
Cadbury Schweppes US
Finance LLC
3.88% 10/01/08 2,035 2,023(b,h)
Capital One Bank
6.50% 06/13/13 1,325 1,306(h)
Cargill Inc.
6.00% 11/27/17 5,335 5,323(b)
Carolina Power & Light Co.
5.15% 04/01/15 1,500 1,488(h)
5.70% 04/01/35 815 786(h)
6.13% 09/15/33 1,590 1,624(h)
Chubb Corp.
6.00% 05/11/37 2,600 2,492(h)
Citigroup Capital
8.30% 12/21/57 1,043 1,101(i)
Citigroup, Inc.
5.13% 02/14/11 4,440 4,469(h)
- ----------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
17
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Clarendon Alumina
Production Ltd.
8.50% 11/16/21 $4,635 $ 4,832 (b,h)
Consumers Energy Co.
5.15% 02/15/17 2,060 1,969(h)
COX Communications, Inc.
7.13% 10/01/12 4,325 4,625(h)
7.75% 11/01/10 2,410 2,578(h)
CSX Transportation, Inc.
9.75% 06/15/20 1,365 1,762(h)
DaimlerChrysler NA Holding Corp.
4.05% 06/04/08 2,000 1,992(h)
Diageo Capital PLC
5.20% 01/30/13 2,074 2,088
Dominion Resources, Inc.
(Series B)
6.30% 09/30/66 7,805 7,566(h,i)
Dover Corp.
6.50% 02/15/11 1,930 2,010(h)
DP WORLD Ltd.
6.85% 07/02/37 2,200 2,091(b,h)
Duke Energy Corp.
5.38% 01/01/09 1,065 1,072(h)
EI Du Pont de Nemours & Co.
4.88% 04/30/14 2,080 2,029(h)
El Paso Electric Co.
6.00% 05/15/35 1,660 1,552(h)
Empresa Energetica de Sergipe
and Sociedade Anonima
de Eletrificaao da Paraiba
10.50% 07/19/13 2,210 2,387(b,h)
FirstEnergy Corp. (Series B)
6.45% 11/15/11 2,980 3,077(h)
Galaxy Entertainment Finance
Company Ltd.
9.88% 12/15/12 1,055 1,129(h)
Globo Comunicacoes e
Participacoes S.A.
7.25% 04/26/22 1,610 1,558(b,h)
GMAC LLC
5.63% 05/15/09 6,170 5,821(h)
Goldman Sachs Group, Inc.
6.60% 01/15/12 8,340 8,871(h)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
GTE Corp.
6.94% 04/15/28 $4,600 $ 4,927(h)
7.51% 04/01/09 2,125 2,190(h)
Hexion US Finance Corp.
9.75% 11/15/14 5,500 5,940(h)
HSBC Bank USA NA
4.63% 04/01/14 3,215 3,046(h)
HSBC Capital Funding LP
4.61% 12/31/49 3,400 3,130(b,h,i)
HSBC Capital Funding LP
(Series 1)
9.55% 12/31/49 3,380 3,694(b,h,i)
HSBC Finance Corp.
6.75% 05/15/11 1,975 2,088(h)
HSBC Holdings PLC
6.50% 05/02/36 625 608(h)
Hydro Quebec
8.50% 12/01/29 1,455 2,066(h)
Idearc, Inc.
8.00% 11/15/16 5,450 5,000
IIRSA Norte Finance Ltd.
8.75% 05/30/24 3,005 3,403(b,h)
ING Capital Funding TR III
8.44% 12/29/49 3,000 3,196(h,i)
ING Groep N.V.
5.78% 12/29/49 3,330 3,098(i)
Intergen N.V.
9.00% 06/30/17 3,617 3,807(b)
International Steel Group Inc.
6.50% 04/15/14 2,700 2,772
Interoceanica IV Finance Ltd.
4.03% 11/30/18 2,760 1,786(b,d)
4.21% 11/30/25 2,760 1,310(b,d)
iStar Financial, Inc. (REIT)
7.00% 03/15/08 2,040 2,037(h)
JBS S.A.
9.38% 02/07/11 2,690 2,633
JP Morgan Chase & Co.
7.00% 11/15/09 3,965 4,128(h)
JP Morgan Chase Bank
5.88% 06/13/16 3,190 3,241
Kansas Gas & Electric
5.65% 03/29/21 1,676 1,620(h)
- ----------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
18
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Kazkommerts International BV
7.00% 11/03/09 $ 190 $ 178 (b)
Landsbanki Islands
5.73% 08/25/09 3,245 3,239(b,h,i)
Libbey Glass Inc.
11.91% 06/01/11 2,675 2,819(i)
Lippo Karawaci Finance BV
8.88% 03/09/11 2,695 2,580
Lukoil International Finance BV
6.36% 06/07/17 2,015 1,908(b)
Majestic Star Casino LLC
9.50% 10/15/10 5,880 5,557(h)
Marfrig Overseas Ltd.
9.63% 11/16/16 2,690 2,673(b)
Markel Corp.
7.35% 08/15/34 1,195 1,258(h)
McDonald's Corp.
5.80% 10/15/17 2,087 2,152
Mediacom LLC
9.50% 01/15/13 5,520 5,127(h)
Merck & Company, Inc.
5.75% 11/15/36 1,589 1,580(h)
Metropolitan Life Global
Funding I
4.25% 07/30/09 3,910 3,912(b,h)
Midamerican Energy
Holdings Co.
6.13% 04/01/36 2,165 2,160(h)
Mizuho Financial Group
Cayman Ltd.
8.38% 12/29/49 3,070 3,102
Morgan Stanley
5.95% 12/28/17 3,200 3,192
Morgan Stanley (Series F)
5.33% 01/18/08 9,000 8,998(h,i)
Munich Re America Corp.
(Series B)
7.45% 12/15/26 1,935 2,153(h)
NAK Naftogaz Ukrainy
8.13% 09/30/09 3,500 3,316
Nakilat Inc.
6.07% 12/31/33 430 392(b,h)
6.27% 12/31/33 2,725 2,478(b,h)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Nelnet, Inc.
5.13% 06/01/10 $2,800 $ 2,683(h)
Nevada Power Co. (Series N)
6.65% 04/01/36 1,480 1,498(h)
NGPL PipeCo LLC
7.12% 12/15/17 2,195 2,251(b)
Nisource Finance Corp.
7.88% 11/15/10 1,080 1,146(h)
Norfolk Southern Corp.
6.00% 04/30/08 475 477(h)
8.63% 05/15/10 3,125 3,399(h)
Norfolk Southern Railway Co.
9.75% 06/15/20 2,360 3,221(h)
Northeast Utilities (Series B)
3.30% 06/01/08 2,105 2,084(h)
Northern States Power Co.
6.25% 06/01/36 1,240 1,289(h)
NorthWestern Corp.
5.88% 11/01/14 3,875 3,819(h)
Ohio Power Co. (Series E)
6.60% 02/15/33 1,120 1,125(h)
OPTI Canada Inc.
8.25% 12/15/14 2,725 2,698(b,h)
Pacific Bell
7.13% 03/15/26 1,495 1,583(h)
Pacific Gas & Electric Co.
5.80% 03/01/37 2,045 1,958
PanAmSat Corp.
9.00% 08/15/14 4,725 4,749(h)
Pemex Finance Ltd.
9.03% 02/15/11 4,381 4,681(h)
Pemex Project Funding
Master Trust
6.13% 08/15/08 108 108
7.88% 02/01/09 1,009 1,039
Petrobras International
Finance Co.
5.88% 03/01/18 3,105 3,106
PNC Preferred Funding Trust I
6.52% 12/31/49 5,065 4,555(b,i)
Potomac Edison Co.
5.35% 11/15/14 1,520 1,475(h)
Prudential Financial, Inc.
5.26% 06/13/08 5,000 5,004(h,i)
- ----------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
19
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Public Service Company
of Colorado
7.88% 10/01/12 $ 3,330 $ 3,716(h)
Puget Sound Energy, Inc.
3.36% 06/01/08 2,120 2,103(h)
5.48% 06/01/35 2,135 1,843(h)
Puget Sound Energy, Inc.
(Series A)
6.97% 06/01/67 3,750 3,361(i)
Rede Empresas de Energia
Eletrica S.A.
11.13% 04/02/49 2,695 2,641(b)
Rock-Tenn Co.
8.20% 08/15/11 5,390 5,579
Royal Bank of Scotland
Group PLC
5.00% 10/01/14 2,450 2,351(h)
RSHB Capital S.A.
6.30% 05/15/17 1,735 1,644(b)
Sabine Pass LNG LP
7.25% 11/30/13 3,225 3,080
7.50% 11/30/16 4,810 4,593
Security Benefit Life Insurance
8.75% 05/15/16 2,190 2,521(b)
Sierra Pacific Resources
8.63% 03/15/14 8,065 8,618
Simon Property Group, L.P. (REIT)
4.60% 06/15/10 2,165 2,152(h)
Skandinaviska Enskilda
Banken AB
7.50% 03/29/49 2,510 2,584(b,h,i)
Southern Copper Corp.
7.50% 07/27/35 525 556
Sovereign Capital Trust VI
7.91% 06/13/36 6,075 5,872(h)
Sprint Capital Corp.
7.63% 01/30/11 12,750 13,253
Stallion Oilfield Finance Corp.
9.75% 02/01/15 4,360 4,011(b)
Standard Chartered Bank
Hong Kong Ltd.
4.38% 12/03/14 3,730 3,694(i)
Stewart Enterprises, Inc.
6.25% 02/15/13 2,715 2,552(h)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Telecom Italia Capital S.A.
6.20% 07/18/11 $4,145 $ 4,265
Telefonica Emisiones SAU
5.86% 02/04/13 3,075 3,164
Titan Petrochemicals Group Ltd.
8.50% 03/18/12 1,565 1,385(b)
TNK-BP Finance S.A.
6.63% 03/20/17 1,355 1,236(b)
Tronox Worldwide LLC
9.50% 12/01/12 3,815 3,682(h)
UBS Preferred Funding Trust I
8.62% 10/29/49 2,465 2,634(i)
Valspar Corp.
5.63% 05/01/12 2,080 2,103
Verizon Global Funding Corp.
7.25% 12/01/10 4,440 4,754
Verizon Pennsylvania, Inc.
8.35% 12/15/30 1,350 1,616(h)
8.75% 08/15/31 2,125 2,649(h)
VTB Capital S.A.
5.49% 08/01/08 2,185 2,163(b,h,i)
Weatherford International, Inc.
5.95% 06/15/12 3,055 3,152(b)
Wells Fargo & Co.
5.63% 12/11/17 1,045 1,052
Wells Fargo Bank NA
5.95% 08/26/36 1,320 1,282(h)
Westar Energy, Inc.
7.13% 08/01/09 2,215 2,275(h)
Westlake Chemical Corp.
6.63% 01/15/16 5,230 4,942(h)
Wisconsin Electric Power
5.70% 12/01/36 315 302(h)
434,435
NON-AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS -- 11.0%
Banc of America Commercial
Mortgage Inc.
4.13% 07/10/42 4,300 4,236(h)
5.32% 10/10/11 3,131 3,138(h)
5.45% 01/15/49 3,000 3,015(h)
- ----------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
20
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Banc of America Commercial
Mortgage Inc. (Class A)
5.79% 05/11/35 $ 4,682 $ 4,784(h)
Banc of America Commercial
Mortgage Inc. (Class C)
5.70% 04/10/17 2,000 1,811(h)
Banc of America Funding Corp.
5.74% 03/20/36 1,749 1,808(h,i)
5.82% 02/20/36 2,983 2,945(h,i)
Banc of America Mortgage
Securities (Class B)
5.38% 01/25/36 1,837 1,821(h,i)
5.55% 02/25/36 1,389 1,426(h,i)
Bank of America Alternative
Loan Trust
6.50% 07/25/35 2,162 2,149(h)
Bear Stearns Asset Backed
Securities Trust (Class A)
5.04% 07/25/36 11,122 10,954(d,h,i)
Bear Stearns Commercial
Mortgage Securities
5.41% 03/11/39 1,472 1,487(d,h,i)
5.48% 10/12/41 4,563 4,597(d,h,i)
5.53% 10/12/41 4,563 4,565(d,h,i)
6.02% 02/14/31 3,541 3,566(d,h)
Bear Stearns Commercial
Mortgage Securities (Class A)
5.66% 06/11/40 10,900 11,072(h,i)
Bear Stearns Commercial
Mortgage Securities (Class D)
5.99% 09/11/42 700 576(b,i)
Countrywide Alternative
Loan Trust
5.98% 05/25/36 653 436(h,i)
6.00% 03/25/36 - 08/25/36 3,181 736(h)
Countrywide Alternative Loan
Trust (Class B)
6.00% 05/25/36 - 08/25/36 1,979 1,057(h)
Credit Suisse Mortgage Capital
Certificates
5.47% 09/15/39 3,967 3,998(h)
Credit Suisse Mortgage Capital
Certificates (Class C)
5.65% 02/25/36 984 834(h,i)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
CS First Boston Mortgage
Securities Corp.
1.39% 03/15/35 $62,674 $ 1,698(b,d,h,i)
5.25% 08/25/34 1,301 1,285(d,h)
5.33% 10/25/35 1,653 1,329(d,h,i)
5.37% 07/15/37 51,165 1,106(b,d,h,i)
CS First Boston Mortgage
Securities Corp. (Class A)
5.44% 09/15/34 2,977 3,011(h)
6.53% 06/15/34 2,800 2,917(h)
DLJ Commercial Mortgage Corp.
6.24% 11/12/31 6,898 6,932(h)
DLJ Commercial Mortgage
Corp. (Class A)
7.18% 11/10/33 3,954 4,137(h)
First Horizon Alternative
Mortgage Securities (Class B)
5.98% 05/25/36 427 155(h,i)
First Union-Lehman Brothers-
Bank of America
6.56% 11/18/35 2,166 2,165(h)
GMAC Commercial Mortgage
Securities, Inc.
6.42% 05/15/35 4,299 4,310(h)
6.47% 04/15/34 1,996 2,070(h)
GMAC Commercial Mortgage
Securities, Inc. (Class X)
5.29% 12/10/41 74,739 1,356(d,h,i)
Greenwich Capital Commercial
Funding Corp.
5.12% 04/10/37 4,200 4,207(h)
Impac CMB Trust
5.13% 04/25/35 2,343 2,279(h,i)
Impac CMB Trust (Class 1)
5.23% 10/25/34 2,487 2,488(h,i)
Impac Secured Assets CMN
Owner Trust (Class A)
5.12% 11/25/36 11,412 10,430(h,i)
Indymac INDA Mortgage
Loan Trust
5.14% 01/25/36 474 426(h,i)
Indymac INDA Mortgage Loan
Trust (Class B)
5.14% 01/25/36 954 900(h,i)
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
21
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
JP Morgan Chase Commercial
Mortgage Securities Corp.
1.11% 01/12/39 $ 41,938 $ 1,104(b,h,i)
6.20% 02/12/51 1,080 927(b,h,i)
6.47% 11/15/35 5,391 5,631(h)
LB-UBS Commercial
Mortgage Trust
4.06% 09/15/27 6,696 6,611(d,h,i)
5.20% 01/18/12 72,084 1,525(d,h,i)
5.26% 09/15/39 5,130 5,149(d,h)
6.23% 03/15/26 3,000 3,030(d,h)
6.97% 01/15/36 22,580 1,308(b,d,h)
7.70% 10/15/35 21,658 868(b,d,h,i)
8.02% 02/15/40 28,488 890(d,i)
8.47% 03/15/36 86,391 2,259(b,d,h,i)
8.57% 02/15/40 52,203 1,049(b,d,h,i)
8.88% 09/15/39 24,928 444(b,d,h,i)
LB-UBS Commercial Mortgage
Trust (Class A)
6.13% 12/15/30 1,777 1,841(h)
LB-UBS Commercial Mortgage
Trust (Class B)
6.65% 07/14/16 750 797(b,h)
LB-UBS Commercial Mortgage
Trust (Class F)
6.24% 07/15/40 1,915 1,646(i)
LB-UBS Commercial Mortgage
Trust (Class X)
5.56% 09/15/39 141,751 4,099(d,h,i)
8.36% 12/15/39 52,582 866(b,d,h,i)
10.77% 03/15/32 55,106 550(d,h,i)
Lehman Brothers Floating Rate
Commercial Mortgage Trust
5.29% 10/15/17 7,000 6,990(b,h,i)
5.34% 10/15/17 4,000 3,994(b,h,i)
Master Alternative Loans Trust
5.00% 08/25/18 2,022 310(g,h)
6.50% 08/25/34 - 05/25/35 8,017 7,929(h)
Master Alternative Loans
Trust (Class 3)
6.50% 01/25/35 2,219 2,214(h)
Merrill Lynch Mortgage
Trust (Class A)
5.61% 05/12/39 5,006 5,086(h,i)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
MLCC Mortgage Investors, Inc.
5.37% 02/25/36 $ 1,505 $ 1,443(h,i)
Morgan Stanley Capital I
5.28% 12/15/43 2,021 2,032(h,i)
5.33% 12/15/43 2,021 2,018(h,i)
5.39% 11/12/41 4,629 4,348(h,i)
5.44% 02/12/44 2,017 2,012(b,i)
5.69% 04/15/49 12,500 12,741(i)
5.71% 07/12/44 3,000 3,048(h)
7.11% 04/15/33 916 937(h)
Morgan Stanley Capital I (Class A)
5.36% 02/12/44 3,039 3,050(i)
Morgan Stanley Dean Witter
Capital I (Class A)
5.72% 12/18/32 55 56(h)
6.54% 02/15/31 401 415(h)
Mortgage Capital Funding Inc.
(Class C)
6.73% 06/18/30 2,046 2,049(h)
MortgageIT Trust (Class A)
5.17% 08/25/35 4,726 4,661(h,i)
Nomura Asset Securities Corp.
(Class A)
6.59% 03/15/30 3,866 3,875(h)
Opteum Mortgage
Acceptance Corp.
5.17% 02/25/35 1,792 1,633(h,i)
PNC Mortgage Acceptance
Corp. (Class A)
6.36% 03/12/34 5,200 5,392
Puma Finance Ltd. (Class A)
5.02% 03/25/34 1,100 1,064(h,i)
Residential Accredit Loans, Inc.
6.00% 01/25/36 - 04/25/36 3,719 2,391(h)
6.04% 01/25/36 1,025 1,068(h,i)
Residential Funding Mortgage
Security I
5.75% 01/25/36 1,739 1,456(h)
Sequoia Mortgage Trust
5.21% 06/20/34 277 276(h,i)
Structured Asset Securities
Corp. (Class X)
15.58% 02/25/28 6,760 169(d,i)
- ---------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
22
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust
5.42% 04/15/47 $15,000 $ 15,001
Wachovia Bank Commercial
Mortgage Trust (Class E)
5.90% 02/15/51 6,030 5,217(i)
Washington Mutual Inc.
5.20% 01/25/45 1,267 1,199(h,i)
Wells Fargo Mortgage Backed
Securities Trust
5.39% 08/25/35 4,154 4,038(h,i)
5.50% 01/25/36 - 03/25/36 3,133 2,507(h)
Wells Fargo Mortgage Backed
Securities Trust (Class B)
5.50% 03/25/36 2,930 2,458(h)
277,883
SOVEREIGN BONDS -- 0.4%
Government of Bahamas
6.63% 05/15/33 2,400 2,744(b,h)
Government of Canada
7.50% 09/15/29 3,115 4,034
Government of Manitoba Canada
4.90% 12/06/16 2,120 2,174(h)
Government of Panama
6.70% 01/26/36 1,965 2,073
11,025
TOTAL BONDS AND NOTES
(COST $2,470,614) 2,460,693
- --------------------------------------------------------------------------------
SECURITIES PURCHASED WITH COLLATERAL FROM
SECURITIES ON LOAN -- 12.4%
- --------------------------------------------------------------------------------
ASSET BACKED -- 9.2%
AESOP Funding II LLC (Class A)
5.07% 04/20/10 5,000 4,942(b,h,i)
American Express Credit Account
Master Trust (Class A)
5.14% 10/15/10 4,000 4,001(i)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
AmeriCredit Automobile
Receivables Trust
5.33% 04/07/14 $ 8,250 $ 7,996(i)
Arran Master Trust (Class A)
5.05% 12/15/10 3,000 2,980(i)
Bayview Financial Acquisition
Trust (Class A)
5.31% 02/28/44 4,180 4,124(i)
Chase Issuance Trust
5.04% 12/15/10 10,000 10,000(i)
Chase Issuance Trust (Class A)
5.05% 11/15/11 14,000 13,949(i)
Citibank Credit Card
Issuance Trust
5.03% 11/22/10 10,000 9,994(i)
5.04% 12/15/10 4,500 4,493(i)
CNH Equipment Trust (Class A)
5.19% 12/15/10 392 392(b,i)
CNH Wholesale Master Note
Trust (Class A)
5.14% 06/15/11 2,000 1,996(i)
Countrywide Asset-Backed
Certificates
4.98% 06/25/35 2,813 2,767(i)
5.13% 07/25/34 2,476 2,432(i)
5.30% 05/25/33 36 36(i)
Countrywide Asset-Backed
Certificates (Class 2)
5.47% 06/25/33 20 20(i)
Countrywide Asset-Backed
Certificates (Class A)
5.67% 03/25/33 696 688(i)
Countrywide Home Equity
Loan Trust
5.27% 01/15/30 5,067 4,950(i)
Discover Card Master Trust I
5.04% 04/15/10 5,000 4,970(i)
Discover Card Master Trust I
(Class A)
5.05% 05/15/11 6,500 6,469(i)
First Franklin Mortgage Loan
Asset Backed Certificates
5.13% 11/25/36 3,000 2,733(i)
- ------------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
23
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Asset Backed Certificates
(Class M)
5.32% 03/25/35 $10,000 $ 8,994 (i)
First Horizon Asset Back Trust
(Class A)
5.09% 02/25/34 895 884(h,i)
5.20% 01/20/33 1,506 1,428(i)
GMAC Mortgage Corp.
Loan Trust
4.96% 08/25/35 4,700 4,689(i)
Gracechurch Card Funding PLC
5.04% 06/15/10 5,000 4,995(i)
Gracechurch Card Funding PLC
(Class A)
5.04% 11/15/10 2,500 2,495(i)
5.14% 03/15/10 3,500 3,500(i)
GSAA Trust
4.93% 10/25/36 1,565 1,544(h,i)
5.12% 01/25/36 10,000 8,787(i)
GSAMP Trust
5.02% 12/25/35 12,500 12,403(i)
Hertz Vehicle Financing LLC
5.01% 02/25/10 5,000 4,979(b,i)
Indymac Residential Asset
Backed Trust
4.92% 11/25/36 2,003 1,971(i)
4.98% 11/25/36 10,449 10,080(i)
5.04% 10/25/35 13,598 13,525(i)
Irwin Home Equity
5.02% 02/25/36 572 499(b,i)
JP Morgan Mortgage
Acquisition Corp.
4.98% 01/25/36 1,856 1,844(i)
Long Beach Mortgage
Loan Trust
4.97% 05/25/36 3,800 3,735(i)
5.15% 09/25/35 2,874 2,847(i)
Nissan Auto Lease Trust
5.10% 02/15/13 26,680 26,284(i)
Option One Mortgage Loan
Trust (Class A)
5.71% 02/25/33 416 391(i)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Residential Asset Mortgage
Products, Inc. (Class A)
5.43% 06/25/32 $ 101 $ 100(i)
Residential Asset Securities Corp.
4.97% 06/25/36 3,000 2,944(i)
5.12% 01/25/36 9,710 9,038(i)
Residential Asset Securities
Corp. (Class A)
5.45% 06/25/33 113 111(h,i)
Residential Funding Mortgage
Securities II Inc. (Class A)
5.08% 02/25/34 163 156(i)
Saxon Asset Securities Trust
4.98% 03/25/36 10,671 10,545(i)
Structured Asset Securities Corp.
5.07% 02/25/35 99 99(i)
Wachovia Asset Securitization
Inc. (Class A)
5.09% 06/25/34 1,027 1,014(i)
Waverly Community School
4.97% 05/25/36 3,618 3,458(i)
233,271
CORPORATE NOTES -- 0.7%
Countrywide Financial Corp.
5.20% 09/02/08 12,000 10,273(i)
Morgan Stanley
4.93% 05/07/09 6,260 6,182(i)
16,455
NON-AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS -- 2.5%
Banc of America Large Loan
5.24% 03/15/22 10,000 9,740(b,i)
Crusade Global Trust (Class A)
5.16% 09/18/34 1,227 1,225(i)
Granite Master Issuer PLC
5.03% 12/20/54 2,280 2,278(i)
Granite Mortgages PLC (Class 1)
5.36% 01/20/43 496 495(i)
Impac CMB Trust (Class 1)
5.23% 10/25/34 3,008 3,009(h,i)
- ------------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
24
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
Impac Secured Assets CMN
Owner Trust
5.26% 03/25/36 $ 3,879 $ 3,518(i)
Interstar Millennium Trust
(Class A)
5.26% 03/14/36 836 837(i)
JP Morgan Alternative
Loan Trust
4.93% 8/25/36 - 10/25/36 7,136 7,107(i)
Medallion Trust (Class A)
5.04% 08/22/36 2,264 2,238(i)
Morgan Stanley Capital I
5.57% 01/15/21 9,000 8,730(b,i)
National RMBS Trust
5.04% 03/20/34 1,202 1,185(i)
Nomura Asset Acceptance Corp.
5.00% 03/25/37 13,644 13,610(i)
Residential Accredit Loans, Inc.
5.05% 07/25/36 3,360 2,832(i)
Thornburg Mortgage Securities
Trust (Class A)
5.08% 12/25/35 3,254 3,244(i)
5.21% 04/25/43 749 749(i)
Washington Mutual Inc.
5.21% 01/25/45 981 931(i)
5.23% 07/25/44 1,619 1,575(i)
63,303
TOTAL SECURITIES PURCHASED WITH COLLATERAL
FROM SECURITIES ON LOAN
(COST $322,148) 313,029
TOTAL INVESTMENTS IN SECURITIES
(COST $2,792,763) 2,773,721
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 33.2%*
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 8.4%
GEI Short Term Investment Fund
4.96% 212,435,714 212,436 (d,k)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
FEDERAL AGENCIES -- 3.2%
Federal Home Loan Bank
Discount Notes
4.05% 01/03/08 $81,000 $ 80,982(d)
TIME DEPOSITS -- 1.8%
State Street Corp.
3.75% 01/02/08 45,000 45,000(e)
COMMERCIAL PAPER -- 3.1%
Rabobank USA Finance Corp.
4.44% 01/03/08 80,000 79,980
NUMBER
OF SHARES
- --------------------------------------------------------------------------------
SHORT-TERM SECURITIES PURCHASED WITH
COLLATERAL FROM SECURITIES ON LOAN -- 16.7%
GEI Short Term
Investment Fund
4.96% 422,094,490 422,094(d,k)
TOTAL SHORT-TERM INVESTMENTS
(COST $840,492) 840,492
TOTAL INVESTMENTS
(COST $3,633,255) 3,614,213
LIABILITIES IN EXCESS OF OTHER
ASSETS, NET-- (43.0)% (1,087,146)
----------
NET ASSETS-- 100.0% $2,527,067
==========
- ------------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
25
<page>
GE S&S INCOME FUND
Schedule of Investments
- --------------------------------------------------------------------------------
(dollars in thousands)-- December 31, 2007
OTHER INFORMATION
- --------------------------------------------------------------------------------
The S&S Income Fund had the following long futures contracts open at December
31, 2007:
NUMBER CURRENT
EXPIRATION OF NOTIONAL UNREALIZED
DESCRIPTION DATE CONTRACTS VALUE APPRECIATION
- --------------------------------------------------------------------------------
U.S. Treasury
Notes 2 Yr.
Futures March 2008 771 $162,103 $ 189
U.S. Treasury
Notes 10 Yr.
Futures March 2008 958 $108,628 310
----
$499
====
* The financial statement figure presented above for Short-Term Investments
includes collateral received from transactions such as loans of portfolio
securities and amounts held pending settlement of securities transactions. In
evaluating the Fund's net cash level, portfolio management takes into account
certain of the Fund's liabilities in excess of other assets, such as
liabilities associated with loans of portfolio securities and securities
pending settlement, and equitized cash. The Fund's net cash level is not
expected to exceed 5%.
- ------------
See Notes to Schedules of Investments on page 27 and Notes to Financial
Statements.
26
<page>
Notes to Schedules of Investments
(dollars in thousands)-- December 31, 2007
- --------------------------------------------------------------------------------
(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, 2007, these securities amounted to
$165,779 and $1,176 or 6.56% and 0.03% of net assets for the GE S&S Income
Fund and GE S&S Program Mutual respectively. 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, 2007, 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 at
December 31, 2007.
(j) All or a portion of the security is out on loan.
(k) GEAM, the investment adviser of the Fund, also serves as investment adviser
of the GEI Short-Term Investment Fund.
+ Percentages are based on net assets as of December 31, 2007.
** Par 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
27
<page>
Financial Highlights
- --------------------------------------------------------------------------------
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE YEARS INDICATED
GE S&S PROGRAM MUTUAL FUND 2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 1/1/80
Net asset value, beginning of year ......... $ 46.31 $ 42.85 $ 45.36 $ 42.94 $ 35.13
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................... 0.74 0.91 0.74 0.79 0.52
Net realized and unrealized
gains on investments ................. 3.24 6.31 0.63 2.86 7.82
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
INVESTMENT OPERATIONS ................... 3.98 7.22 1.37 3.65 8.34
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income ................... 0.74 0.90 0.76 0.79 0.53
Net realized gains ...................... 4.82 2.86 3.12 0.44 --
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS ........................ 5.56 3.76 3.88 1.23 0.53
NET ASSET VALUE, END OF YEAR ............... $ 44.73 $ 46.31 $ 42.85 $ 45.36 $ 42.94
===========================================================================================================================
TOTAL RETURN(A) ............................ 8.53% 16.82% 2.95% 8.50% 23.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) ....................... $4,678,236 $4,541,021 $4,074,331 $4,154,143 $3,939,274
Ratios to average net assets:
Net investment income ................ 1.48% 1.95% 1.60% 1.80% 1.38%
Net expenses ......................... 0.10% 0.11% 0.09% 0.13% 0.18%
Gross expenses ....................... 0.10% 0.11% 0.09% 0.13% 0.18%
Portfolio turnover rate ................. 55% 40% 42% 28% 25%
(a) TOTAL RETURNS ARE HISTORICAL AND ASSUME CHANGES IN SHARE PRICE, REINVESTMENT
OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
- ----------
See Notes to Financial Statements.
28
<page>
Financial Highlights
- --------------------------------------------------------------------------------
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE YEARS INDICATED
GE S&S INCOME FUND 2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 1/3/80
Net asset value, beginning of year .......... $ 11.15 $ 11.24 $ 11.52 $ 11.70 $ 11.80
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income .................... 0.62 0.60 0.55 0.47 0.47
Net realized and unrealized
gains (losses) on investments ......... 0.03 (0.09) (0.26) 0.01 0.02
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
INVESTMENT OPERATIONS .................... 0.65 0.51 0.29 0.48 0.49
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income .................... 0.62 0.60 0.54 0.47 0.49
Net realized gains ....................... -- -- 0.03 0.19 0.10
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS ......................... 0.62 0.60 0.57 0.66 0.59
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR ................ $ 11.18 $ 11.15 $ 11.24 $ 11.52 $ 11.70
===========================================================================================================================
TOTAL RETURN(A) ............................. 6.03% 4.74% 2.63% 4.12% 4.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) ........................ $2,527,067 $2,507,655 $2,557,311 $2,601,599 $2,614,617
Ratios to average net assets:
Net investment income ................. 5.61% 5.47% 4.80% 4.02% 3.96%
Net expenses .......................... 0.15% 0.15% 0.13% 0.14% 0.15%
Gross expenses ........................ 0.15% 0.15% 0.13% 0.14% 0.15%
Portfolio turnover rate .................. 426% 322% 323% 342% 335%
(a) TOTAL RETURNS ARE HISTORICAL AND ASSUME CHANGES IN SHARE PRICE, REINVESTMENT
OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
- -----------
See Notes to Financial Statements.
29
<page>
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2007 (AMOUNTS IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------------------------------
GE S&S
PROGRAM GE S&S
MUTUAL FUND INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities, at market* (cost $4,103,161
and 2,792,763, respectively) ................................... $4,615,428 $2,773,721
Short-term Investments (at amortized cost) ......................... 62,393 205,962
Short-term affiliated investments (at amortized cost) .............. -- 634,530
Foreign currency (cost $18 and $4,809, respectively) ............... 18 5,058
Income receivables ................................................. 4,439 26,727
Receivable for fund shares sold .................................... -- --
Variation margin receivable ........................................ -- 392
Other assets ....................................................... 14 --
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS .................................................... 4,682,292 3,646,390
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distribution Payable to Shareholders ............................... 1 495
Payable upon return of securities loaned ........................... -- 716,121
Payable for investments purchased .................................. -- 400,275
Payable for fund shares redeemed ................................... 2,632 910
Payable to GEAM .................................................... 1,233 1,301
Accrued other expenses ............................................. 190 221
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ............................................... 4,056 1,119,323
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................ $4,678,236 $2,527,067
===========================================================================================================================
NET ASSETS CONSIST OF:
Capital paid in .................................................... 4,204,433 2,595,643
Undistributed (distribution in excess of)
net investment income .......................................... 25 3,275
Accumulated net realized gain (loss) ............................... (38,489) (53,557)
Net unrealized appreciation/(depreciation) on:
Investments ........................................................ 512,267 (19,042)
Futures ............................................................ -- 499
Foreign currency related transactions .............................. -- 249
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................ $4,678,236 $2,527,067
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding ($25.00 and $10.00 par value respectively;
unlimited shares authorized) ....................................... 104,579 225,970
Net asset value per share ............................................. $44.73 $11.18
* Includes $701,696 of securities on loan in the GE S&S Income Fund.
- ------------
See Notes to Financial Statements.
30
<page>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007 (AMOUNTS IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------------------------------
GE S&S
PROGRAM GE S&S
MUTUAL FUND INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME:
Dividend .......................................................... $ 70,839 $ --
Interest* ......................................................... 3,509 125,404
Interest from affiliated investments** ............................ -- 16,531
Less: Foreign taxes withheld ...................................... (210) --
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME ......................................................... 74,138 141,935
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory and administration fees (Note 4) ......................... 3,042 2,172
Transfer agent fees ............................................... 707 676
Shareholder servicing agent expenses .............................. 284 272
Custody and accounting expenses ................................... 286 310
Professional fees ................................................. 94 57
Registration, printing, filing and miscellaneous expenses ......... 247 208
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES .................................................... 4,660 3,695
- ---------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME ................................................ 69,478 138,240
===========================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON:
Investments ....................................................... 450,583 (10,974)
Futures ........................................................... -- (1,534)
Options ........................................................... -- (58)
Foreign currency related transactions ............................. (5) 675
INCREASE (DECREASE) IN UNREALIZED APPRECIATION/(DEPRECIATION) ON:
Investments ....................................................... (136,422) 21,231
Futures ........................................................... -- 499
Foreign currency related transactions ............................. -- 249
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments ...................... 314,156 10,088
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $383,634 $148,328
===========================================================================================================================
* Income attributable to securities lending activity, net of rebate, for GE S&S
Program Mutual Fund and GE S&S Income fund was $113 and $5,767 respectively.
** Income attributable to securities lending activity, net of rebate, for GE S&S
Income Fund was $3,752.
- ------------
See Notes to Financial Statements.
31
<page>
STATEMENTS OF CHANGES
IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 2007 AND 2006 (AMOUNTS IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------------------------------
GE S&S
PROGRAM GE S&S
MUTUAL FUND INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------
2007 2006 2007 2006
- ---------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investments income ......................... $ 69,478 $ 82,342 $ 138,240 $ 135,517
Net realized gain (loss) on investments,
futures, written options and foreign currency
related transactions ........................ 450,578 266,964 (11,891) (17,802)
Net increase (decrease) in unrealized appreciation/
(depreciation) on investments, futures,
written options, foreign currency related
translations ................................ (136,422) 312,425 21,979 (4,909)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from operations ........ 383,634 661,731 148,328 112,806
- ---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .......................... (68,808) (81,953) (139,914) (135,156)
Net realized gains ............................. (451,317) (260,255) -- --
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS ............................... (520,125) (342,208) (139,914) (135,156)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations
and distributions .............................. (136,491) 319,523 8,414 (22,350)
- ---------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares ................... 186,422 194,273 90,100 98,864
Value of distributions reinvested .............. 483,246 317,064 132,878 127,497
Cost of shares redeemed ........................ (395,962) (364,170) (211,980) (253,667)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from share transactions ... 273,706 147,167 10,998 (27,306)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ........... 137,215 466,690 19,412 (49,656)
NET ASSETS
Beginning of year ................................. 4,541,021 4,074,331 2,507,655 2,557,311
- ---------------------------------------------------------------------------------------------------------------------------
END OF YEAR ...................................... $4,678,236 $4,541,021 $2,527,067 $2,507,655
===========================================================================================================================
UNDISTRIBUTED (DISTRIBUTION IN EXCESS OF)
NET INVESTMENT INCOME, END OF YEAR ................ $ 25 $ 389 $ 3,275 $ 4,274
- --------------------------------------------------------------------------------------------------------------------------
CHANGES IN FUND SHARES
- --------------------------------------------------------------------------------------------------------------------------
Shares sold by subscription .......................... 3,859 4,228 8,108 8,911
Issued for distributions reinvested .................. 10,753 6,814 11,961 11,497
Shares redeemed ...................................... (8,099) (8,051) (19,092) (22,874)
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN FUND SHARES ............... 6,513 2,991 977 (2,466)
===========================================================================================================================
- -------------
See Notes to Financial Statements.
32
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. ORGANIZATION OF THE FUNDS
The GE S&S Program Mutual Fund and GE S&S Income Fund 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 that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results may differ from
those estimates.
The following summarizes the significant accounting policies of the Funds:
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.
Short-term investments with remaining maturities of sixty days or less at the
time of purchase are valued on the basis of amortized costs.
All assets and liabilities of the Funds initially expressed in foreign currency
values will be converted into U.S. dollars at the WM 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. Those procedures
require that the fair value of a security be established by the fair valuation
committee. The fair valuation committee follows different protocols for
different types of investments and circumstances. The fair value procedures may
be used to value any investment by any Fund in the appropriate circumstances.
Examples of the types of securities that may be fair valued include: thinly
traded or illiquid investments, high-yield securities or foreign securities.
Foreign securities may be valued with the assistance of an independent fair
value pricing service in circumstances where it is believed that
33
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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.
In September 2006, FASB issued Statement of Financial Accounting Standards No.
157, FAIR VALUE MEASUREMENTS ("FAS 157"). FAS 157 establishes a single
authoritative definition of fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. FAS 157
applies to fair value measurements already required or permitted by existing
standards. The change to current generally accepted accounting principles from
the application of FAS 157 relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. Management of the GE S&S Program Mutual Fund and the GE S&S Income
Fund does not believe the adoption of FAS 157 will materially impact the
financial statement amounts, however, additional disclosures may be required
about the inputs used to develop the measurements and the effect of certain of
the measurements on changes in net assets for the period. FAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and interim periods within those fiscal years.
REPURCHASE AGREEMENTS
Each of the Funds may engage in repurchase agreement transaction 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%
34
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 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.
SECURITY LENDING PROGRAM GEAM administers the security lending program for the
GE S&S Income. The security lending fee is based on the number and duration of
lending transactions. The participation by the GE S&S Program Mutual Fund in the
securities lending program administered by the State Street Bank and Trust
Company was effectively terminated on September 21, 2007.
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 on a daily
basis (on days the New York Stock Exchange is open). 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 from the fluctuations arising from
changes in market prices of 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 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
35
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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.
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 counterparties 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
36
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 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.
At December 31, 2007, information on the tax components of capital is as
follows:
NET TAX
COST OF GROSS TAX GROSS TAX APPRECIATION/
INVESTMENTS UNREALIZED UNREALIZED (DEPRECIATION)
FOR TAX PURPOSES APPRECIATION DEPRECIATION ON INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------------
GE S&S Program Mutual Fund $4,204,187 $754,295 $(280,661) $473,634
GE S&S Income Fund 3,634,415 32,290 (52,492) (20,202)
37
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 $ -- $ 26 $ 143 $ --
GE S&S Income Fund 249 3,286 (34,302) (17,607)
As of December 31, 2007, 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 Income Fund $ 8,770 12/31/13
25,532 12/31/14
During the year ended December 31, 2007 S&S Income Fund utilized capital loss
carryovers in the amount of $6,665.
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 elected to defer losses incurred after October 31, 2007 as follows:
FUND CAPITAL CURRENCY
- --------------------------------------------------------------------------------
GE S&S Income Fund $17,599 $8
The tax composition of distributions paid during the years ended December 31,
2007 and December 31, 2006, were as follows:
ORDINARY LONG-TERM
FUND INCOME CAPITAL GAINS TOTALS
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund
2007 $ 92,384 $427,741 $520,125
2006 112,672 229,536 342,208
GE S&S Income Fund
2007 139,914 -- 139,914
2006 135,156 -- 135,156
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,
38
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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, 2007 were as follows:
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED
INCOME LOSS
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $(1,034) $1,034
GE S&S Income
Fund 675 (675)
On June 29, 2007, the Fund adopted FIN48, "Accounting for Uncertainty in Income
Taxes." FIN48 provides guidance for how certain uncertain tax positions should
be recognized, measured, presented and disclosed in the financial statements.
FIN48 requires evaluation of tax positions taken or expected to be taken in the
course of preparing the Fund's tax returns to determine whether the tax
positions are "more likely than not" of being sustained by the applicable tax
authority. The adoption of FIN48 did not have an impact on the Fund's net assets
and financial statements. The Funds' 2004, 2005, 2006 and 2007 calendar years
tax returns are still open to examination by the Federal and applicable state
tax authorities.
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 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.
3. LINE OF CREDIT
The Funds share a revolving credit facility of up to $25 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 0.09% 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, which was
established on November 7, 2007. 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 (i) its prospectus limitation or (ii)
20% of its net assets. The credit facilities were not utilized by the Trust
during the period ended December 31, 2007.
4. AMOUNTS PAID TO AFFILIATES
ADVISORY AND ADMINISTRATION EXPENSES
During 2007, 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
39
<page>
December 31, 2007
Notes to Financial Statements
- --------------------------------------------------------------------------------
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, 2007, $67,762 (dollars not in
thousands) was charged to the GE S&S Program Mutual Fund and $34,633 (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, 2007, were as
follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $ 2,561,449 $ 2,739,970
GE S&S Income Fund 12,502,326 12,485,934
OPTIONS
During the year ended December 31, 2007,
the S&S Income Fund had no written option activity/transactions.
SECURITY LENDING
At December 31, 2007, the following Funds participated in securities lending:
LOANED SECURITIES
AT MARKET VALUE
(INCLUDING CASH
ACCRUED INTEREST) COLLATERAL
- --------------------------------------------------------------------------------
GE S&S Income Fund $701,696 $716,121
40
<page>
Report of Independent Registered
Public Accounting Firm
KPMG
THE SHAREHOLDERS AND BOARD OF TRUSTEES
GE S&S FUNDS
We have audited the accompanying statements of assets and liabilities 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"), including the schedules of investments, as of
December 31, 2007, and the related statements of operations for the year then
ended, the 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 Funds' 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, 2007 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, 2007, the
results of their operations, changes in their net assets and financial
highlights for the years described above, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Boston, Massachusetts
February 25, 2008
41
<page>
Tax Information, unaudited
For the year ended December 31, 2007
- --------------------------------------------------------------------------------
SUMMARY
For the fiscal year ended December 31, 2007 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 71.96%
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 68.64%
During the year ended December 31, 2007, the following funds paid to
shareholders of record on December 26, 2007, the following long-term capital
gain dividends reported on Form 1099 for 2007:
FUND NAME PER SHARE AMOUNT
----------------------------------------------------------------------------
General Electric S&S Program Mutual Fund $4.57064
42
<page>
Advisory Agreement Renewal, unaudited
- --------------------------------------------------------------------------------
The Board of Trustees of each Fund considered and unanimously approved the
continuance of the investment advisory agreements with GE Asset Management
Incorporated ("GEAM") at a meeting held on December 19, 2007.
In considering whether to approve the Funds' investment advisory agreements, the
Board members considered and discussed a substantial amount of information and
analysis provided, at the Board's request, 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 an independent third party provider,
Lipper Inc. ("Lipper"). 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 members also reviewed
materials discussing the legal standards for the consideration of the proposed
continuances.
In connection with their approval of the Funds' investment advisory agreements,
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 reviewed and discussed the proposed continuance of the
agreements with GEAM personnel, including representatives from the legal,
compliance and finance departments, senior members of each relevant investment
group (e.g., equity, fixed income) and research personnel. 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 agreements in recent years, noting that the information
they received was presented in a similar manner and format.
In reaching their determinations relating to continuance of the Funds'
investment advisory agreements, the Board members considered all factors they
believed 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 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 performance; (ii) effective processes used
for selecting investments, selecting brokers and with respect to Fund
administration, controllership and compliance activities; (iii) highly skilled
professionals, including analysts, research professionals and portfolio managers
with a depth of experience involving the types of Funds they oversee; (iv)
access to significant technological resources from which the Funds may benefit;
and (v) a favorable history and
43
<page>
Advisory Agreement Renewal, unaudited
reputation. The Board members discussed the personnel changes made, and proposed
to be made, 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 were of a high quality and had benefited the Funds.
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 indexes and peer groupings of mutual
funds prepared by Lipper with respect to various periods. The Board members also
engaged in discussions regarding the investment process for each Fund, the
portfolio management and supporting research personnel, the investment style and
approach employed for each Fund, the likely market cycles for the investment
style, and, in some instances, relative underperformance in certain periods in
light of GEAM's commitment to long-term satisfactory performance with respect to
each Fund's investment objective and investment approach. The Board members
concluded that the Funds' performance was acceptable overall taking into
consideration the factors discussed above.
COST OF THE SERVICES TO BE PROVIDED TO THE FUNDS.
The Board members considered the cost of the services provided by GEAM. The
Board members noted that, under each investment advisory agreement, GEAM is
reimbursed for its reasonable costs incurred in providing the services
contemplated by the agreement and for the reasonable costs incurred by its
affiliate, GE Investment Distributors, Inc. ("GEID"), in providing services
specified in its agreement with the Funds as unitholder servicing agent. 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. 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.
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
and consistent across 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
44
<page>
Advisory Agreement Renewal, unaudited
- --------------------------------------------------------------------------------
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. The Board members reviewed and concurred with information provided by
GEAM personnel, which showed how significant Fund asset growth can reduce a
Fund's operating expenses.
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 or
below 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 members' 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.
45
<page>
Additional Information, unaudited
- --------------------------------------------------------------------------------
INFORMATION ABOUT TRUSTEES AND EXECUTIVE OFFICERS:
The business and affairs of the Trust are managed under the direction of the
Trust's 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 53
POSITION 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 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 and
St. Lawrence University; Trustee of Elfun Funds and General Electric Pension
Trust since July 2007.
- --------------------------------------------------------------------------------
PAUL M COLONNA
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM, 3001 Summer St. Stamford, CT 06905
AGE 39
POSITION 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 Executive Vice President of GEAM
since March 2007; President - Fixed Income at GEAM since 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 PORFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE N/A
- --------------------------------------------------------------------------------
MICHAEL J. COSGROVE
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 58
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 20 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President of GEAM
(formerly President, GE Asset Management Services division ("GEAMS") of GE
Financial Assurance Holdings, Inc., an indirect wholly-owned subsidiary of
General Electric Company ("GE"), since February 1997; President and Chief
Executive Officer - Mutual Funds at GEAM since 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 48
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.
- --------------------------------------------------------------------------------
KATHRYN D. KARLIC
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 52
POSITIONS 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 Executive Vice President of GEAM
since March 2004; President - Institutional Sales at GEAM since March 2007;
President - Fixed Income at GEAM from March 2004 to March 2007; Senior Vice
President Fixed Income of GEAM from 2002 to 2004.
NUMBER OF PORFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General Electric
Pension Trust since 2006; Trustee of Babson College since 1999.
46
<page>
Additional Information, unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RALPH R. LAYMAN
- --------------------------------------------------------------------------------
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 Executive Vice President of GEAM
since 1993; President - International Equity Investments at GEAM since 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.
- --------------------------------------------------------------------------------
MATTHEW J. SIMPSON
- --------------------------------------------------------------------------------
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 Less than one year
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 48
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 55
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 4 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President of GEAM
since 2006; President - U.S. Equities at GEAM since June 2007; Executive Vice
President - Investment Strategies from July 2006 to June 2007; Senior Vice
President - International Equities of GEAM from 1995-2006; Senior Vice President
- - Domestic Equities of GEAM from 1991-1995; Vice President of Domestic Equities
from 1987-1991.
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 51
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 14 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President of GEAM
since 1997; President - Alternative Investments at GEAM since 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.
47
<page>
Additional Information, unaudited
- --------------------------------------------------------------------------------
JOHN J. WALKER
- --------------------------------------------------------------------------------
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 - 8 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.
48
<page>
GE S&S Mutual Funds' Investment Team
- --------------------------------------------------------------------------------
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)
Paul M. Colonna, TRUSTEE, EXECUTIVE VICE PRESIDENT OF GEAM, PRESIDENT - FIXED
INCOME
Michael J. Cosgrove, TRUSTEE, EXECUTIVE VICE PRESIDENT OF GEAM, PRESIDENT AND
CEO - MUTUAL FUNDS
Kathryn D. Karlic, TRUSTEE, EXECUTIVE VICE PRESIDENT OF GEAM, PRESIDENT -
INSTITUTIONAL SALES AND MARKETING
Ralph R. Layman, TRUSTEE, EXECUTIVE VICE PRESIDENT OF GEAM, PRESIDENT -
INTERNATIONAL EQUITIES
Matthew J. Simpson, EXECUTIVE VICE PRESIDENT OF GEAM, GENERAL COUNSEL AND
SECRETARY
Judith M. Studer, EXECUTIVE VICE PRESIDENT OF GEAM, PRESIDENT - U.S. EQUITIES
Donald W. Torey, EXECUTIVE VICE PRESIDENT OF GEAM, PRESIDENT - ALTERNATIVE
INVESTMENTS AND REAL ESTATE
John J. Walker, EXECUTIVE VICE PRESIDENT OF GEAM, CHIEF OPERATING OFFICER (AS OF
01/31/08)
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: Sinha Chitranjan
Thomas R. Lincoln William Healey
Paul C. Reinhardt Mark H. Johnson
James F. Palmieri
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
GE S&SP Transaction the Program to:
Processing Center GE Funds
P.O. Box 44079 c/o PFPC Inc.
Jacksonville, FL 32231-4079 P.O. Box 9838
Providence, RI 02940
49
<page>
Shareholder Services
- --------------------------------------------------------------------------------
DAILY VALUE, YIELDS/PERFORMANCE: 1-800-843-3359
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 at the web site
listed below) or GE Savings and Security Program Annual Statement. You may
obtain additional information and process account transactions on
investments held INSIDE the Program by calling:
GE S&SP TRANSACTION PROCESSING CENTER: 1-800-432-4313
OR VISIT BENEFITS.GE.COM
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
50
<page>
[This Page Left Intentionally Blank]
<page>
[This Page Left Intentionally Blank]
<page>
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.
[GE LOGO OMITTED]
SS-1 (2/08)
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 $18,400 in 2006 and
$19,300 in 2007.
(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 2003 or 2004 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 2006 and $0 in 2007.
(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 07, 2008
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 07, 2008
By: /S/SCOTT RHODES
Scott Rhodes
TREASURER, S&S FUNDS
Date: March 07, 2008
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.