notes to consolidated financial statements Trust assets invested in short-term securities must be invested in securities rated A1/P1 or better, other than 15% of short-term holdings which may be rated A2/P2. GE common stock represented 6.1% of trust assets at year-end 2006 and 2005 and is subject to a statutory limit when it reaches 10% of total trust assets. Our recorded balances for retiree benefit plans are as follows: RETIREE BENEFIT ASSET (LIABILITY) December 31 (In millions) 2006 2005 Funded status(a) $(6,552) $(7,465) Unrecognized prior service cost (b) 2,409 Unrecognized net actuarial loss (b) 902 Net liability recognized $(6,552) $(4,154) Liability recorded in the Statement of Financial Position Unfunded liabilities Retiree health plans Due within one year $ (681) $ (740) Due after one year (5,320) (3,395) Retiree life plans (551) (19) Net liability recognized $(6,552) $(4,154) Amounts recorded in shareowners’ equity Prior service cost $ 2,046 $ — Net actuarial loss 4 — Total $ 2,050 $ — (a) Fair value of assets less APBO, as shown in the preceding tables. (b) Amounts recognized in shareowners’ equity in 2006 upon adoption of SFAS 158. See note 1. The estimated prior service cost and net actuarial loss for our retiree benefit plans that will be amortized from shareowners’ equity into retiree benefit plans cost in 2007 are $290 million and $10 million, respectively. Comparable amortized amounts in 2006 were $363 million and $64 million, respectively. Our estimated future benefit payments are as follows: ESTIMATED FUTURE BENEFIT PAYMENTS 2012– 2016 (In millions) 2007 2008 2009 2010 2011 Gross $935 $920 $880 $860 $840 $3,760 Expected Medicare Part D subsidy 85 95 105 110 115 660 Net $850 $825 $775 $750 $725 $3,100 Our labor agreements with various U.S. unions expire in June 2007, and we will be engaged in negotiations to attain new agreements. Results of 2007 negotiations cannot be predicted. However, recent past negotiations have resulted in increased per capita costs as well as a corresponding increase in our APBO. There is no assurance that such increases pursuant to 2007 negotiations will be less than recent experience. Note 7 Pension Benefits We sponsor a number of pension plans. Principal pension plans, together with affiliate and certain other pension plans (other pension plans), detailed in this note, represent about 99% of our total pension assets. We use a December 31 measurement date for our plans. PRINCIPAL PENSION PLANS are the GE Pension Plan and the GE Supplementary Pension Plan. The GE Pension Plan provides benefits to certain U.S. employees based on the greater of a formula recognizing career earnings or a formula recognizing length of service and final average earnings. Certain benefit provisions are subject to collective bargaining. The GE Supplementary Pension Plan is an unfunded plan providing supplementary retirement benefits primarily to higher- level, longer-service U.S. employees. OTHER PENSION PLANS in 2006 included 27 U.S. and non-U.S. pension plans with pension assets or obligations greater than $50 million. These defi ned benefit plans provide benefi ts to employees based on formulas recognizing length of service and earnings. Effective December 31, 2006, we adopted SFAS 158, Employers’ Accounting for Defi ned Benefit Pension and Other Postretirement Plans. See note 1 for the incremental effects of the initial adoption of SFAS 158 on our Statement of Financial Position at December 31, 2006. PENSION PLAN PARTICIPANTS December 31, 2006 (In thousands) Total Principal pension plans Other pension plans Active employees 179 135 44 Vested former employees 223 185 38 Retirees and benefi ciaries 233 210 23 Total 635 530 105 ge 2006 annual report 81

notes to consolidated financial statements COST OF PENSION PLANS (In millions) 2006 Total Principal pension plans Other pension plans 2005 2004 2006 2005 2004 2006 2005 2004 Expected return on plan assets $(4,211) $(4,242) $(4,256) $(3,811) $(3,885) $(3,958) $(400) $(357) $(298) Service cost for benefi ts earned 1,719 1,618 1,436 1,402 1,359 1,178 317 259 258 Interest cost on benefi t obligation 2,685 2,609 2,511 2,304 2,248 2,199 381 361 312 Prior service cost 258 262 316 253 256 311 5 6 5 Net actuarial loss recognized 893 480 242 729 351 146 164 129 96 Total cost (income) $ 1,344 $ 727 $ 249 $ 877 $ 329 $ (124) $ 467 $ 398 $ 373 ACTUARIAL ASSUMPTIONS are described below. The discount rates at December 31 were used to measure the year-end benefi t obligations and the earnings effects for the subsequent year. ACTUARIAL ASSUMPTIONS December 31 2006 Principal pension plans Other pension plans (weighted average) 2005 2004 2003 2006 2005 2004 2003 Discount rate 5.75% 5.50% 5.75% 6.00% 4.97% 4.74% 5.28% 5.53% Compensation increases 5.00 5.00 5.00 5.00 4.26 4.20 4.03 3.87 Expected return on assets 8.50 8.50 8.50 8.50 7.44 7.47 7.67 7.56 To determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset alloca- tions, as well as historical and expected returns on various categories of plan assets. For the principal pension plans, we apply our expected rate of return to a market-related value of assets, which stabilizes variability in assets to which we apply that expected return. We amortize experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions over a period no longer than the average future service of employees. FUNDING POLICY for the GE Pension Plan is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws plus such additional amounts as we may determine to be appropriate. We have not made contri- butions to the GE Pension Plan since 1987. We will not make any contributions to the GE Pension Plan in 2007. In 2007, we expect to pay approximately $140 million for benefi t payments under our GE Supplementary Pension Plan and administrative expenses of our principal pension plans ($121 million in 2006), and expect to contribute approximately $570 million to other pension plans ($451 million in 2006). BENEFIT OBLIGATIONS are described in the following tables. Accumulated and projected benefit obligations (ABO and PBO) represent the obligations of a pension plan for past service as of the measurement date. ABO is the present value of benefi ts earned to date with benefits computed based on current compensation levels. PBO is ABO increased to refl ect expected future compensation. PROJECTED BENEFIT OBLIGATION Principal pension plans Other pension plans (In millions) 2006 2005 2006 2005 Balance at January 1 $43,331 $39,969 $8,097 $7,122 Service cost for benefi ts earned 1,402 1,359 317 259 Interest cost on benefi t obligations 2,304 2,248 381 361 Participant contributions 162 174 37 36 Plan amendments 80 — (18) 3 Actuarial (gain) loss(a) (1,514) 1,988 27 909 Benefi ts paid (2,472) (2,407) (287) (256) Exchange rate adjustments — — 520 (402) Acquired plans and other — — (40) 65 Balance at December 31(b) $43,293 $43,331 $9,034 $8,097 (a) Principally associated with discount rate changes. (b) The PBO for the GE Supplementary Pension Plan was $3,554 million and $3,534 million at year-end 2006 and 2005, respectively. 82 ge 2006 annual report