ABO balances for our pension plans follow. ACCUMULATED BENEFIT OBLIGATION December 31 (In millions) GE Pension Plan GE Supplementary Pension Plan Other pension plans 2006 $38,137 2,314 8,053 2005 $38,044 2,178 7,194 Following is information about our pension plans in which the accu- mulated benefit obligation exceeds the fair value of plan assets. PLANS WITH ASSETS LESS THAN ABO December 31 (In millions) 2006 2005 Funded plans with assets less than ABO Plan assets $4,833 $4,737 Accumulated benefi t obligations 5,828 6,096 Projected benefi t obligations 6,667 6,967 Unfunded plans(a) Accrued pension liability 4,310 3,323 Accumulated benefi t obligations 3,052 2,859 Projected benefi t obligations 4,310 4,235 (a) Primarily related to the GE Supplementary Pension Plan. Pension plan assets are described below. FAIR VALUE OF PLAN ASSETS Principal pension plans Other pension plans (In millions) 2006 2005 2006 2005 Balance at January 1 $49,096 $46,665 $5,213 $4,602 Actual gain on plan assets 7,851 4,558 679 670 Employer contributions 121 106 451 365 Participant contributions 162 174 37 36 Benefi ts paid (2,472) (2,407) (287) (256) Exchange rate adjustments — — 340 (233) Acquired plans and other — — 2 29 Balance at December 31 $54,758 $49,096 $6,435 $5,213 Our pension plan assets are held in trust, as follows: PLAN ASSET ALLOCATION Principal pension plans 2006 2005 Target Actual Actual December 31 allocation allocation allocation U.S. equity securities 30–45% 41% 42% Non-U.S. equity securities 15–25 22 21 Debt securities 15–30 17 18 Real estate 4–10 6 6 Private equities 5–11 7 7 Other 1–12 7 6 Total 100% 100% notes to consolidated financial statements Plan fiduciaries of the GE Pension Plan set investment policies and strategies for the GE Pension Trust. Long-term strategic invest- ment objectives include preserving the funded status of the plan and balancing risk and return. These plan fi duciaries oversee the investment allocation process, which includes selecting investment managers, commissioning periodic asset-liability studies, setting long-term strategic targets and monitoring asset allocations. Target allocation ranges are guidelines, not limitations, and occa- sionally plan fiduciaries will approve allocations above or below a target range. GE Pension Trust assets are invested subject to the following additional guidelines: • Short-term securities must be rated A1/P1 or better, other than 15% of short-term holdings which may be rated A2/P2, • Real estate may not exceed 25% of total assets (6% of trust assets at December 31, 2006), • Investments in securities not freely tradable may not exceed 20% of total assets (13% of trust assets at December 31, 2006), and • GE stock is limited by statute when it reaches 10% of total trust assets (6.1% and 6.4% at the end of 2006 and 2005, respectively). Other pension plans (weighted average) 2006 2005 Target Actual Actual December 31 allocation allocation allocation Equity securities 66% 67% 65% Debt securities 28 26 28 Real estate 3 3 3 Other 3 4 4 Total 100% 100% ge 2006 annual report 83

notes to consolidated financial statements Our recorded assets and liabilities for pension plans are as follows: PREPAID PENSION ASSET (LIABILITY) Principal pension plans Other pension plans December 31 (In millions) 2006 2005 2006 2005 Funded status(a) $11,465 $ 5,765 $(2,599) $(2,884) Unrecognized prior service cost (b) 1,004 (b) 37 Unrecognized net actuarial loss (b) 8,445 (b) 2,046 Net amount recognized $11,465 $15,214 $(2,599) $ (801) Pension asset (liability) recorded in the Statement of Financial Position Prepaid pension asset $15,019 $17,853 $ 46 $ 114 Unfunded liabilities Due within one year (c) (106) (90) (49) (43) Due after one year (c) (3,448) (2,549) (2,596) (2,154) Intangible assets — — (b) 54 Shareowners’ equity — — (b) 1,228 Net amount recognized $11,465 $15,214 $(2,599) $ (801) Amounts recorded in shareowners’ equity Prior service cost $ 831 $ — $ 15 $ — Net actuarial loss 2,162 — 1,704 — Total $ 2,993 $ — $ 1,719 $ — (a) Fair value of assets less PBO, as shown in the preceding tables. (b) Amounts recognized in shareowners’ equity in 2006 upon adoption of SFAS 158. See note 1. (c) For principal pension plans, represents the GE Supplementary Pension Plan liability. The estimated prior service cost and net actuarial loss for the principal pension plans that will be amortized from shareowners’ equity into pension cost in 2007 are $200 million and $700 million, respectively. For other pension plans, the estimated prior service cost and net actuarial loss to be amortized over the next fi scal year is $10 million and $160 million, respectively. Comparable amortized amounts in 2006, respectively, were $253 million and $729 million for principal pension plans and $5 million and $164 million for other pension plans. Estimated future benefit payments are as follows: ESTIMATED FUTURE BENEFIT PAYMENTS 2012– 2016 (In millions) 2007 2008 2009 2010 2011 Principal pension plans $2,500 $2,500 $2,550 $2,600 $2,600 $14,500 Other pension plans 325 300 300 325 350 1,875 Our labor agreements with various U.S. unions expire in June 2007, and we will be engaged in negotiations to attain new agreements. While results of the 2007 union negotiations cannot be predicted, our recent past negotiations have resulted in agreements that increased costs. Note 8 Provision for Income Taxes (In millions) 2006 2005 2004 GE Current tax expense $1,738 $3,037 $2,148 Deferred tax expense (benefi t) from temporary differences 842 (287) (175) 2,580 2,750 1,973 GECS Current tax expense 266 1,938 1,497 Deferred tax expense (benefi t) from temporary differences 1,108 (653) 226 1,374 1,285 1,723 CONSOLIDATED Current tax expense 2,004 4,975 3,645 Deferred tax expense (benefi t) from temporary differences 1,950 (940) 51 Total $3,954 $4,035 $3,696 GE and GECS file a consolidated U.S. federal income tax return. The GECS provision for current tax expense includes its effect on the consolidated return. Consolidated current tax expense includes amounts appli- cable to U.S. federal income taxes of $61 million, $2,543 million and $629 million in 2006, 2005 and 2004, respectively, and amounts applicable to non-U.S. jurisdictions of $1,738 million, $2,224 million and $2,522 million in 2006, 2005 and 2004, respectively. Consolidated deferred taxes related to U.S. federal income taxes were an expense of $1,723 million in 2006 and benefits of $137 million and $27 million in 2005 and 2004, respectively. Consolidated U.S. earnings from continuing operations before income taxes were $9,245 million in 2006, $10,918 million in 2005 and $9,597 million in 2004. The corresponding amounts for non-U.S.-based operations were $15,375 million in 2006, $11,778 million in 2005 and $10,700 million in 2004. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and tax credit carryforwards, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. We evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. See note 21 for details. We have not provided U.S. deferred taxes on cumulative earnings of non-U.S. affiliates and associated companies that have been reinvested indefinitely. These earnings relate to ongoing operations and, at December 31, 2006, were approximately $47 billion. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the U.S. federal income tax lia- bility that would be payable if such earnings were not reinvested 84 ge 2006 annual report