notes to consolidated financial statements At December 31, 2006 and 2005, the aggregate statutory capital and surplus of the insurance activities and discontinued insurance operations totaled $1.7 billion and $9.8 billion, respectively. Accounting practices prescribed by statutory authorities are used in preparing statutory statements. In December 2004, our Board of Directors authorized a three- year, $15 billion share repurchase program, expanded that program in 2005 to $25 billion and extended it through 2008. Under this share repurchase program, on a book basis we repurchased 229.4 million shares for a total of $7.8 billion during 2006. Common shares issued and outstanding are summarized in the following table. SHARES OF GE COMMON STOCK December 31 (In thousands) 2006 2005 2004 Issued 11,145,212 11,145,212 11,145,212 In treasury (867,839) (660,944) (558,854) Outstanding 10,277,373 10,484,268 10,586,358 GE has 50 million authorized shares of preferred stock ($1.00 par value), but has not issued any such shares as of December 31, 2006. Note 24 Other Stock-Related Information We grant stock options, restricted stock units (RSUs) and perfor- mance share units (PSUs) to employees under the 1990 Long-Term Incentive Plan as described in our current Proxy Statement. In addition, we grant options and RSUs in limited circumstances to consultants, advisors and independent contractors (primarily non- employee talent at NBC Universal) under a plan approved by our Board of Directors in 1997 (the consultants’ plan). There are outstanding grants under two separate shareowner-approved option plans for non-employee directors. Share requirements for all plans may be met from either unissued or treasury shares. Stock options expire 10 years from the date they are granted and vest over service periods that range from one to fi ve years. RSUs give the recipients the right to receive shares of our stock upon the lapse of their related restrictions. Restrictions on RSUs lapse in various increments and at various dates, beginning after three years from date of grant through grantee retirement. Although the plan permits us to issue RSUs settleable in cash, we have only issued RSUs settleable in shares of our stock. PSUs give recipients the right to receive shares of our stock upon the achievement of certain performance targets. All grants of GE options under all plans must be approved by the Management Development and Compensation Committee, which consists entirely of independent directors. STOCK COMPENSATION PLANS Weighted Securities Securities average available to be issued exercise for future December 31, 2006 (Shares in thousands) upon exercise price issuance APPROVED BY SHAREOWNERS Options 231,713 $35.25 (a) RSUs 34,224 (b) (a) PSUs 1,380 (b) (a) NOT APPROVED BY SHAREOWNERS (CONSULTANTS’ PLAN) Options 707 34.26 (c) RSUs 103 (b) (c) Total 268,127 $35.25 130,093 (a) Under the 1990 Long-Term Incentive Plan, 0.95% of issued common stock (includ- ing treasury shares) as of the first day of each calendar year during which the plan is in effect becomes available for awards in that calendar year. Total shares available for future issuance under the 1990 Long-Term Incentive Plan amounted to 105.9 million shares. (b) Not applicable. (c) Total shares available for future issuance under the consultants’ plan amount to 24.2 million shares. Outstanding options expire on various dates through December 14, 2016. The following table summarizes information about stock options outstanding at December 31, 2006. STOCK OPTIONS OUTSTANDING (Shares in thousands) Outstanding Exercisable Average Average exercise exercise Exercise price range Shares Average life (a) price Shares price Under $25.00 18,698 0.9 $22.69 18,683 $22.69 25.01–30.00 46,383 4.5 26.90 40,181 26.87 30.01–35.00 60,887 8.1 33.16 18,346 32.39 35.01–40.00 45,728 3.2 37.18 45,283 37.19 40.01–45.00 47,089 3.9 43.23 47,089 43.23 Over $45.00 13,635 3.7 56.16 13,635 56.16 Total 232,420 4.7 $35.25 183,217 $35.93 At year-end 2005, options with an average exercise price of $33.48 were exercisable on 200 million shares. (a) Average contractual life remaining in years. ge 2006 annual report 97

notes to consolidated financial statements STOCK OPTION ACTIVITY Weighted average Weighted remaining Aggregate average contractual intrinsic Shares exercise term value (in thousands) price (in years) (in millions) Outstanding at January 1, 2006(a) 259,116 $33.07 Granted 20,464 34.00 Exercised (35,335) 17.52 Forfeited (4,453) 32.46 Expired (7,372) 41.84 Outstanding at December 31, 2006 232,420 $35.25 4.7 $1,040 Exercisable at December 31, 2006 183,217 $35.93 3.8 $ 818 Options expected to vest 43,994 $32.61 8.1 $ 202 (a) Included 1.2 million options with a weighted average exercise price of $21.81 related to various acquisitions. We measure the fair value of each stock option grant at the date of grant using a Black-Scholes option pricing model. The weighted average grant-date fair value of options granted during 2006, 2005 and 2004 amounted to $7.99, $8.87 and $8.33, respectively. The following assumptions were used in arriving at the fair value of options granted during 2006, 2005 and 2004, respectively: risk-free interest rates of 4.8%, 4.1% and 4.0% dividend yields of 2.9%, 2.5% and 2.5% expected volatility of 24%, 28% and 28% and expected lives of six years and two months, six years and six years. Risk free interest rates reflect the yield on zero-coupon U.S. Treasury securities. Expected dividend yields presume a set dividend rate. Expected volatilities are based on implied volatilities from traded options and historical volatility of our stock. The expected option lives are based on our historical experience of employee exercise behavior. The total intrinsic value of options exercised during 2006, 2005 and 2004 amounted to $1,312 million, $731 million and $958 million, respectively. As of December 31, 2006, there was $200 million of total unrecognized compensation cost related to nonvested options. That cost is expected to be recognized over a weighted average period of three years and 11 months. Cash received from option exercises during 2006, 2005 and 2004 was $622 million, $403 million and $459 million, respectively. RSU ACTIVITY Weighted average remaining Aggregate contractual intrinsic Shares term value (in thousands) (in years) (in millions) Outstanding at January 1, 2006 Granted Vested Forfeited 33,078 9,167 (4,879) (3,039) Outstanding at December 31, 2006 34,327 5.6 $1,277 RSUs expected to vest 30,972 4.9 $1,152 The fair value of each restricted stock unit is the market price of our stock on the date of grant. The weighted average grant- date fair value of RSUs granted during 2006, 2005 and 2004 amounted to $33.95, $34.72 and $32.47, respectively. The total intrinsic value of RSUs vested during 2006, 2005 and 2004 amounted to $132 million, $90 million and $85 million, respec- tively. As of December 31, 2006, there was $535 million of total unrecognized compensation cost related to nonvested RSUs. That cost is expected to be recognized over a weighted average period of four years and 11 months. PSU activity As of December 31, 2006, 1.4 million PSUs with a weighted average remaining contractual term of two years, an aggregate intrinsic value of $51 million and $18 million of unrecognized compensation cost were outstanding. Note 25 Supplemental Cash Flows Information Changes in operating assets and liabilities are net of acquisitions and dispositions of principal businesses. Amounts reported in the “Payments for principal businesses purchased” line in the Statement of Cash Flows is net of cash acquired and included debt assumed and immediately repaid in acquisitions. Amounts reported in the “All other operating activities” line in the Statement of Cash Flows consists primarily of adjustments to current and noncurrent accruals and deferrals of costs and expenses, adjustments for gains and losses on assets, increases and decreases in assets held for sale and adjustments to assets. Significant non-cash transactions include the following: In 2006, in connection with our sale of GE Insurance Solutions, Swiss Re assumed $1,700 million of debt, and GE received $2,238 million of newly issued Swiss Re common stock. See note 2. In 2005, NBC Universal acquired IAC/InterActiveCorp’s 5.44% common interest in VUE for a total purchase price that included $115 million of non-cash consideration, representing the fair value of future services to be performed by NBC Universal and in 2004, the issuance of GE common stock valued at $10,674 million in connection with the acquisition of Amersham and the issuance of NBC Universal common stock valued at $5,845 million in connection with the combination of NBC and VUE. 98 ge 2006 annual report