General Electric (GE) 10-Q 2007 Q3 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number 1-35

GENERAL ELECTRIC COMPANY

(Exact name of registrant as specified in its charter)

New York	14-0689340
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3135 Easton Turnpike, Fairfield, CT	06828-0001
(Address of principal executive offices)	(Zip Code)
(Registrant’s telephone number, including area code) (203) 373-2211 _______________________________________________ (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

There were 10,106,209,000 shares of common stock with a par value of $0.06 per share outstanding at September 30, 2007.

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General Electric Company

	Page
Part I - Financial Information
Item 1. Financial Statements
Condensed Statement of Earnings
Three Months Ended September 30, 2007	3
Nine Months Ended September 30, 2007	4
Condensed Statement of Financial Position	5
Condensed Statement of Cash Flows	6
Summary of Operating Segments	7
Notes to Condensed, Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 4. Controls and Procedures	33
Part II - Other Information
Item 1. Legal Proceedings	33
Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	34
Item 6. Exhibits	35
Signatures	36

Forward-Looking Statements

This document contains “forward-looking statements” - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest and exchange rates and commodity and equity prices; the commercial and consumer credit environment; the impact of regulation and regulatory, investigative and legal actions; strategic actions, including acquisitions and dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

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Part I. Financial Information

Item 1. Financial Statements

Condensed Statement of Earnings

General Electric Company and consolidated affiliates

	Three months ended September 30 (Unaudited)
	Consolidated						GE						Financial Services (GECS)
(In millions; per-share amounts in dollars)	2007			2006			2007			2006			2007			2006
Sales of goods	$	15,354		$	13,390		$	15,271		$	12,990		$	277		$	519
Sales of services		9,269			9,110			9,387			9,199			-			-
Other income		384			567			464			610			-			-
GECS earnings from continuing operations		-			-			3,214			2,521			-			-
GECS revenues from services		17,527			14,807			-			-			17,843			15,067
Total revenues		42,534			37,874			28,336			25,320			18,120			15,586
Cost of goods sold		12,113			10,862			12,071			10,500			236			480
Cost of services sold		6,145			5,754			6,262			5,844			-			-
Interest and other financial charges		6,077			5,030			473			467			5,787			4,729
Investment contracts, insurance losses and
insurance annuity benefits		849			822			-			-			889			867
Provision for losses on financing receivables		1,223			793			-			-			1,223			793
Other costs and expenses		10,232			8,791			3,684			3,020			6,722			5,863
Minority interest in net earnings of
consolidated affiliates		190			198			136			142			54			56
Total costs and expenses		36,829			32,250			22,626			19,973			14,911			12,788
Earnings from continuing operations
before income taxes		5,705			5,624			5,710			5,347			3,209			2,798
Benefit (provision) for income taxes		(619	)		(875	)		(624	)		(598	)		5			(277	)
Earnings from continuing operations		5,086			4,749			5,086			4,749			3,214			2,521
Earnings (loss) from discontinued operations,
net of taxes		453			117			453			117			(1,347	)		(9	)
Net earnings	$	5,539		$	4,866		$	5,539		$	4,866		$	1,867		$	2,512
Per-share amounts
Per-share amounts - earnings from
continuing operations
Diluted earnings per share	$	0.50		$	0.46
Basic earnings per share	$	0.50		$	0.46
Per-share amounts - net earnings
Diluted earnings per share	$	0.54		$	0.47
Basic earnings per share	$	0.54		$	0.47
Dividends declared per share	$	0.28		$	0.25

See notes to condensed, consolidated financial statements. Separate information is shown for “GE” and “Financial Services (GECS).” Transactions between GE and GECS have been eliminated from the “Consolidated” columns.

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Condensed Statement of Earnings

General Electric Company and consolidated affiliates

	Nine months ended September 30 (Unaudited)
	Consolidated						GE						Financial Services (GECS)
(In millions; per-share amounts in dollars)	2007			2006			2007			2006			2007			2006
Sales of goods	$	43,345		$	40,098		$	43,366		$	38,658		$	337		$	1,786
Sales of services		26,886			26,397			27,293			26,679			-			-
Other income		2,319			1,662			2,550			1,771			-			-
GECS earnings from continuing operations		-			-			9,059			7,343			-			-
GECS revenues from services		51,612			42,382			-			-			52,503			43,131
Total revenues		124,162			110,539			82,268			74,451			52,840			44,917
Cost of goods sold		34,604			31,906			34,678			30,600			284			1,652
Cost of services sold		17,005			17,060			17,412			17,342			-			-
Interest and other financial charges		17,300			13,726			1,428			1,255			16,499			12,922
Investment contracts, insurance losses and
insurance annuity benefits		2,601			2,364			-			-			2,744			2,503
Provision for losses on financing receivables		3,216			2,200			-			-			3,216			2,200
Other costs and expenses		29,824			26,350			10,636			9,583			19,540			17,035
Minority interest in net earnings of
consolidated affiliates		634			635			445			454			189			181
Total costs and expenses		105,184			94,241			64,599			59,234			42,472			36,493
Earnings from continuing operations
before income taxes		18,978			16,298			17,669			15,217			10,368			8,424
Provision for income taxes		(3,322	)		(2,880	)		(2,013	)		(1,799	)		(1,309	)		(1,081	)
Earnings from continuing operations		15,656			13,418			15,656			13,418			9,059			7,343
Earnings (loss) from discontinued operations,
net of taxes		(135	)		866			(135	)		866			(2,003	)		429
Net earnings	$	15,521		$	14,284		$	15,521		$	14,284		$	7,056		$	7,772
Per-share amounts
Per-share amounts - earnings from
continuing operations
Diluted earnings per share	$	1.53		$	1.29
Basic earnings per share	$	1.53		$	1.29
Per-share amounts - net earnings
Diluted earnings per share	$	1.51		$	1.37
Basic earnings per share	$	1.52		$	1.38
Dividends declared per share	$	0.84		$	0.75

See notes to condensed, consolidated financial statements. Separate information is shown for “GE” and “Financial Services (GECS).” Transactions between GE and GECS have been eliminated from the “Consolidated” columns.

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Condensed Statement of Financial Position

General Electric Company and consolidated affiliates

	Consolidated						GE						Financial Services (GECS)
(In millions; except share amounts)	9/30/07			12/31/06			9/30/07			12/31/06			9/30/07			12/31/06
Cash and equivalents	$	19,848		$	14,099		$	7,232		$	4,480		$	12,760		$	12,452
Investment securities		45,209			47,806			438			342			44,780			47,472
Current receivables		12,705			12,200			13,033			12,524			-			-
Inventories		13,319			10,029			13,250			9,975			69			54
Financing receivables - net		361,684			328,562			-			-			361,684			328,589
Other GECS receivables		16,703			16,903			-			-			21,530			21,690
Property, plant and equipment (including
equipment leased to others) - net		76,292			70,650			13,523			12,675			62,769			57,975
Investment in GECS		-			-			56,194			54,097			-			-
Intangible assets - net		94,317			84,314			65,267			58,384			29,050			25,930
All other assets		114,257			92,212			36,086			34,003			79,500			59,387
Assets of discontinued operations		7,372			19,757			-			8,638			7,372			11,119
Total assets	$	761,706		$	696,532		$	205,023		$	195,118		$	619,514		$	564,668
Short-term borrowings	$	180,403		$	172,013		$	3,540		$	2,076		$	177,508		$	173,313
Accounts payable, principally trade accounts		18,716			20,632			10,352			10,969			12,685			13,803
Progress collections and price adjustments accrued		8,570			5,248			8,570			5,248			-			-
Other GE current liabilities		19,954			20,822			19,954			20,822			-			-
Long-term borrowings		311,220			260,752			9,087			9,043			303,424			252,953
Investment contracts, insurance liabilities
and insurance annuity benefits		34,074			34,501			-			-			34,408			34,807
All other liabilities		55,363			46,261			33,352			25,681			22,057			20,691
Deferred income taxes		10,758			14,325			927			1,755			9,831			12,570
Liabilities of discontinued operations		2,309			2,626			193			2,121			2,116			485
Total liabilities		641,367			577,180			85,975			77,715			562,029			508,622
Minority interest in equity of consolidated affiliates		7,508			7,493			6,217			5,544			1,291			1,949
Common stock (10,106,209,000 and 10,277,373,000
shares outstanding at September 30, 2007 and
December 31, 2006, respectively)		669			669			669			669			1			1
Accumulated gains (losses) - net
Investment securities		452			1,608			452			1,608			380			1,594
Currency translation adjustments		9,904			6,181			9,904			6,181			7,256			4,837
Cash flow hedges		(189	)		(129	)		(189	)		(129	)		(258	)		(171	)
Benefit plans		(5,931	)		(4,406	)		(5,931	)		(4,406	)		(262	)		(278	)
Other capital		25,923			25,486			25,923			25,486			12,550			12,537
Retained earnings		114,139			107,343			114,139			107,343			36,527			35,577
Less common stock held in treasury		(32,136	)		(24,893	)		(32,136	)		(24,893	)		-			-
Total shareowners’ equity		112,831			111,859			112,831			111,859			56,194			54,097
Total liabilities and equity	$	761,706		$	696,532		$	205,023		$	195,118		$	619,514		$	564,668

The sum of accumulated gains (losses) on investment securities, currency translation adjustments, cash flow hedges and benefit plans constitutes “Accumulated nonowner changes other than earnings,” and was $4,236 million and $3,254 million at September 30, 2007, and December 31, 2006, respectively.

See notes to condensed, consolidated financial statements. Separate information is shown for “GE” and “Financial Services (GECS).” September 30, 2007, data are unaudited. Transactions between GE and GECS have been eliminated from the “Consolidated” columns.

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Condensed Statement of Cash Flows

General Electric Company and consolidated affiliates

	Nine months ended September 30 (Unaudited)
	Consolidated						GE						Financial Services (GECS)
(In millions)	2007			2006			2007			2006			2007			2006
Cash flows - operating activities
Net earnings	$	15,521		$	14,284		$	15,521		$	14,284		$	7,056		$	7,772
Loss (earnings) from discontinued operations		135			(866	)		(1,868	)		(437	)		2,003			(429	)
Adjustments to reconcile net earnings to cash
provided from operating activities
Depreciation and amortization of property,
plant and equipment		7,432			6,159			1,577			1,442			5,855			4,717
Net earnings retained by GECS		-			-			(1,185	)		899			-			-
Deferred income taxes		778			1,299			239			711			539			588
Decrease (increase) in GE current receivables		(230	)		74			406			2,189			-			-
Increase in inventories		(1,963	)		(1,768	)		(1,959	)		(1,752	)		(4	)		(16	)
Decrease in accounts payable		(1,979	)		(1,582	)		(1,071	)		(494	)		(611	)		(739	)
Increase in GE progress collections		2,805			469			2,805			469			-			-
Provision for losses on GECS financing receivables		3,216			2,200			-			-			3,216			2,200
All other operating activities		(963	)		(127	)		2,202			348			(3,039	)		228
Cash from operating activities - continuing operations		24,752			20,142			16,667			17,659			15,015			14,321
Cash from (used for) operating activities - discontinued operations		3,917			1,554			(856	)		826			4,773			728
Cash from operating activities		28,669			21,696			15,811			18,485			19,788			15,049
Cash flows - investing activities
Additions to property, plant and equipment		(12,195	)		(10,470	)		(2,025	)		(2,020	)		(10,335	)		(8,588	)
Dispositions of property, plant and equipment		7,228			4,426			-			-			7,228			4,426
Net increase in GECS financing receivables		(24,675	)		(21,749	)		-			-			(24,535	)		(23,756	)
Payments for principal businesses purchased		(14,910	)		(10,888	)		(7,388	)		(3,990	)		(7,522	)		(6,898	)
Proceeds from sales of discontinued operations		11,457			8,112			10,826			-			-			8,112
Proceeds from principal business dispositions		2,114			1,090			1,012			1,090			1,102			-
All other investing activities		(7,643	)		(1,346	)		(2,108	)		641			(5,441	)		(3,144	)
Cash from (used for) investing activities - continuing operations		(38,624	)		(30,825	)		317			(4,279	)		(39,503	)		(29,848	)
Cash from (used for) investing activities - discontinued operations		(3,805	)		(4,068	)		1,002			(833	)		(4,807	)		(3,235	)
Cash from (used for) investing activities		(42,429	)		(34,893	)		1,319			(5,112	)		(44,310	)		(33,083	)
Cash flows - financing activities
Net increase (decrease) in borrowings (maturities of 90 days or less)		(8,087	)		596			(2,853	)		1,588			(8,467	)		(1,083	)
Newly issued debt (maturities longer than 90 days)		81,448			60,745			4,663			88			76,832			60,665
Repayments and other reductions (maturities longer than 90 days)		(36,801	)		(29,754	)		(171	)		(111	)		(36,630	)		(29,643	)
Net purchases of GE treasury shares		(7,220	)		(7,390	)		(7,220	)		(7,390	)		-			-
Dividends paid to shareowners		(8,651	)		(7,831	)		(8,651	)		(7,831	)		(5,871	)		(8,671	)
All other financing activities		(1,068	)		(747	)		-			-			(1,068	)		(747	)
Cash from (used for) financing activities - continuing operations		19,621			15,619			(14,232	)		(13,656	)		24,796			20,521
Cash from (used for) financing activities - discontinued operations		(149	)		(256	)		(146	)		7			(3	)		(263	)
Cash from (used for) financing activities		19,472			15,363			(14,378	)		(13,649	)		24,793			20,258
Increase (decrease) in cash and equivalents		5,712			2,166			2,752			(276	)		271			2,224
Cash and equivalents at beginning of year		14,276			11,801			4,480			2,015			12,629			10,106
Cash and equivalents at September 30		19,988			13,967			7,232			1,739			12,900			12,330
Less cash and equivalents of discontinued operations at September 30		140			369			-			-			140			369
Cash and equivalents of continuing operations at September 30	$	19,848		$	13,598		$	7,232		$	1,739		$	12,760		$	11,961

See notes to condensed, consolidated financial statements. Separate information is shown for “GE” and “Financial Services (GECS).” Transactions between GE and GECS have been eliminated from the “Consolidated” columns.

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Summary of Operating Segments

General Electric Company and consolidated affiliates

	Three months ended September 30 (Unaudited)						Nine months ended September 30 (Unaudited)
(In millions)	2007			2006			2007			2006
Revenues
Infrastructure	$	14,451		$	12,113		$	40,587		$	33,578
Commercial Finance		7,032			6,006			19,698			17,017
GE Money		6,207			5,064			18,441			14,408
Healthcare		4,062			3,891			12,002			11,860
NBC Universal		3,756			3,631			10,865			11,971
Industrial		6,229			6,256			18,285			18,696
Total segment revenues		41,737			36,961			119,878			107,530
Corporate items and eliminations		797			913			4,284			3,009
Consolidated revenues	$	42,534		$	37,874		$	124,162		$	110,539
Segment profit (a)
Infrastructure	$	2,615		$	2,339		$	7,386		$	6,131
Commercial Finance		1,450			1,290			4,121			3,521
GE Money		942			830			3,323			2,369
Healthcare		692			699			2,021			2,059
NBC Universal		589			542			2,184			2,078
Industrial		513			485			1,365			1,307
Total segment profit		6,801			6,185			20,400			17,465
Corporate items and eliminations		(618	)		(371	)		(1,303	)		(993	)
GE interest and other financial charges		(473	)		(467	)		(1,428	)		(1,255	)
GE provision for income taxes		(624	)		(598	)		(2,013	)		(1,799	)
Earnings from continuing operations		5,086			4,749			15,656			13,418
Earnings (loss) from discontinued operations,
net of taxes		453			117			(135	)		866
Consolidated net earnings	$	5,539		$	4,866		$	15,521		$	14,284

(a) Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations and accounting changes, and may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment’s management is measured - excluded in determining segment profit, which we also refer to as “operating profit,” for Healthcare, NBC Universal and the industrial businesses of the Infrastructure and Industrial segments; included in determining segment profit, which we also refer to as “net earnings,” for Commercial Finance, GE Money, and the financial services businesses of the Infrastructure segment (Aviation Financial Services, Energy Financial Services and Transportation Finance) and the Industrial segment (Equipment Services).

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Notes to Condensed, Consolidated Financial Statements (Unaudited)

1. The accompanying condensed, consolidated financial statements represent the consolidation of General Electric Company and all companies that we directly or indirectly control, either through majority ownership or otherwise. See note 1 to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2006. That note discusses consolidation and financial statement presentation. As used in this report on Form 10-Q (Report) and in the Annual Report on Form 10-K, “GE” represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services), which is presented on a one-line basis; GECS consists of General Electric Capital Services, Inc. and all of its affiliates; and “Consolidated” represents the adding together of GE and GECS with the effects of transactions between the two eliminated. We have reclassified certain prior-period amounts to conform to the current-period’s presentation. Unless otherwise indicated, information in these notes to condensed, consolidated financial statements relates to continuing operations.

As disclosed in our report on Form 8-K filed on October 12, 2007, we have concluded that the following policies and practices resulted in revenue being recorded in incorrect periods. For certain product sales, principally in our Healthcare, Infrastructure and Industrial segments, we recorded revenues upon shipment before risk of loss for damage in transit had been transferred to the customer. Separately, in our Aviation business, for certain long-term agreements that provide for product repair and maintenance services on GE-manufactured aircraft engines, our accounting procedures were incorrect with respect to the timing and amount of credits for certain used parts that were refurbished and reused or resold. We have made appropriate adjustments for these items in this report for prior-period financial information.

2. The condensed, consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed, consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. We label our quarterly information using a calendar convention, that is, first quarter is labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is our longstanding practice to establish interim quarterly closing dates using a fiscal calendar, which requires our businesses to close their books on either a Saturday or Sunday, depending on the business. The effects of this practice are modest and only exist within a reporting year. The fiscal closing calendar from 1993 through 2013 is available on our website, www.ge.com/secreports.

3. We classified our Japanese personal loan business (Lake), our U.S. mortgage business (WMC), Plastics, Advanced Materials, GE Life, Genworth Financial, Inc. (Genworth) and most of GE Insurance Solutions Corporation (GE Insurance Solutions) as discontinued operations. Associated results of operations, financial position and cash flows are separately reported as discontinued operations for all periods presented.

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Planned Sale of Lake and WMC

As previously disclosed, in September 2007, we committed to a plan to sell our Japanese personal loan business (Lake). We made the decision to sell this business upon determining that, despite restructuring, Japanese regulatory limits for interest charges on unsecured personal loans did not permit us to earn an acceptable return. We are actively pursuing a buyer and expect to complete the sale of this business by the end of the third quarter of 2008. In connection with this exit, we recorded an after-tax loss of $890 million in the third quarter of 2007, which represents the difference between the net book value of our Lake business and the projected sale price. In addition, we committed to a plan to sell our U.S. mortgage business (WMC), as a result of continued pressures in the U.S. subprime mortgage industry. In connection with this exit, we recorded an after-tax loss of $43 million in the third quarter of 2007, which represents the difference between the net book value of WMC and the projected sale price. Both businesses were previously reported in the GE Money segment.

Completed Sale of Plastics and Advanced Materials

In August 2007, we completed the sale of our Plastics business to Saudi Basic Industries Corporation for $11,577 million in cash. Also, during the fourth quarter of 2006, we sold our Advanced Materials business.

Completed Sale of Insurance Businesses

In 2006, we substantially completed our planned exit of our insurance businesses through the sale of the property and casualty insurance and reinsurance businesses and the European life and health operations of GE Insurance Solutions Corporation (GE Insurance Solutions) and the sale of GE Life, our U.K.-based life insurance operation, to Swiss Reinsurance Company (Swiss Re). Also during 2006, we completed the sale of our remaining 18% investment in Genworth Financial, Inc. (Genworth), our formerly wholly-owned subsidiary that conducted most of our consumer insurance business, including life and mortgage insurance operations, through a secondary public offering.

(9)

Financial information for discontinued GE industrial operations is shown below.

	Three months ended September 30						Nine months ended September 30
(In millions)	2007			2006			2007			2006
Operations
Total revenues	$	1,001		$	2,283		$	4,286		$	6,808
Earnings from discontinued operations before
income taxes	$	28		$	141		$	238		$	534
Income tax benefit (expense)		61			(15	)		69			(97	)
Earnings from discontinued operations before
disposal, net of taxes	$	89		$	126		$	307		$	437
Disposal
Gain on disposal before income taxes	$	2,554		$	-		$	2,363		$	-
Income tax expense		(843	)		-			(802	)		-
Gain on disposal, net of taxes	$	1,711		$	-		$	1,561		$	-
Earnings from discontinued operations,
net of taxes(a)	$	1,800		$	126		$	1,868		$	437

(a) The sum of GE industrial earnings from discontinued operations, net of taxes, and the corresponding amounts for GECS on page 11 are reported as GE earnings (loss) from discontinued operations, net of taxes, on the Condensed Statement of Earnings.

	At
(In millions)	9/30/07		12/31/06
Assets
Inventories	$	-	$	1,447
Property, plant and equipment (including equipment leased to others) - net		-		4,063
Intangible assets - net		-		2,081
Other		-		1,047
Assets of discontinued operations	$	-	$	8,638

	At
(In millions)	9/30/07		12/31/06
Liabilities
Accounts payable, principally trade accounts	$	-	$	944
Other GE current liabilities		32		594
Other		161		583
Liabilities of discontinued operations	$	193	$	2,121

(10)

Financial information for discontinued GECS operations is shown below.

	Three months ended September 30						Nine months ended September 30
(In millions)	2007			2006			2007			2006
Operations
Total revenues	$	(186	)	$	1,015		$	(468	)	$	5,711
Earnings (loss) from discontinued operations before
income taxes	$	(601	)	$	93		$	(1,928	)	$	677
Income tax benefit (expense)		175			(2	)		845			(109	)
Earnings (loss) from discontinued operations before
disposal, net of taxes	$	(426	)	$	91		$	(1,083	)	$	568
Disposal
Loss on disposal before income taxes	$	(1,549	)	$	(163	)	$	(1,560	)	$	(152	)
Income tax benefit		628			63			640			13
Loss on disposal, net of taxes	$	(921	)	$	(100	)	$	(920	)	$	(139	)
Earnings (loss) from discontinued operations,
net of taxes	$	(1,347	)	$	(9	)	$	(2,003	)	$	429

	At
(In millions)	9/30/07		12/31/06
Assets
Cash and equivalents	$	140	$	177
Financing receivables - net		5,330		5,643
All other assets		424		4,823
Other		1,478		476
Assets of discontinued operations	$	7,372	$	11,119

	At
(In millions)	9/30/07		12/31/06
Liabilities
Liabilities of discontinued operations	$	2,116	$	485

(11)

4. GECS revenues from services are summarized in the following table.

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007		2006
Interest on loans	$	6,122	$	5,139	$	17,594	$	15,176
Equipment leased to others		3,754		3,410		11,207		9,477
Financing leases		1,136		1,176		3,489		3,203
Fees		1,257		990		3,801		3,003
Real estate investments		1,364		845		3,420		2,187
Investment income(a)		860		691		3,005		1,921
Premiums earned by insurance activities		583		536		1,653		1,512
Associated companies		663		541		1,678		1,470
Gross securitization gains		368		331		1,486		865
Other items		1,736		1,408		5,170		4,317
Total	$	17,843	$	15,067	$	52,503	$	43,131

(a) Included gain on sale of common stock in Swiss Re of $558 million during first quarter of 2007.

5. We sponsor a number of pension and retiree health and life insurance benefit plans. Principal pension plans include the GE Pension Plan and the GE Supplementary Pension Plan. Principal retiree benefit plans generally provide health and life insurance benefits to employees who retire under the GE Pension Plan with 10 or more years of service. Other pension plans include U.S. and non-U.S. pension plans with pension assets or obligations greater than $50 million. Smaller pension plans and other retiree benefit plans are not material individually or in the aggregate. The effect on operations of the pension plans follows.

	Principal Pension Plans
	Three months ended September 30						Nine months ended September 30
(In millions)	2007			2006			2007			2006
Expected return on plan assets	$	(986	)	$	(953	)	$	(2,959	)	$	(2,858	)
Service cost for benefits earned		389			338			1,009			1,027
Interest cost on benefit obligation		599			576			1,810			1,728
Prior service cost		76			69			195			184
Net actuarial loss recognized		173			181			524			550
Cost of principal pension plans	$	251		$	211		$	579		$	631

(12)

	Other Pension Plans
	Three months ended September 30						Nine months ended September 30
(In millions)	2007			2006			2007			2006
Expected return on plan assets	$	(127	)	$	(101	)	$	(369	)	$	(298	)
Service cost for benefits earned		97			81			269			247
Interest cost on benefit obligation		117			96			340			283
Prior service cost		2			1			5			3
Net actuarial loss recognized		47			42			130			120
Cost of other pension plans	$	136		$	119		$	375		$	355

The effect on operations of principal retiree health and life insurance plans follows.

	Principal Retiree Health and Life Insurance Plans
	Three months ended September 30						Nine months ended September 30
(In millions)	2007			2006			2007			2006
Expected return on plan assets	$	(31	)	$	(31	)	$	(93	)	$	(95	)
Service cost for benefits earned		120			50			196			158
Interest cost on benefit obligation		163			114			388			342
Prior service cost		187			101			420			247
Net actuarial loss (gain) recognized		-			16			(15	)		52
Cost of principal retiree benefit plans	$	439		$	250		$	896		$	704

As previously disclosed in our quarterly report on Form 10-Q for the quarter ended June 30, 2007, on July 27, 2007, the GE Board of Directors approved new four-year labor agreements for most of our U.S. unions. The agreements, which were negotiated with and ratified by the respective unions, included amendments to our retiree health plans. The negotiated changes included increasing the lifetime maximum coverage for participants for certain medical programs, eliminating provisions that limit the Company’s contributions towards the cost of coverage provided to present and future retirees for certain medical and dental programs, increasing annual contributions for plan participants, increasing co-pays for certain services and prescription drugs, and improving certain medical and dental coverage provisions. Our principal retiree health obligation for eligible employees and retirees was remeasured to reflect the plan amendments. Our accumulated postretirement benefit obligation increased by $4.6 billion. After amortization of prior service costs and actuarial gains and losses, accumulated losses related to benefit plans - net, a reduction of shareowners’ equity, increased by $1.5 billion to $5.9 billion during the nine months ended September 30, 2007.

(13)

6. On January 1, 2007, we made required changes in certain aspects of our accounting for income taxes. The January 1, 2007, transition reduced our retained earnings by $126 million; of this total, $89 million was a decrease in goodwill and $77 million was a decrease in financing receivables − net, partially offset by a $40 million decrease in income tax liabilities.

The balance of “unrecognized tax benefits,” the amount of related interest and penalties we have provided and what we believe to be the range of reasonably possible changes in the next 12 months, were:

	At
(In millions)	9/30/07		1/1/07
Unrecognized tax benefits	$	6,312	$	6,806
Portion that, if recognized, would reduce tax expense and effective tax rate(a)		4,292		4,302
Accrued interest on unrecognized tax benefits		993		1,281
Accrued penalties on unrecognized tax benefits		86		121
Reasonably possible reduction to the balance of unrecognized tax benefits
in succeeding 12 months		0-1,550		0-1,900
Portion that, if recognized, would reduce tax expense and effective tax rate(a)		0-1,300		0-900

(a) Some portion of such reduction might be reported as discontinued operations.

We classify interest on tax deficiencies as interest expense; we classify income tax penalties as provision for income taxes. The change in unrecognized tax benefits in 2007 resulted primarily from completion of the 2000-2002 IRS audit and other audit activity in the second and third quarters and is reflected in decreases to unrecognized tax benefits for prior periods of $1,551 million, increases to unrecognized tax benefits for prior periods of $1,098 million, decreases from settlements with tax authorities agreeing to tax of $293 million, and increases to unrecognized tax benefits for current periods of $282 million.

The IRS is currently auditing our consolidated income tax returns for 2003-2005. In addition, certain other U.S. tax deficiency issues and refund claims for previous years remain unresolved. It is reasonably possible that the 2003-2005 U.S. audit cycle will be completed during the next 12 months. We believe that there are no other jurisdictions in which the outcome of unresolved issues or claims is likely to be material to our results of operations, financial position or cash flows. We further believe that we have made adequate provision for this and all other income tax uncertainties.

(14)

7. GE’s authorized common stock consists of 13,200,000,000 shares having a par value of $0.06 each. Information related to the calculation of earnings per share follows.

	Three months ended September 30
	2007						2006
(In millions; per-share amounts in dollars)	Diluted			Basic			Diluted		Basic
Consolidated
Earnings from continuing operations for
per-share calculation(a)	$	5,086		$	5,086		$	4,750	$	4,749
Earnings from discontinued operations
for per-share calculation	$	453		$	453		$	117	$	117
Net earnings available for per-share calculation	$	5,540		$	5,539		$	4,867	$	4,866
Average equivalent shares
Shares of GE common stock outstanding		10,177			10,177			10,317		10,317
Employee compensation-related shares,
including stock options		38			-			31		-
Total average equivalent shares		10,215			10,177			10,348		10,317
Per-share amounts
Earnings from continuing operations	$	0.50		$	0.50		$	0.46	$	0.46
Earnings from discontinued operations	$	0.04		$	0.04		$	0.01	$	0.01
Net earnings	$	0.54		$	0.54		$	0.47	$	0.47
	Nine months ended September 30
	2007						2006
(In millions; per-share amounts in dollars)	Diluted			Basic			Diluted		Basic
Consolidated
Earnings from continuing operations for
per-share calculation(a)	$	15,657		$	15,656		$	13,420	$	13,418
Earnings (loss) from discontinued operations
for per-share calculation	$	(135	)	$	(135	)	$	865	$	866
Net earnings available for per-share calculation	$	15,522		$	15,521		$	14,285	$	14,284
Average equivalent shares
Shares of GE common stock outstanding		10,230			10,230			10,380		10,380
Employee compensation-related shares,
including stock options		36			-			35		-
Total average equivalent shares		10,266			10,230			10,415		10,380
Per-share amounts
Earnings from continuing operations	$	1.53		$	1.53		$	1.29	$	1.29
Earnings (loss) from discontinued operations	$	(0.01	)	$	(0.01	)	$	0.08	$	0.08
Net earnings	$	1.51		$	1.52		$	1.37	$	1.38

(a) Including dividend equivalents.

(15)

Earnings-per-share amounts are computed independently for earnings from continuing operations, earnings (loss) from discontinued operations and net earnings. As a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings.

8. Inventories consisted of the following.

	At
(In millions)	9/30/07			12/31/06
Raw materials and work in process	$	7,888		$	5,843
Finished goods		5,354			4,341
Unbilled shipments		659			409
		13,901			10,593
Less revaluation to LIFO		(582	)		(564	)
Total	$	13,319		$	10,029

9. GECS financing receivables - net, consisted of the following.

	At
(In millions)	9/30/07			12/31/06
Loans, net of deferred income	$	290,759		$	264,039
Investment in financing leases, net of deferred income		74,890			68,569
		365,649			332,608
Less allowance for losses		(3,965	)		(4,019	)
Financing receivables - net(a)	$	361,684		$	328,589

(a) Included $10,383 million and $11,509 million related to consolidated, liquidating securitization entities at September 30, 2007, and December 31, 2006, respectively.

10. Property, plant and equipment (including equipment leased to others) - net, consisted of the following.

	At
(In millions)	9/30/07			12/31/06
Original cost	$	117,694		$	109,371
Less accumulated depreciation and amortization		(41,402	)		(38,721	)
Property, plant and equipment (including equipment leased to others) - net	$	76,292		$	70,650

(16)

11. Intangible assets - net, consisted of the following.

	At
(In millions)	9/30/07		12/31/06
Goodwill	$	79,093	$	71,399
Intangible assets subject to amortization		12,970		10,637
Indefinite-lived intangible assets(a)		2,254		2,278
Total	$	94,317	$	84,314

(a) Indefinite-lived intangible assets principally comprised trademarks, tradenames and U.S. Federal Communications Commission licenses.

Changes in goodwill balances follow.

(In millions)	Balance 1/1/07		(a)	Acquisitions/ purchase accounting adjustments				Dispositions, currency exchange and other			Balance 9/30/07
Infrastructure	$	10,931			$	5,269			$	105	$	16,305
Commercial Finance		11,315				1,646				189		13,150
GE Money		9,845				(15	)			330		10,160
Healthcare		14,759				(17	)			28		14,770
NBC Universal		18,000				(58	)			1		17,943
Industrial		6,460				254				51		6,765
Total	$	71,310			$	7,079			$	704	$	79,093

(a) January 1, 2007, balance decreased by $89 million related to new accounting standards. See note 6.

Goodwill balances increased $7,266 million in 2007 as a result of new acquisitions. The largest goodwill balance increases arose from acquisitions of Smiths Aerospace Group Ltd. ($3,591 million at Infrastructure); Vetco Gray ($1,442 million at Infrastructure); Trustreet Properties, Inc. ($831 million at Commercial Finance); Diskont und Kredit AG and Disko Leasing GmbH (DISKO) and ASL Auto Service-Leasing GmbH (ASL), the leasing businesses of KG Allgemeine Leasing GmbH & Co. ($531 million at Commercial Finance); and Sanyo Electric Credit Co., Ltd. ($324 million at Commercial Finance). During 2007, we reduced goodwill associated with acquisitions completed before January 1, 2007, by $187 million. The largest such adjustment was a decrease of $54 million associated with the 2006 acquisition of Banque Artesia Nederland N.V. by Commercial Finance.

(17)

Intangible Assets Subject to Amortization

	At
	9/30/07								12/31/06
(In millions)	Gross carrying amount		Accumulated amortization				Net		Gross carrying amount		Accumulated amortization				Net
Patents, licenses and trademarks	$	5,697		$	(1,811	)	$	3,886	$	4,962		$	(1,491	)	$	3,471
Capitalized software		6,472			(3,870	)		2,602		5,829			(3,432	)		2,397
All other		8,654			(2,172	)		6,482		6,452			(1,683	)		4,769
Total	$	20,823		$	(7,853	)	$	12,970	$	17,243		$	(6,606	)	$	10,637

Consolidated amortization expense related to intangible assets subject to amortization amounted to $547 million and $438 million for the quarters ended September 30, 2007 and 2006, respectively. Consolidated amortization expense related to intangible assets subject to amortization for the nine months ended September 30, 2007 and 2006, amounted to $1,465 million and $1,291 million, respectively.

12. GECS borrowings are summarized in the following table.

	At
(In millions)	9/30/07		12/31/06
Short-term borrowings
Commercial paper
U.S.
Unsecured	$	65,462	$	67,423
Asset-backed(a)		5,088		6,430
Non-U.S.		27,238		26,328
Current portion of long-term debt		52,866		44,550
GE Interest Plus notes(b)		9,646		9,161
Other		17,208		19,421
Total		177,508		173,313
Long-term borrowings
Senior notes
Unsecured		283,394		235,942
Asset-backed(c)		5,346		5,810
Extendible notes		6,000		6,000
Subordinated notes(d)		8,684		5,201
Total		303,424		252,953
Total borrowings	$	480,932	$	426,266

(a)	Entirely obligations of consolidated, liquidating securitization entities. See note 14.
(b)	Entirely variable denomination floating rate demand notes.
(c)	Included $4,210 million and $4,684 million of asset-backed senior notes, issued by consolidated, liquidating securitization entities at September 30, 2007, and December 31, 2006, respectively. See note 14.
(d)	Included $750 million of subordinated notes guaranteed by GE at September 30, 2007, and December 31, 2006.

(18)

13. In the Consolidated Statement of Changes in Shareowners’ Equity and in the related note in our 2006 Annual Report on Form 10-K, we disclosed and included the $3,819 million cumulative effect of adopting Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, in the caption “Total changes other than transactions with shareowners.” Transition provisions of SFAS 158 required that this cumulative effect be presented as a direct adjustment to the “ending balance of Accumulated Other Comprehensive Income” rather than as part of comprehensive income for the period. Consequently, the amount reported under the caption “Total changes other than transactions with shareowners” for 2006 should have been $24,765 million, rather than the $20,946 million we reported. The difference, $3,819 million, should have been reported as a direct reduction of accumulated other comprehensive income within equity. In our 2007 Annual Report on Form 10-K, we will modify our presentation. This modification only affects the display of the cumulative effect of the accounting change within equity and does not otherwise affect our financial statements.

A summary of increases (decreases) in shareowners’ equity that did not result directly from transactions with shareowners, net of income taxes, follows.

	Three months ended September 30						Nine months ended September 30
(In millions)	2007			2006			2007			2006
Net earnings	$	5,539		$	4,866		$	15,521		$	14,284
Investment securities - net		3			800			(1,156	)		(578	)
Currency translation adjustments - net		1,979			481			3,723			2,216
Cash flow hedges - net		(789	)		(199	)		(60	)		180
Benefit plans - net		(2,045	)		22			(1,525	)		(21	)
Total	$	4,687		$	5,970		$	16,503		$	16,081

(19)

14. The following table represents assets in securitization entities, both consolidated and off-balance sheet.

	At
(In millions)	9/30/07		12/31/06
Receivables secured by
Equipment	$	7,686	$	9,590
Commercial real estate		10,871		11,324
Residential real estate(a)		3,806		4,680
Other assets		14,264		14,743
Credit card receivables		21,234		12,947
Trade receivables		3,240		3,918
Total securitized assets	$	61,101	$	57,202

	At
(In millions)	9/30/07		12/31/06
Off-balance sheet(a)(b)(c)	$	50,607	$	45,555
On-balance sheet(d)(e)		10,494		11,647
Total securitized assets	$	61,101	$	57,202

(a)	Excluded assets of $2,147 million and $2,649 million at September 30, 2007 and December 31, 2006, respectively, associated with the planned sale of WMC.
(b)	At September 30, 2007, and December 31, 2006, liquidity support amounted to $2,868 million and $753 million, respectively. The December 31, 2006, amount is net of $3,034 million deferred beyond one year. Credit support amounted to $2,544 million and $3,815 million at September 30, 2007, and December 31, 2006, respectively.
(c)	Liabilities for recourse obligations related to off-balance sheet assets were $2 million and $27 million at September 30, 2007, and December 31, 2006, respectively.
(d)	At September 30, 2007, and December 31, 2006, liquidity support amounted to $5,211 million and $6,585 million, respectively. Credit support amounted to $2,808 million and $2,926 million at September 30, 2007, and December 31, 2006, respectively.
(e)	Included $10,383 million and $11,509 million of financing receivables - net related to consolidated, liquidating securitization entities at September 30, 2007, and December 31, 2006, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

A. Results of Operations

General Electric Company’s consolidated financial statements represent the combination of the industrial manufacturing and product services businesses of General Electric Company (GE) and the financial services businesses of General Electric Capital Services, Inc. (GECS or financial services).

In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission (SEC) rules. For such measures, we have provided supplemental explanations and reconciliations in Exhibit 99 to this report on Form 10-Q.

(20)

Unless otherwise indicated, we refer to captions such as revenues and earnings from continuing operations simply as “revenues” and “earnings” throughout this Management’s Discussion and Analysis. Similarly, discussion of other matters in our condensed, consolidated financial statements relates to continuing operations unless otherwise indicated.

Overview

General Electric Company’s earnings from continuing operations increased 7% to $5.086 billion in the third quarter of 2007 compared with $4.749 billion in 2006. Earnings per share (EPS) from continuing operations were $0.50 in the third quarter of 2007, up 9% from last year’s $0.46.

For the first nine months of 2007, earnings from continuing operations increased 17% to $15.656 billion compared with $13.418 billion for the same period in 2006. EPS from continuing operations were $1.53 in the first nine months of 2007, up 19% from last year’s $1.29.

Earnings from discontinued operations, net of taxes, were $0.5 billion for the third quarter of 2007 compared with $0.1 billion for the same period in 2006, including the results of our Japanese personal loan business (Lake), our U.S. mortgage business (WMC), Plastics, Advanced Materials, most of GE Insurance Solutions Corporation (GE Insurance Solutions), GE Life and Genworth Financial, Inc. (Genworth).

Loss from discontinued operations, net of taxes, was $0.1 billion for the first nine months of 2007 compared with earnings of $0.9 billion for the same period in 2006.

Net earnings increased 14% to $5.539 billion and EPS increased 15% to $0.54 in the third quarter of 2007 compared with $4.866 billion and $0.47 per share, respectively, in 2006.

For the first nine months of 2007, net earnings increased 9% to $15.521 billion compared with $14.284 billion for the same period in 2006, and EPS increased 10% to $1.51, compared with last year’s $1.37.

Revenues of $42.5 billion in the third quarter of 2007 were 12% higher than in the corresponding period of 2006, reflecting strong organic growth of 8% and the net effects of acquisitions. A reconciliation between reported and organic revenues is shown in Exhibit 99. Industrial sales increased 11% to $24.7 billion, reflecting strong organic growth, the net effects of acquisitions and the weaker U.S. dollar. Sales of product services (including sales of spare parts and related services) increased 7% to $7.8 billion in the third quarter of 2007. Financial services revenues grew 16% to $18.1 billion as a result of organic revenue growth, the weaker U.S. dollar and the 2006 GECS commercial paper interest rate swap adjustment ($0.2 billion).

Revenues for the first nine months of 2007 rose 12% to $124.2 billion, compared with $110.5 billion last year. Industrial sales of $70.7 billion were 8% higher than in 2006 reflecting strong organic growth, the effect of acquisitions and the weaker U.S. dollar, partially offset by the effects of the GE Supply disposition in 2006 and the lack of a current-year counterpart to the first quarter 2006 Olympics broadcasts. Financial services revenues for the first nine months of 2007 grew 18% to $52.8 billion as a result of organic revenue growth, including the gain on sale of common stock in Swiss Reinsurance Company (Swiss Re), the weaker U.S. dollar and the second quarter 2006 consolidation of GE SeaCo, an entity previously accounted for using the equity method, partially offset by the 2006 GECS commercial paper interest rate swap adjustment ($0.2 billion).

(21)

Overall, acquisitions contributed $2.2 billion and $0.9 billion to consolidated revenues in the third quarters of 2007 and 2006, respectively. Our consolidated net earnings in the third quarters of both 2007 and 2006 included approximately $0.1 billion from acquired businesses. We integrate acquisitions as quickly as possible. Only revenues and earnings from the date we complete the acquisition through the end of the fourth following quarter are attributed to such businesses. Dispositions also affected our operations through lower revenues of $1.1 billion and $0.2 billion in the third quarters of 2007 and 2006, respectively. The effect of dispositions on earnings was a decrease of $0.2 billion in the third quarter of 2007 and an increase of $0.1 billion in the third quarter of 2006.

Acquisitions contributed $5.3 billion and $2.7 billion to consolidated revenues in the first nine months of 2007 and 2006, respectively. Our consolidated net earnings in the first nine months of both 2007 and 2006 included approximately $0.3 billion from acquired businesses. Dispositions also affected our operations through lower revenues of $2.9 billion and $0.7 billion in the first nine months of 2007 and 2006, respectively. The effects of dispositions on earnings were increases of $0.3 billion and $0.2 billion in the first nine months of 2007 and 2006, respectively.

The most significant acquisitions affecting results in 2007 were Vetco Gray; Smiths Aerospace Group Ltd. and Regency Energy Partners LP at Infrastructure; the custom fleet business of National Australia Bank Ltd.; Diskont und Kredit AG and Disko Leasing GmbH (DISKO) and ASL Auto Service-Leasing GmbH (ASL), the leasing businesses of KG Allgemeine Leasing GmbH & Co.; Arden Realty, Inc.; Banque Artesia Nederland N.V.; Trustreet Properties, Inc.; and Sanyo Electric Credit Co., Ltd. at Commercial Finance.

Segment Operations

Operating segments comprise our six businesses focused on the broad markets they serve: Infrastructure, Commercial Finance, GE Money, Healthcare, NBC Universal and Industrial. For segment reporting purposes, certain GECS businesses are included in the industrial operating segments that actively manage such businesses and report their results for internal performance measurement purposes. These include Aviation Financial Services, Energy Financial Services and Transportation Finance reported in the Infrastructure segment, and Equipment Services reported in the Industrial segment.

Segment profit is determined based on internal performance measures used by the Chief Executive Officer to assess the performance of each business in a given period. In connection with that assessment, the Chief Executive Officer may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team.

Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations and accounting changes. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment’s management is measured - excluded in determining segment profit, which we also refer to as “operating profit,” for Healthcare, NBC Universal and the industrial businesses of the Infrastructure and Industrial segments; included in determining segment profit, which we also refer to as “net earnings,” for Commercial Finance, GE Money, and the financial services businesses of the Infrastructure segment (Aviation Financial Services, Energy Financial Services and Transportation Finance) and the Industrial segment (Equipment Services).

(22)

We have reclassified and adjusted certain prior-period amounts to conform to the current-period’s presentation. In addition to providing information on segments in their entirety, we have also provided supplemental information for certain businesses within the segments.

Infrastructure

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007		2006
Revenues	$	14,451	$	12,113	$	40,587	$	33,578
Segment profit	$	2,615	$	2,339	$	7,386	$	6,131
Revenues
Aviation	$	4,240	$	3,133	$	11,770	$	9,430
Aviation Financial Services		1,134		1,075		3,471		2,990
Energy		5,205		5,078		15,067		13,360
Energy Financial Services		832		524		1,573		1,189
Oil & Gas		1,699		1,033		4,668		2,901
Transportation		1,109		1,017		3,344		3,041
Segment profit
Aviation	$	736	$	689	$	2,263	$	2,044
Aviation Financial Services		256		261		910		777
Energy		823		761		2,407		1,877
Energy Financial Services		266		234		536		497
Oil & Gas		237		163		528		327
Transportation		253		196		684		565

Infrastructure revenues increased 19%, or $2.3 billion, in the third quarter of 2007 reflecting higher volume ($1.5 billion), higher prices ($0.3 billion) and the weaker U.S. dollar ($0.1 billion) at the industrial businesses of the segment. The increase in volume reflected increased equipment sales, services and acquisitions at Aviation and Oil & Gas. Higher prices were primarily at Energy and Aviation. Revenues also increased as a result of an acquisition at Energy Financial Services ($0.3 billion).

Segment profit rose 12%, or $0.3 billion, in the third quarter of 2007, as higher prices ($0.3 billion) and higher volume ($0.2 billion) were partially offset by higher material and other costs ($0.3 billion) at the industrial businesses of the segment. Volume increases were primarily at Aviation and Oil & Gas. Higher prices, as well as higher material and other costs, were primarily at Energy and Aviation.

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Infrastructure revenues rose 21% to $40.6 billion for the nine months ended September 30, 2007, on higher volume ($5.1 billion), increased prices ($0.6 billion) and the weaker U.S. dollar ($0.4 billion) at the industrial businesses of the segment. The increase in volume reflected the effects of acquisitions at Aviation and Oil & Gas; increased sales of commercial engines and services at Aviation; and equipment at Energy and Transportation. Price increases were primarily at Energy and Aviation, while the effects of the weaker U.S. dollar were primarily at Oil & Gas and Energy. Revenues for the nine months also increased as a result of organic revenue growth ($0.4 billion), primarily related to gains on the sale of aircraft, and acquisitions ($0.1 billion) at Aviation Financial Services, and an acquisition ($0.3 billion) and organic revenue growth ($0.1 billion) at Energy Financial Services.

Segment profit for the first nine months of 2007 rose 20% to $7.4 billion, compared with $6.1 billion in 2006, as higher volume ($0.8 billion), higher prices ($0.6 billion) and productivity ($0.2 billion) were partially offset by higher material and other costs ($0.6 billion) at the industrial businesses of the segment. Volume increases were primarily at Aviation, Energy and Oil & Gas. The effects of higher prices were primarily at Energy and Aviation. We realized productivity improvements at Energy, Transportation and Water. Higher material and other costs were primarily at Aviation and Energy. Segment profit for the first nine months also increased as a result of core growth at Aviation Financial Services ($0.1 billion).

Commercial Finance

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007		2006
Revenues	$	7,032	$	6,006	$	19,698	$	17,017
Segment profit	$	1,450	$	1,290	$	4,121	$	3,521
	At
(In millions)	9/30/07		9/30/06		12/31/06
Total assets	$	275,699	$	215,276	$	233,536

(24)

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007		2006
Revenues
Capital Solutions	$	3,166	$	3,101	$	9,128	$	8,968
Real Estate		1,937		1,328		5,109		3,450
Segment profit
Capital Solutions	$	424	$	525	$	1,258	$	1,297
Real Estate		640		440		1,680		1,215
	At
(In millions)	9/30/07		9/30/06		12/31/06
Assets
Capital Solutions	$	113,564	$	92,560	$	94,523
Real Estate		72,197		48,525		53,786

Commercial Finance revenues and net earnings increased 17% and 12%, respectively, compared with the third quarter of 2006. Revenues for the third quarter of 2007 and 2006 included $0.6 billion and $0.1 billion from acquisitions, respectively, and in 2007 were reduced by $0.5 billion as a result of dispositions. Revenues for the quarter also increased $1.0 billion compared with the third quarter of 2006 as a result of organic revenue growth ($0.8 billion) and the weaker U.S. dollar ($0.2 billion). Net earnings increased by $0.2 billion in the third quarter of 2007, with $0.3 billion from core growth before credit losses and investment income. Core growth included $0.1 billion representing one quarter of the total year’s tax benefit on the disposition of SES, $0.1 billion of higher credit losses and $0.1 billion in charges related to mark-to-market adjustments to loans held-for-sale, and impairment of securitization retained interests.

Commercial Finance revenues and net earnings increased 16% and 17%, respectively, compared with the first nine months of 2006. Revenues for the first nine months of 2007 and 2006 included $1.7 billion and $0.1 billion from acquisitions and in 2007 were reduced by $1.7 billion as a result of dispositions. Revenues for the first nine months also increased $2.7 billion compared with the first nine months of 2006 as a result of organic revenue growth ($2.2 billion) and the weaker U.S. dollar ($0.5 billion). Net earnings increased by $0.6 billion in the first nine months of 2007, with $0.8 billion from core growth before credit losses and investment income including higher SES gains ($0.1 billion), the weaker U.S. dollar ($0.1 billion) and acquisitions ($0.1 billion). Core growth included $0.4 billion representing nine months of the total year’s tax benefit on the disposition of SES, $0.2 billion of higher credit losses and $0.1 billion in charges related to mark-to-market adjustments to loans held-for-sale, and impairment of securitization retained interests.

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GE Money

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007		2006
Revenues	$	6,207	$	5,064	$	18,441	$	14,408
Segment profit	$	942	$	830	$	3,323	$	2,369
	At
(In millions)	9/30/07		9/30/06		12/31/06
Total assets	$	198,519	$	165,319	$	179,284

GE Money revenues and net earnings increased 23% and 13%, respectively, in the third quarter of 2007. Revenues for the third quarter of 2007 included $0.1 billion from acquisitions. Revenues for the quarter also increased $1.0 billion compared with the third quarter of 2006 as a result of organic revenue growth ($0.7 billion) and the weaker U.S. dollar ($0.3 billion). The $0.1 billion increase in net earnings resulted primarily from higher securitizations, the weaker U.S. dollar and core growth. Core growth included growth in lower-taxed earnings from global operations and lower results in the U.S. as a result of the effects of higher delinquencies and declines in fair value of retained interests in securitizations.

GE Money revenues and net earnings increased 28% and 40%, respectively, in the first nine months of 2007. Revenues for the first nine months of 2007 included $0.3 billion from acquisitions. Revenues for the first nine months also increased $3.7 billion compared with the first nine months of 2006 as a result of organic revenue growth ($2.8 billion) and the weaker U.S. dollar ($0.9 billion). The increase in net earnings resulted primarily from higher securitizations ($0.4 billion), core growth ($0.4 billion), including growth in lower-taxed earnings from global operations and declines in fair value of retained interests in securitizations, and the weaker U.S. dollar ($0.1 billion).

Healthcare revenues increased $0.2 billion, or 4%, in the third quarter of 2007, as higher volume ($0.2 billion) and the weaker U.S. dollar ($0.1 billion) were partially offset by lower prices ($0.1 billion). Despite price pressures on U.S. equipment sales, revenues of the life sciences and clinical systems businesses and sales of international equipment rose. Segment profit of $0.7 billion in the third quarter of 2007 was about the same in the third quarter of 2006, as higher volume ($0.1 billion) and the effects of productivity ($0.1 billion) were offset by lower prices ($0.1 billion) and higher labor and other costs ($0.1 billion).

Healthcare revenues increased $0.1 billion to $12.0 billion in the first nine months of 2007, as the effects of the weaker U.S. dollar ($0.3 billion) and higher volume ($0.2 billion) were partially offset by lower prices ($0.3 billion). Despite price pressures on U.S. equipment sales, revenues of the clinical systems, life sciences and medical diagnostics businesses, and sales of international equipment rose. Segment profit of $2.0 billion in the first nine months of 2007 was about the same in the first nine months of 2006 as the effects of productivity ($0.3 billion) and higher volume ($0.1 billion) were offset by lower prices ($0.3 billion) and higher labor and other costs ($0.1 billion).

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NBC Universal revenues increased $0.1 billion, or 3%, in the third quarter of 2007, as higher revenues in television studio and distribution ($0.1 billion), film ($0.1 billion) and cable ($0.1 billion), were partially offset by lower ad revenues in certain television businesses ($0.1 billion). Segment profit rose 9% to $0.6 billion primarily on improvements in television studio and distribution ($0.1 billion), partially offset by the effects of lower ad revenues noted above ($0.1 billion).

NBC Universal reported revenues of $10.9 billion in the first nine months of 2007, a decline of $1.1 billion, or 9%, from 2006, as the lack of a current-year counterpart to the 2006 Olympic Games broadcasts ($0.7 billion), lower ad revenues in certain television businesses ($0.4 billion), lower film revenues ($0.3 billion), primarily from lower DVD sales, and the absence of a current-year counterpart to the sale of four television stations in 2006 ($0.2 billion) were partially offset by higher revenues in television studio and distribution ($0.2 billion) and cable ($0.1 billion). Segment profit increased 5%, or $0.1 billion, as improvements in television studio and distribution ($0.2 billion), cable ($0.1 billion) and the absence of Olympic broadcasts in 2007 ($0.1 billion) were partially offset by the lack of a current-year counterpart to last year’s station sales ($0.2 billion) and the effects of lower ad revenues ($0.1 billion).

Industrial

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007		2006
Revenues	$	6,229	$	6,256	$	18,285	$	18,696
Segment profit	$	513	$	485	$	1,365	$	1,307
Revenues
Consumer & Industrial	$	3,323	$	3,421	$	9,825	$	10,586
Enterprise Solutions (a)		2,656		2,577		7,662		7,399
Segment profit
Consumer & Industrial	$	251	$	235	$	784	$	720
Enterprise Solutions (a)		287		238		640		576

(a) During the third quarter of 2007, we began reporting a new sub-segment business, Enterprise Solutions, comprising Security, Sensing & Inspection, Fanuc, Digital Energy and, on an after-tax basis, certain Equipment Services’ businesses.

Industrial revenues were about the same as in the third quarter of 2006, as lower volume ($0.1 billion) was partially offset by the weaker U.S. dollar ($0.1 billion) at the industrial businesses in the segment. The decrease in volume was primarily at Consumer & Industrial reflecting the sale of GE Supply in the third quarter of 2006, partially offset by increases in volume at Enterprise Solutions.

Segment profit of $0.5 billion was 6% higher in the third quarter of 2007, as productivity ($0.1 billion), primarily at Consumer & Industrial, more than offset higher material and other costs ($0.1 billion), primarily at Consumer & Industrial.

(27)

Industrial revenues decreased 2% for the nine months ended September 30, 2007, as lower volume ($0.7 billion) was partially offset by the weaker U.S. dollar ($0.2 billion) and higher prices ($0.1 billion) at the industrial businesses in the segment. Volume decreases were primarily at Consumer & Industrial, reflecting the sale of GE Supply in the third quarter of 2006. The effects of the weaker U.S. dollar and price increases were primarily at Consumer & Industrial.

Segment profit rose 4% for the nine months ended September 30, 2007, as productivity ($0.3 billion) and higher prices ($0.1 billion), primarily at Consumer & Industrial, were substantially offset by higher material and other costs ($0.3 billion), primarily at Consumer & Industrial.

Discontinued Operations

	Three months ended September 30				Nine months ended September 30
(In millions)	2007		2006		2007			2006
Earnings (loss) from discontinued
operations, net of taxes	$	453	$	117	$	(135	)	$	866

Discontinued operations comprise Lake; WMC; Plastics; Advanced Materials; the property and casualty insurance and reinsurance businesses and the European life and health operations of GE Insurance Solutions and most of its affiliates; GE Life, our U.K.-based life insurance operation; and Genworth, our formerly wholly-owned subsidiary that conducted most of our consumer insurance business, including life and mortgage insurance operations. Results of these businesses are reported as discontinued operations for all periods presented.

In August 2007, we completed the sale of our Plastics business to Saudi Basic Industries Corporation for $11.6 billion in cash. As a result, we recognized an after-tax gain of $1.7 billion during the third quarter of 2007. This was partially offset by the estimated loss on the planned sales of Lake and WMC ($0.9 billion) and loss on operations at Lake and WMC ($0.4 billion).

Loss from discontinued operations, net of taxes, for the first nine months of 2007 reflected the loss on operations at Lake and WMC ($1.1 billion) and the estimated loss on the planned sales of Lake and WMC ($0.9 billion). This was partially offset by $1.6 billion of gains on sale, substantially all related to Plastics, and $0.3 billion of earnings from Plastics operations prior to its sale.

Earnings from discontinued operations, net of taxes, for the third quarter of 2006 primarily reflected earnings from operations at our Plastics and Advanced Materials businesses.

Earnings from discontinued operations, net of taxes, for the first nine months of 2006 reflected earnings from operations at our Plastics and Advanced Materials businesses ($0.4 billion). Also included in these earnings were the earnings from operations at GE Insurance Solutions ($0.3 billion), and Lake and WMC ($0.3 billion); and gain on sale of our remaining 18% investment in Genworth ($0.2 billion), partially offset by the provision for estimated loss on sale of GE Life ($0.3 billion).

For additional information related to discontinued operations, see note 3.

(28)

Corporate items and eliminations revenues in the third quarter of 2007 decreased $0.1 billion as lower business disposition gains ($0.2 billion) were partially offset by the lack of a current-year counterpart to the GECS commercial paper interest rate swap adjustment in 2006 ($0.2 billion). Corporate items and eliminations cost for the third quarter of 2007 increased $0.2 billion as higher restructuring, rationalization and other charges ($0.6 billion) including higher charges for environmental matters ($0.2 billion), and lower business disposition gains ($0.2 billion) were partially offset by a decrease in the tax provision at GECS ($0.3 billion) and the lack of a current-year counterpart to the GECS commercial paper interest rate swap adjustment in 2006 ($0.1 billion) (GECS amounts on an after-tax basis).

Corporate items and eliminations revenues for the first nine months of 2007 increased $1.3 billion as a gain on sale of common stock in Swiss Re ($0.6 billion), higher business disposition gains ($0.5 billion) and higher revenues of insurance activities ($0.3 billion) were partially offset by the lack of a current-year counterpart to the GECS commercial paper interest rate swap adjustment in 2006 ($0.2 billion). Corporate items and eliminations cost for the first nine months of 2007 increased $0.3 billion as higher restructuring, rationalization and other charges ($1.3 billion) including higher charges for environmental matters ($0.2 billion), and the lack of a current-year counterpart to the GECS commercial paper interest rate swap adjustment in 2006 ($0.1 billion) were partially offset by higher business disposition gains ($0.5 billion), a gain on sale of common stock in Swiss Re ($0.3 billion on an after-tax basis) and a decrease in the tax provision at GECS ($0.1 billion) (GECS amounts on an after-tax basis).

Certain amounts included in this caption are not allocated to GE operating segments because they are excluded from the measurement of their operating performance for internal purposes. In the third quarter of 2007 these comprised $0.2 billion at Industrial and $0.1 billion at each of Healthcare, Infrastructure and NBC Universal, primarily for restructuring, rationalization and other charges, including technology and product development costs at NBC Universal. For the first nine months of 2007 such amounts comprised $0.9 billion for a gain on sale of a business interest to Hitachi by the Energy business at Infrastructure; $0.5 billion at Industrial, $0.3 billion at each of NBC Universal, Healthcare and Infrastructure, and $0.1 billion at each of GE Money and Commercial Finance, primarily for restructuring, rationalization and other charges, including $0.1 billion of product quality issues at Industrial and $0.1 billion for technology and product development costs at NBC Universal. GECS amounts are on an after-tax basis.

B. Statement of Financial Position

Overview of Financial Position

Changes in our financial position resulted from the following:

·   During the third quarter of 2007, we have separately reported the assets and liabilities of Lake and WMC as discontinued operations for all periods presented.

·   During the third quarter of 2007, we completed the sale of our Plastics business.

·   During the first nine months of 2007, we completed the acquisitions of Smiths Aerospace Group Ltd.; Vetco Gray; Sanyo Electric Credit Co., Ltd.; DISKO and ASL, the leasing businesses of KG Allgemeine Leasing GmbH & Co.; Trustreet Properties, Inc.; Dundee REIT; Crow Holdings; and a controlling interest in Regency Energy Partners LP.

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·   The U.S. dollar was weaker at September 30, 2007, than at December 31, 2006, increasing the translated levels of our non-U.S. dollar assets and liabilities.

Consolidated assets were $761.7 billion at September 30, 2007, an increase of $65.2 billion from December 31, 2006. GE assets increased $9.9 billion, while financial services assets increased $54.8 billion.

GE assets were $205.0 billion at September 30, 2007, a $9.9 billion increase from December 31, 2006. The increase primarily reflects a $6.9 billion increase in intangible assets - net and an increase of $3.3 billion in inventories.

Financial services assets were $619.5 billion at September 30, 2007. The $54.8 billion increase from December 31, 2006, was primarily attributable to an increase of $33.1 billion in financing receivables - net and an increase in all other assets of $20.1 billion.

Consolidated liabilities of $641.4 billion at September 30, 2007, were $64.2 billion higher than the year-end 2006 balance. GE liabilities increased $8.3 billion, while financial services liabilities increased $53.4 billion.

GE liabilities were $86.0 billion at September 30, 2007. During 2007, all other liabilities increased $7.7 billion to $33.4 billion and total borrowings increased $1.5 billion to $12.6 billion ($3.5 billion short term and $9.1 billion long term) at September 30, 2007, compared with December 31, 2006. The ratio of borrowings to total capital invested for GE at the end of the third quarter of 2007 was 9.6% compared with 8.7% at the end of last year and 8.9% at September 30, 2006.

Financial services liabilities increased $53.4 billion to $562.0 billion primarily reflecting an increase in total borrowings of $54.7 billion from year-end 2006.

Consolidated cash and equivalents were $19.8 billion at September 30, 2007, an increase of $5.7 billion during the first nine months of 2007. Cash and equivalents amounted to $13.6 billion at September 30, 2006, an increase of $4.9 billion from December 31, 2005. GE cash from operating activities (CFOA) is a useful measure of performance for our non-financial services businesses and totaled $16.7 billion in the first nine months of 2007 and $17.7 billion in the first nine months of 2006.

With respect to GE CFOA, we believe that it is useful to supplement our GE Condensed Statement of Cash Flows and to examine in a broader context the business activities that provide and require cash.

	Nine months ended September 30
(In billions)	2007			2006
Operating cash collections	$	73.3		$	65.8
Operating cash payments		(62.5	)		(56.8	)
Cash dividends from GECS		5.9			8.7
GE cash from operating activities	$	16.7		$	17.7

(30)

The most significant source of cash in CFOA is customer-related activities, the largest of which is collecting cash following a product or services sale. GE operating cash collections increased by $7.5 billion during the first nine months of 2007. This increase is consistent with the changes in comparable GE operating segment revenues. Analyses of operating segment revenues discussed in the preceding Segment Operations section is the best way of understanding their customer-related CFOA.

The most significant operating use of cash is to pay our suppliers, employees, tax authorities and others for the wide range of materials and services necessary in a diversified global organization. GE operating cash payments increased in the first nine months of 2007 by 5.7 billion, comparable to the increases in GE total costs and expenses.

Dividends from GECS represented distribution of a portion of GECS retained earnings, including proceeds from certain business sales, and are distinct from cash from continuing operating activities within the financial services businesses, which increased in the first nine months of 2007 by $0.7 billion to $15.0 billion. The amount we show in CFOA is the total dividend, including the normal dividend as well as any special dividends from excess capital, primarily resulting from GECS business sales. Special dividends of $2.7 billion were paid by GECS to GE in the first nine months of 2007, compared with $5.7 billion during the first nine months of 2006.

Based on past performance and current expectations, in combination with the financial flexibility that comes with a strong balance sheet and the highest credit ratings, we believe that we are in a sound position to grow dividends, continue to execute our announced $27 billion share repurchase program and to continue making selective investments for long-term growth.

C. Financial Services Portfolio Quality

Investment securities comprise mainly investment-grade debt securities supporting obligations to annuitants and policyholders. We regularly review investment securities for impairment based on criteria that include the extent to which cost exceeds market value, the duration of that market decline, our intent and ability to hold to recovery and the financial health and specific prospects for the issuer. Of securities with unrealized losses at September 30, 2007, an insignificant amount was at risk of being charged to earnings in the next 12 months. Impairment losses were $0.1 billion for the first nine months of 2007, the same as 2006. Investments in retained interests decreased by $0.1 billion in the first nine months of 2007 reflecting declines in fair value accounted for in accordance with a new accounting standard, Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) 155, Accounting for Certain Hybrid Financial Instruments, that became effective at the beginning of 2007.

Financing receivables is our largest category of assets and represents one of our primary sources of revenues. The portfolio of financing receivables, before allowance for losses, was $365.6 billion at September 30, 2007, and $332.6 billion at December 31, 2006. The related allowance for losses was $4.0 billion at both September 30, 2007, and December 31, 2006, representing our best estimate of probable losses in the portfolio. A discussion of the quality of certain elements of the financing receivables portfolio follows. For purposes of that discussion, “delinquent” receivables are those that are 30 days or more past due; and “nonearning” receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful).

(31)

Financing receivables, before allowance for losses, increased $33.0 billion from December 31, 2006, primarily as a result of core growth ($50.1 billion), acquisitions ($10.7 billion) and the weaker U.S. dollar ($10.0 billion), partially offset by securitization and sales ($35.2 billion) and loans transferred to assets held for sale ($3.7 billion). Related nonearning receivables were $5.0 billion (1.4% of outstanding receivables) at September 30, 2007, compared with $4.8 billion (1.5% of outstanding receivables) at year-end 2006. Nonearning receivables excludes loans held for sale.

Delinquency rates on managed Commercial Finance equipment loans and leases and managed GE Money financing receivables follow.

	Delinquency rates at
	9/30/07		(a)	12/31/06		9/30/06
Commercial Finance	1.35	%		1.22	%	1.33	%
GE Money	5.24			5.21		5.33

(a) Subject to update.

Stable delinquency rates at Commercial Finance over the periods reflected continued stable portfolio quality.

Delinquency rates at GE Money increased from December 31, 2006, to September 30, 2007, primarily as a result of higher delinquencies in our U.S. portfolio. The decrease from September 30, 2006, to September 30, 2007, primarily reflected continued improvement in portfolio quality in our U.K. businesses, partially offset by higher delinquencies in our U.S. portfolio.

D. Debt Instruments

During the first nine months of 2007, GECS and GECS affiliates issued $72 billion of senior, unsecured long-term debt and $3 billion of subordinated, unsecured long-term debt. This debt was both fixed and floating rate and was issued to institutional and retail investors in the U.S. and 16 other global markets. Maturities for these issuances ranged from one to 60 years. We used the proceeds primarily for repayment of maturing long-term debt, but also to fund acquisitions and organic growth. We anticipate that we will issue approximately $15 billion of additional long-term debt during the remainder of 2007, mostly to repay maturing long-term debt. The ultimate amount we issue will depend on our needs and on the markets.

E. New Accounting Standard

We are required to adopt SFAS 157, Fair Value Measurements, on January 1, 2008. This standard establishes a new definition of fair value and provides a measurement framework that prioritizes market (observable) inputs, or assumptions based on hypothetical transactions in the absence of market inputs, over other sources of information relevant to determining fair value. The standard applies prospectively to new fair value measurements performed in reporting periods subsequent to the effective date.

We are evaluating the application of the standard for assets and liabilities that require fair value measurements. We are considering recent developments relevant to the standard’s application, including implementation issues being considered by the FASB’s recently formed valuation resource group and recent discussions by the FASB relating to the possible deferral of its effective date.

(32)

Item 4. Controls and Procedures

Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and concluded that our disclosure controls and procedures were effective as of September 30, 2007.

Except as described in Part II, Item 1 “Legal Proceedings,” there were no changes in our internal control over financial reporting during the period ended September 30, 2007, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

As we have previously reported, since January 2005, the SEC staff has been conducting an investigation of the use of hedge accounting for derivatives by us and General Electric Capital Corporation (GE Capital). Also as previously reported, the SEC requested information in connection with this investigation about other GE accounting policies and practices, including items related to revenue recognition. We are continuing to review our revenue recognition policies and procedures in cooperation with the previously reported investigation by the SEC.

We reported in a Form 8-K filed October 12, 2007 that we had identified certain incorrect revenue recognition procedures and practices. We have concluded that these procedures and practices resulted in revenue being recorded in incorrect periods.

·   For certain product sales, principally in our Healthcare, Infrastructure and Industrial segments, we recorded revenues upon shipment before risk of loss from in-transit damage had been transferred to the customer. In connection with such product sales, we failed to appropriately assess the accounting for transit risk of loss and transit insurance issues and to implement and monitor procedures to provide assurance that contract terms and customer accommodation practices complied with our revenue recognition policies.

·   In our Aviation business, for certain long-term agreements that provide for product repair and maintenance services on GE-manufactured aircraft engines, our accounting was incorrect with respect to the timing and amount of credits for certain used parts that were refurbished and reused or resold. Our associated routines and controls failed to prevent or detect these errors.

To assist in understanding the effects of the adjustments relating to these matters, which we determined were immaterial, we provided summary adjusted data in our report on Form 8-K filed on October 12, 2007, and we are providing additional summary adjusted data for each of the fiscal quarters of 2005 in section C. of Exhibit 99 to this Form 10-Q. We also have reflected the adjustments for these items in prior-period financial information reported in this Form 10-Q, and will reflect appropriate adjustments for these items in the prior-period financial information reported in our 2007 annual report on Form 10-K.

We have reviewed our internal control over financial reporting with respect to these matters and have concluded the internal control deficiencies described above constitute significant deficiencies in our internal control over financial reporting, but do not (individually or in the aggregate) constitute a material weakness in the Company’s internal control.

(33)

We have already initiated a number of remedial actions and internal control enhancements and we are continuing to evaluate our internal control over financial reporting with respect to our revenue recognition policies and procedures. During the period ended September 30, 2007, we revised our accounting procedures for the matters discussed above. In addition, we are in the process of upgrading our resources in corporate accounting devoted to reviewing complex revenue recognition matters, and enhancing the procedures of our corporate accounting and internal audit departments for review of accounting for unusual transactions. We also are in the process of implementing changes to enhance and clarify our global accounting guidelines for revenue recognition and our related training programs, and to strengthen the procedures and increase the resources of our internal audit department.

Our internal review and the SEC investigation are continuing and we will address any additional issues as may be appropriate. Our management and audit committee continue to monitor the review closely, with the assistance of outside experts, and to discuss any issues that arise with the SEC staff as appropriate as part of our ongoing cooperation with the SEC investigation.

As previously disclosed, in August 2006, the New Jersey Department of Environmental Protections (DEP) issued an Administrative Order seeking a penalty of $142,000 for violations of the Clean Air Act at GECC’s Linden, New Jersey facility. The DEP alleged that emissions from the facility exceeded thresholds established in the site’s permit. GECC requested a hearing to contest the fine, and DEP offered to settle the matter for 50% of the proposed penalty. GECC agreed to this proposal and settled the matter on August 3, 2007, for a penalty of $71,000.

Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Period(a)	Total number of shares purchased(b)		Average price paid per share		Total number of shares purchased as part of our share repurchase program(c)		Approximate dollar value of shares that may yet be purchased under our share repurchase program
(Shares in thousands)
2007
July		45,300		$39.49		41,422
August		47,875		$38.58		47,097
September		77,775		$39.85		71,911
Total		170,950		$39.40		160,430		$5.4 billion

(a)	Information is presented on a fiscal calendar basis, consistent with our quarterly financial reporting.
(b)	This category includes 10,520 thousand shares repurchased from our various benefit plans, primarily the GE Savings and Security Program (the S&SP). Through the S&SP, a defined contribution plan with Internal Revenue Service Code 401(k) features, we repurchase shares resulting from changes in investment options by plan participants.
(c)	This balance represents the number of shares that were repurchased through the 2004 GE Share Repurchase Program as modified by the GE Board in November 2005 and July 2007 (the Program) under which we are authorized to repurchase up to $27 billion of our common stock through 2008. The Program is flexible and shares are acquired with a combination of borrowings and free cash flow from the public markets and other sources, including GE Stock Direct, a stock purchase plan that is available to the public. As major acquisitions or other circumstances warrant, we modify the frequency and amount of share repurchases under the Program.

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Item 6. Exhibits

Exhibit 11	Computation of Per Share Earnings*.
Exhibit 12	Computation of Ratio of Earnings to Fixed Charges.
Exhibit 31(a)	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended.
Exhibit 31(b)	Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended.
Exhibit 32	Certification Pursuant to 18 U.S.C. Section 1350.
Exhibit 99	Supplemental Financial Information
	*	Data required by Statement of Financial Accounting Standards No. 128, Earnings per Share, is provided in note 7 to the condensed, consolidated financial statements in this report.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	General Electric Company (Registrant)
November 2, 2007	/s/ Philip D. Ameen
Date	Philip D. Ameen Vice President and Comptroller Duly Authorized Officer and Principal Accounting Officer

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