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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file
number 811-01494
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GENERAL ELECTRIC S&S PROGRAM MUTUAL FUND
- ------------------------------------------------------------------
(Exact name of registrant as specified in charter)
3001, SUMMER STREET,STAMFORD, CONNECTICUT, 06905
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(Address of principal executive offices) (Zip code)
GE ASSET MANAGEMENT INC,3001, SUMMER STREET,STAMFORD,CONNECTICUT, 06905
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(Name and address of agent for service)
Registrant"s telephone number, including area code: 800-242-0134
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Date of fiscal year end: 12/31
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Date of reporting period: : 12/31/04
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<page>
ITEM 1. REPORTS TO STOCKHOLDERS.
S&S FUNDS
Program Mutual Fund
Income Fund
Annual Report
December 31, 2004
[GE logo omitted]
Contents
MANAGER REVIEWS AND SCHEDULES OF INVESTMENTS
PROGRAM MUTUAL FUND ............................................... 1
INCOME FUND ....................................................... 8
NOTES TO PERFORMANCE ................................................. 24
NOTES TO SCHEDULES OF INVESTMENTS .................................... 25
FINANCIAL STATEMENTS
Financial Highlights .............................................. 26
Statements of Assets and Liabilities .............................. 28
Statements of Operations .......................................... 29
Statements of Changes in Net Assets ............................... 30
Notes to Financial Statements ..................................... 31
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM .............. 37
TAX INFORMATION ...................................................... 38
ADDITIONAL INFORMATION ..............................;................ 39
INVESTMENT TEAM .......................................................42
GE S&S Program Mutual Fund
Q&A
DAVID CARLSON IS A DIRECTOR AND EXECUTIVE VICE PRESIDENT WITH GE ASSET
MANAGEMENT RESPONSIBLE FOR MANAGING THE OVERALL U.S. EQUITY INVESTMENTS. HE
JOINED GE IN 1980 AS PART OF THE GE FINANCIAL MANAGEMENT PROGRAM. DAVE IS A
TRUSTEE OF THE GE PENSION TRUST, GE CANADA PENSION TRUST AND GE'S EMPLOYEE
SAVINGS PLAN AS WELL AS CHAIRMAN OF GEAM'S ASSET ALLOCATION COMMITTEE. HE IS
ALSO A CHARTERED FINANCIAL ANALYST AND A MEMBER OF THE NEW YORK SOCIETY OF
SECURITY ANALYSTS. DAVE IS A GRADUATE OF INDIANA UNIVERSITY WITH A BS IN
FINANCE.
Q. HOW DID THE S&S PROGRAM MUTUAL FUND PERFORM COMPARED TO ITS BENCHMARK AND
LIPPER PEER GROUP FOR THE TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2004?
A. For the twelve-month period ended December 31, 2004, the S&S Program Mutual
Fund posted an increase of 8.50%. The S&P 500 benchmark advanced 10.88% and
the Fund's Lipper peer group of 1,852 Large Cap Core funds returned an
average of 7.78% for the same period.
Q. WHY DID THE FUND UNDERPERFORM ITS BENCHMARK FOR THE TWELVE-MONTH PERIOD
ENDED DECEMBER 31, 2004?
A. The primary sectors that detracted from performance included Financials and
Information Technology. A slight sector overweight and sluggish stock
selection in the Financials and Information Technology sectors explain
relative underperformance.
Q. WHICH STOCKS HAVE PERFORMED WELL OVER THE TWELVE-MONTH PERIOD ENDED
DECEMBER 31, 2004?
A. Energy stocks helped performance the most over the period. Oil prices
remained elevated relative to expectations over the period and earnings
estimates rose for many energy companies. Oil and gas companies such as
Burlington Resources (+59%), ConocoPhillips (+36%), Exxon Mobil (+28%),
EnCana Corp (+46%), BP PLC (+21%), and Devon Energy (+37%) all helped
performance. Energy equipment & services stocks advanced almost 26% over
the period and our holdings in Schlumberger (+24%), Nabors (+24%), and
Baker Hughes (+34%) helped performance as well.
1
GE S&S Program Mutual Fund
Q&A
Q. WHICH STOCKS HAVE NOT PERFORMED WELL OVER THE TWELVE-MONTH PERIOD ENDED
DECEMBER 31, 2004?
A. Financials, Information Technology, and Utilities were the main drivers to
underperformance for the year. In Financials, our overweight position
sector and stock selection hurt performance. Fannie Mae (-2%) was under
pressure all year due to alleged accounting irregularities related to
derivative accounting. Marsh & McLennan (-30%) and AIG (-.5%) declined over
an investigation concerning bid rigging in the insurance brokerage
businesses of these large insurance companies. State Street (-4%), a core
holding, declined over lackluster earnings while many of its peers posted
better than anticipated results. Citigroup (+3%), another core holding,
also lagged peers in its group as issues with its trust business in Japan
fueled negative headlines for the company. In addition, rising interest
rates muted investors appetite for the group as the year progressed.
Information Technology had a lackluster year posting only a 2.6% advance,
just ahead of the worst performing sector Healthcare with an advance of
1.9%. Investors struggled all year with this group as capital spending
lagged expectations. The smaller technology companies garnered most of the
price appreciation over the year. Our holdings in software including Intuit
(-17%) and BMC Software (-.3%) struggled versus peers such as Autodesk
(+210%), Adobe (+61%), and Symantec (+50%), which we did not own in the
portfolio. Communications equipment also hurt performance as our only
holding, Cisco (-20%), underperformed its smaller peers such as Lucent
(+33%) and Avaya (+33%).
Q. WHAT MARKET CONDITIONS IMPACTED FUND PERFORMANCE?
A. Over the past year, many of the stocks that helped fuel gains in the market
were on average smaller in market capitalization, had higher expected
growth rates, and were more expensive in terms of price to earnings ratio.
Companies losing money posted some of the best returns over the period.
This trend was evident starting in the second quarter of 2003 as the market
began to rally after the Iraq War was declared over. Interestingly,
investor's penchant for investing in these stocks created a "quality"
schism in the market. This trend was challenging in 2003 and persisted into
2004. We remain focused on the higher quality, larger capitalization stocks
when investing for this strategy.
2
GE S&S Program Mutual Fund
Understanding Your Fund's Expenses
As a shareholder of the Fund you incur transaction and ongoing expenses.
Transaction expenses including sales charges on purchase payments, reinvested
dividends (or other distributions), and redemption fees directly reduce the
investment return of the Fund. Ongoing costs include portfolio management fees,
distribution and service fees, professional fees, administrative fees and other
Fund expenses. The following example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class of the Fund during the
period. The information in the following table is based on an investment of
$1,000, which is invested at the beginning of the period and held for the entire
six-month period ended December 31, 2004.
ACTUAL EXPENSES
The first section of the table provides information about actual account values
and actual expenses. You may use the information in this section, together with
the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your class under the heading "Expenses Paid During Period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholders
reports of other funds.
Please note that the expenses shown in the table do not reflect any transaction
costs, such as sales charges or redemption fees.
JULY 1, 2004 - DECEMBER 31, 2004
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ACCOUNT VALUE AT ACCOUNT VALUE EXPENSES
THE BEGINNING OF AT THE END OF PAID DURING
THE PERIOD ($) THE PERIOD ($) THE PERIOD ($)*
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Actual Fund Return** 1,000.00 1,062.72 0.60
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Hypothetical 5% Return
(2.5% for the period) 1,000.00 1,024.23 0.61
- ------------------------------------------------------------------------------------------------------------------------------------
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 0.12% (FROM
PERIOD JULY 1, 2004 - DECEMBER 31, 2004), MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY 184/366 (TO REFLECT THE SIX-MONTH
PERIOD).
** ACTUAL FUND RETURN FOR SIX-MONTH PERIOD ENDED DECEMBER 31, 2004 WAS 6.27%.
3
GE S&S Program Mutual Fund
CHANGE IN VALUE OF A $10,000 INVESTMENT
[Line chart omitted--plot points are as follows:]
GE S&S Program Mutual Fund S & P 500 Index
12/94 10,000 10,000
12/95 13,677 13,749
12/96 16,829 16,927
12/97 22,396 22,563
12/98 27,721 29,038
12/99 33,193 35,155
12/00 33,214 31,927
12/01 30,313 28,124
12/02 24,582 21,908
12/03 30,424 28,202
12/04 33,011 31,270
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2004
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ONE FIVE TEN
YEAR YEAR YEAR
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GE S&S Program
Mutual Fund 8.50% (0.11%) 12.68%
S&P 500 Index 10.88% (2.31%) 12.08%
INVESTMENT PROFILE
A fund designed for investors who seek long-term growth of capital and income by
investing primarily in a diversified portfolio of equity securities of U.S.
companies.
- --------------------------------------------------------------------------------
*LIPPER PERFORMANCE COMPARISON
BASED ON AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 12/31/04
LARGE CAP CORE PEER GROUP
ONE FIVE TEN
YEAR YEAR YEAR
Fund's rank in peer group: ..................... 821 181 35
Number of Funds in peer group: ................. 1,852 1,212 442
Peer group average annual total return: ........ 7.78% (3.45%) 9.98%
Lipper categories in peer group: ............... LARGE CAP CORE
* SEE NOTES TO PERFORMANCE FOR EXPLANATION OF PEER CATEGORIES.
TOP TEN HOLDINGS
AS OF DECEMBER 31, 2004
AS A % OF MARKET VALUE
- ------------------------------------------
Exxon Mobil Corp. 3.79%
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Citigroup Inc. 3.66%
- ------------------------------------------
Pfizer Inc. 3.30%
- ------------------------------------------
Microsoft Corp. 3.15%
- ------------------------------------------
American International
Group Inc. 2.62%
- ------------------------------------------
Bank of America Corp. 2.44%
- ------------------------------------------
Johnson & Johnson 2.31%
- ------------------------------------------
PepsiCo Inc. 2.29%
- ------------------------------------------
First Data Corp. 2.20%
- ------------------------------------------
Abbott Laboratories 2.19%
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SEE NOTES TO PERFORMANCE ON PAGE 24 FOR FURTHER INFORMATION, INCLUDING AN
EXPLANATION OF LIPPER PEER CATEGORIES. PAST PERFORMANCE DOES NOT PREDICT FUTURE
PERFORMANCE AND THE GRAPH AND TABLE DO NOT REFLECT THE DEDUCTION OF TAXES.
4
GE S&S PROGRAM MUTUAL FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
GE S&S PROGRAM MUTUAL FUND
PORTFOLIO COMPOSITION AS A % OF THE MARKET VALUE OF $4,177,024 AS OF DECEMBER
31, 2004.
[Pie chart omitted--plot points are as follows:]
Financials 21.2%
Information Technology 15.8%
Health Care 12.9%
Consumer Discretionary 12.5%
Consumer Staples 9.8%
Industrials 9.5%
Energy 7.5%
Materials 3.4%
Telecommunication Services 3.2%
Utilities 2.4%
Short-Term Investments 1.8%
NUMBER
OF SHARES VALUE
COMMON STOCK -- 98.8%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 12.5%
Carnival Corp. ............. 752,098 $ 43,343
Comcast Corp. (Class A) .... 75,045 2,497 (a)
Comcast Corp. (Class A)
(Special) ............... 2,140,306 70,288 (a,j)
eBay Inc. .................. 80,230 9,329 (a)
Family Dollar Stores Inc. .. 369,174 11,529 (j)
Harley-Davidson Inc. ....... 76,589 4,653
Home Depot Inc. ............ 910,798 38,927
Liberty Media Corp.
(Series A) .............. 7,247,052 79,573 (a)
Liberty Media International Inc.
(Series A) .............. 355,444 16,432 (a,j)
Lowe's Cos. Inc. ........... 614,719 35,402
News Corp. (Class A) ....... 689,998 12,875
Omnicom Group .............. 291,524 24,581
Target Corp. ............... 1,285,122 66,736
Time Warner Inc. ........... 1,641,506 31,911 (a)
Tribune Co. ................ 413,999 17,446
Viacom Inc. (Class B) ...... 1,512,821 55,052
520,574
NUMBER
OF SHARES VALUE
CONSUMER STAPLES -- 9.8%
Altria Group Inc. .......... 56,284 $ 3,439
Anheuser-Busch Cos. Inc. ... 489,899 24,853
Avon Products Inc. ......... 93,627 3,623
Clorox Co. ................. 868,708 51,193
Colgate-Palmolive Co. ...... 869,398 44,478
HJ Heinz Co. ............... 230,347 8,981
Kellogg Co. ................ 508,334 22,702
Kimberly-Clark Corp. ....... 717,598 47,225
PepsiCo Inc. ............... 1,833,326 95,700
Procter & Gamble Co. ....... 639,286 35,212
Sara Lee Corp. ............. 931,498 22,486
Wal-Mart Stores Inc. ....... 903,484 47,722
407,614
ENERGY -- 7.6%
Burlington Resources Inc. .. 1,070,670 46,574
ConocoPhillips Co. ......... 227,699 19,771
EnCana Corp. ............... 313,949 17,914
Exxon Mobil Corp. .......... 3,086,431 158,210
Nabors Industries Ltd. ..... 312,638 16,035 (a)
Occidental Petroleum Corp. . 80,149 4,677
Schlumberger Ltd. .......... 780,595 52,261
315,442
FINANCIALS -- 21.3%
AFLAC Inc. ................. 236,949 9,440
Allstate Corp. ............. 830,758 42,967
American Express Co. ....... 245,161 13,820
American International
Group Inc. .............. 1,665,518 109,375
Bank of America Corp. ...... 2,168,664 101,905
Berkshire Hathaway Inc.
(Class B) ............... 7,010 20,581 (a)
Chubb Corp. ................ 153,870 11,833
Citigroup Inc. ............. 3,176,890 153,063
Federal Home Loan
Mortgage Corp. .......... 220,479 16,249
Federal National Mortgage
Assoc. .................. 1,101,099 78,409
Hartford Financial Services
Group Inc. .............. 186,299 12,912 (j)
HCC Insurance Holdings Inc. 188,034 6,228 (j)
JP Morgan Chase & Co. ...... 716,977 27,969
Marsh & McLennan Cos. Inc. . 138,008 4,540
MBNA Corp. ................. 600,298 16,922
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
5
GE S&S PROGRAM MUTUAL FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
NUMBER
OF SHARES VALUE
Mellon Financial Corp. ..... 946,678 $ 29,451
Merrill Lynch & Co. Inc. ... 313,949 18,765
Morgan Stanley ............. 758,998 42,140
Principal Financial Group .. 438,241 17,942
Prudential Financial Inc. .. 258,749 14,221
SLM Corp. .................. 104,752 5,593
State Street Corp. ......... 1,582,858 77,750 (e)
US Bancorp ................. 365,664 11,453
Wachovia Corp. ............. 376,118 19,784
Wells Fargo & Co. .......... 367,424 22,835
886,147
HEALTHCARE -- 13.0%
Abbott Laboratories ........ 1,965,322 91,682
Amgen Inc. ................. 209,069 13,412 (a)
Cardinal Health Inc. ....... 203,549 11,836 (j)
DENTSPLY International Inc. 76,940 4,324
GlaxoSmithKline PLC. ADR ... 500,308 23,710
HCA Inc. ................... 362,249 14,475
Johnson & Johnson .......... 1,522,895 96,582
Lincare Holdings Inc. ...... 707,248 30,164 (a)
Medtronic Inc. ............. 125,415 6,229
Merck & Co. Inc. ........... 381,829 12,272
Pfizer Inc. ................ 5,121,788 137,725
Smith & Nephew PLC. ADR .... 62,537 3,237
UnitedHealth Group Inc. .... 368,597 32,448
Wyeth ...................... 1,431,195 60,955
539,051
INDUSTRIALS -- 9.6%
Burlington Northern
Santa Fe Corp. .......... 451,949 21,382
Corinthian Colleges Inc. ... 171,977 3,241 (a,j)
Danaher Corp. .............. 444,083 25,495 (j)
Deere & Co. ................ 420,899 31,315
Dover Corp. ................ 986,698 41,382
Eaton Corp. ................ 277,379 20,071
Emerson Electric Co. ....... 125,075 8,768
General Dynamics Corp. ..... 156,975 16,420
Northrop Grumman Corp. ..... 612,373 33,289
Paccar Inc. ................ 100,740 8,108 (j)
Pitney Bowes Inc. .......... 67,228 3,111
Southwest Airlines Co. ..... 793,498 12,918
3M Co. ..................... 314,156 25,783
Tyco International Ltd. .... 1,668,199 59,621
NUMBER
OF SHARES VALUE
Union Pacific Corp. ........ 165,600 $ 11,137
United Technologies Corp. .. 529,988 54,774
Waste Management Inc. ...... 714,148 21,382
........................... 398,197
INFORMATION TECHNOLOGY -- 15.9%
Analog Devices Inc. ........ 822,133 30,353
Applied Materials Inc. ..... 1,021,197 17,462 (a)
Automatic Data Processing Inc. 544,823 24,163
BMC Software Inc. .......... 406,492 7,561 (a)
Certegy Inc. ............... 420,899 14,955 (j)
Checkfree Corp. ............ 128,808 4,905 (a)
Cisco Systems Inc. ......... 2,585,217 49,895 (a)
Dell Inc. .................. 1,063,287 44,807 (a)
EMC Corp. .................. 743,956 11,063 (a)
First Data Corp. ........... 2,164,732 92,088
Intel Corp. ................ 1,925,716 45,042
International Business
Machines Corp. .......... 616,375 60,762
Intuit Inc. ................ 600,299 26,419 (a)
Microsoft Corp. ............ 4,930,038 131,681
Molex Inc. (Class A) ....... 1,102,065 29,370 (j)
Oracle Corp. ............... 3,466,758 47,564 (a)
Paychex Inc. ............... 109,440 3,730
Unisys Corp. ............... 1,052,454 10,714 (a)
Yahoo! Inc. ................ 237,642 8,954 (a)
661,488
MATERIALS -- 3.4%
Alcoa Inc. ................. 470,510 14,783
Barrick Gold Corp. ......... 458,849 11,113 (j)
Freeport-McMoRan Copper &
Gold Inc. (Class B) ..... 327,749 12,530 (j)
Monsanto Co. ............... 196,649 10,924
Neenah Paper Inc. .......... 3,949 129 (a)
Newmont Mining Corp. ....... 517,223 22,970
Praxair Inc. ............... 676,543 29,869
Rohm & Haas Co. ............ 327,749 14,496
Weyerhaeuser Co. ........... 344,999 23,191
140,005
TELECOMMUNICATION SERVICES -- 3.2%
Sprint Corp. ............... 937,708 23,302
Verizon Communications Inc. 689,998 27,952
Vodafone Group PLC. ADR .... 2,996,041 82,032 (j)
........................... 133,286
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
6
GE S&S PROGRAM MUTUAL FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
NUMBER
OF SHARES VALUE
UTILITIES -- 2.5%
Dominion Resources Inc. .... 500,249 $ 33,887
Entergy Corp. .............. 402,959 27,236
Exelon Corp. ............... 241,499 10,643
PG&E Corp. ................. 727,948 24,226 (a)
PPL Corp. .................. 104,543 5,570
101,562
TOTAL INVESTMENTS IN SECURITIES
(COST $3,555,019) ....... 4,103,366
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.8%
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.3%
State Street Bank and Trust Co.
1.32% dated 12/31/04, to be
repurchased at $52,973 on
01/03/05 collateralized by
$54,030 U.S. Treasuries,
1.50%-7.50%, maturing
07/31/05-11/15/16
(COST $52,967) ......... $52,967 52,967 (e)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
State Street Navigator Securities
Lending Prime Portfolio .. 20,690,670 20,691 (e,m)
TOTAL SHORT-TERM INVESTMENTS
(COST $73,658) ........... 73,658
TOTAL INVESTMENTS
(COST $3,628,677) ........ 4,177,024
LIABILITIES IN EXCESS OF OTHER
ASSETS, (0.6)% ........... (22,881)
============
NET ASSETS-- 100.0% ......... $4,154,143
============
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
+ Percentages are based on net assets as of December 31, 2004.
7
GE S&S Income Fund
Q&A
ROBERT MACDOUGALL IS A DIRECTOR AND EXECUTIVE VICE PRESIDENT OF GE ASSET
MANAGEMENT. HE OVERSEES A PORTION OF THE FIXED INCOME INVESTMENTS FOR GE ASSET
MANAGEMENT AND LEADS A TEAM OF PORTFOLIO MANAGERS FOR THE S&S INCOME FUND, WHICH
INCLUDES PAUL M. COLONNA, MARK DELANEY, AND WILLIAM HEALEY.* MR. MACDOUGALL
JOINED GEAM IN 1986 AS VICE PRESIDENT. HE BECAME A SENIOR VICE PRESIDENT IN 1993
AND EXECUTIVE VICE PRESIDENT IN 1997. PRIOR TO JOINING GEAM, BOB HELD A VARIETY
OF FINANCIAL MANAGEMENT POSITIONS WITHIN GE'S CORPORATE TREASURY AND FINANCIAL
PLANNING DEPARTMENTS. BOB RECEIVED BOTH HIS MASTERS AND BACHELORS IN BUSINESS
ADMINISTRATION FROM THE UNIVERSITY OF MASSACHUSETTS.
WILLIAM HEALEY IS A SENIOR VICE PRESIDENT OF GE ASSET MANAGEMENT. HE HAS SERVED
ON THE FUND'S PORTFOLIO MANAGEMENT TEAM SINCE JOINING GE ASSET MANAGEMENT IN
1996. PRIOR TO JOINING GE ASSET MANAGEMENT, MR. HEALEY SPENT OVER 10 YEARS IN
THE FIXED INCOME GROUP AT METLIFE.
MARK DELANEY IS A VICE PRESIDENT FOR GEASSET MANAGEMENT. HE HAS SERVED ON THE
FUND'S PORTFOLIO MANAGEMENT TEAM SINCE JOINING GE ASSET MANAGEMENT IN 2002.
PRIOR TO JOINING GE ASSET MANAGEMENT, MR. DELANEY WAS THE ASSISTANT INVESTMENT
OFFICER FOR FIXED INCOME AT PERS OF OHIO. MARK ALSO WAS A SENIOR FIXED INCOME
PORTFOLIO MANAGER WITH CRITERION INVESTMENT MANAGEMENT COMPANY AND SMITH GRAHAM
AND CO.
PAUL M. COLONNA IS A SENIOR VICE PRESIDENT OF GE ASSET MANAGEMENT. HE HAS SERVED
ON THE FUND'S PORTFOLIO MANAGEMENT TEAM SINCE JOINING GE ASSET MANAGEMENT IN
2000. PRIOR TO JOINING GE ASSET MANAGEMENT, MR. COLONNA WAS A SENIOR PORTFOLIO
MANAGER WITH THE FEDERAL HOME LOAN MORTGAGE CORPORATION, OVERSEEING THE MORTGAGE
INVESTMENT GROUP.
[PHOTO OMITTED]
PICTURED BY ROW FROM LEFT TO RIGHT:
ROBERT MACDOUGALL, WILLIAM HEALEY,
MARK DELANEY AND PAUL M. COLONNA.
*AS OF JANUARY 29, 2005, PAUL M. COLONNA ASSUMED RESPONSIBILITY AS LEAD
PORTFOLIO MANAGER FOR THE FUND.
8
Q&A
Q. HOW DID THE GE S&S INCOME FUND PERFORM RELATIVE TO ITS BENCHMARK AND LIPPER
PEER GROUP FOR THE TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2004?
A. For the twelve-month period ended December 31, 2004, the GE S&S Income Fund
posted a total return of 4.12%, compared to a total return of 4.34% for the
Lehman Brothers Aggregate Bond Index, the Fund's benchmark. The average
return for the Fund's Lipper peer group of 461 Intermediate Investment Grade
Debt funds for the same period was 3.84%.
Q. DESCRIBE WHAT HAPPENED IN THE FIXED INCOME MARKETS DURING THE TWELVE-MONTH
PERIOD ENDING DECEMBER 31, 2004.
A. Twelve months after lowering the federal funds target to a 45-year low of
1%, the Federal Open Market Committee began it's self-described "measured
pace" of removing accommodative policy in June 2004. By year-end, the Fed
had hiked its fed funds target 25 basis points in each of its five meetings
from June through December to 2.25%. The Fed's action helped to flatten the
yield curve by pushing short to intermediate treasury rates up dramatically.
The 2-year Treasury note yield finished the year at 3.07%, up 125 basis
points, while the 5-year note ended 2004 yielding 3.61%, up 36 basis points.
Longer rates, however, moved in the opposite direction reflecting moderate
inflation expectations and generally disappointing employment growth. Ten
and 30-year Treasury yields fell 3 and 25 basis points, respectively to
finish at 4.22% and 4.83%. While strong foreign investor demand supported
Treasury bond prices, a declining US dollar tended to have a negative
impact.
Within the broader fixed income asset classes, corporate securities
performed best led by utility and sovereign issuers. Performance by credit
quality mirrored 2003 with lower rated issuers outperforming in general.
Securitized assets also performed well versus duration-matched treasuries
behind solid fundamentals and low volatility.
Q. WHAT WERE THE PRIMARY DRIVERS OF FUND PERFORMANCE?
A. Fund performance was negatively impacted by duration positioning in the
third quarter. Underperformance of select mortgage-backed securities in the
fourth quarter also detracted from the Fund's total return. Strong relative
performance in BBB-rated securities and a tactical currency trade out of
U.S. dollars into Yen and Euros contributed positively to the Fund's
performance.
Q. DID THE FUND'S SECURITY/SECTOR WEIGHTINGS CHANGE DURING THE LAST QUARTER?
A. The Fund's duration was shortened to below that of the benchmark during the
fourth quarter. The exposure in corporate securities was increased to a near
benchmark weighting. Within the corporate sector, lower rated security
positions were reduced and replaced with higher quality issues. The position
in residential mortgage-backed securities moved from underweight to
overweight relative to the benchmark. The weighting in commercial
mortgage-backed securities was also increased. The increase to these sector
weightings was offset by a reduction in the weighting of U.S. Treasury
securities.
9
GE S&S Income Fund
Understanding Your Fund's Expenses
As a shareholder of the Fund you incur transaction and ongoing expenses.
Transaction expenses including sales charges on purchase payments, reinvested
dividends (or other distributions), and redemption fees directly reduce the
investment return of the Fund. Ongoing costs include portfolio management fees,
distribution and service fees, professional fees, administrative fees and other
Fund expenses. The following example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class of the Fund during the
period. The information in the following table is based on an investment of
$1,000, which is invested at the beginning of the period and held for the entire
six-month period ended December 31, 2004.
ACTUAL EXPENSES
The first section of the table provides information about actual account values
and actual expenses. You may use the information in this section, together with
the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your class under the heading "Expenses Paid During Period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholders
reports of other funds.
Please note that the expenses shown in the table do not reflect any transaction
costs, such as sales charges or redemption fees.
JULY 1, 2004 - DECEMBER 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT ACCOUNT VALUE EXPENSES
THE BEGINNING OF AT THE END OF PAID DURING
THE PERIOD ($) THE PERIOD ($) THE PERIOD ($)*
- ------------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return** 1,000.00 1,038.35 0.67
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical 5% Return
(2.5% for the period) 1,000.00 1,024.19 0.66
- ------------------------------------------------------------------------------------------------------------------------------------
*EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 0.13%,
(FROM PERIOD JULY 1, 2004 - DECEMBER 31, 2004), MULTIPLIED BY THE AVERAGE
ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 184/366 (TO REFLECT THE
SIX-MONTH PERIOD).
**ACTUAL FUND RETURN FOR SIX-MONTH PERIOD ENDED DECEMBER 31, 2004 WAS 3.84%.
10
GE S&S Income Fund
CHANGE IN VALUE OF A $10,000 INVESTMENT
[Line chart omitted--plot points are as follows:]
GE S&S Income Fund LB Aggregate
12/94 10,000 10,000
12/95 11,833 11,847
12/96 12,334 12,278
12/97 13,510 13,463
12/98 14,657 14,632
12/99 14,522 14,512
12/00 16,132 16,199
12/01 17,465 17,567
12/02 19,285 19,368
12/03 20,112 20,163
12/04 20,940 21,038
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
ONE FIVE TEN
YEAR YEAR YEAR
- --------------------------------------------------------------------------------
GE S&S Income Fund 4.12% 7.60% 7.67%
LB Aggregate 4.34% 7.71% 7.72%
INVESTMENT PROFILE
A fund designed for investors who seek a high interest rate of return over a
long-term period consistent with the preservation of capital by investing at
least 80% of its net assets in debt securities under normal market conditions.
The Fund invests primarily in a variety of investment-grade debt securities,
such as U.S. Government securities, mortgage-backed securities, corporate bonds
and money market instruments.
*LIPPER PERFORMANCE COMPARISON
BASED ON AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED 12/31/04
INTERMEDIATE INVESTMENT GRADE DEBT PEER GROUP
ONE FIVE TEN
YEAR YEAR YEAR
Fund's rank in peer group: ............... 184 56 22
Number of Funds in peer group: ........... 461 267 132
Peer group average annual total return: .. 3.84% 6.85% 6.89%
Lipper categories in peer group: ......... INTERMEDIATE INVESTMENT
GRADE DEBT
*SEE NOTES TO PERFORMANCE FOR EXPLANATION OF PEER CATEGORIES.
QUALITY RATINGS AS OF DECEMBER 31, 2004
AS A % OF MARKET VALUE
- --------------------------------------------------------------------------------
MOODY'S/S&P/ PERCENTAGE OF
FITCH RATING+ MARKET VALUE
- --------------------------------------------------------------------------------
Aaa / AAA 79.87%
- --------------------------------------------------------------------------------
Aa / AA 3.30%
- --------------------------------------------------------------------------------
A / A 5.81%
- --------------------------------------------------------------------------------
Baa / BBB 10.54%
- --------------------------------------------------------------------------------
Ba / BB and lower 0.47%
- --------------------------------------------------------------------------------
NR / Other 0.01%
- --------------------------------------------------------------------------------
+ MOODY'S INVESTORS SERVICES, INC., STANDARD & POOR'S AND FITCH ARE
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS.
SEE NOTES TO PERFORMANCE ON PAGE 24 FOR FURTHER INFORMATION, INCLUDING AN
EXPLANATION OF LIPPER PEER CATEGORIES. PAST PERFORMANCE DOES NOT PREDICT FUTURE
PERFORMANCE AND THE GRAPH AND TABLE DO NOT REFLECT THE DEDUCTION OF TAXES.
11
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
GE S&S INCOME FUND
PORTFOLIO COMPOSITION AS A % OF THE MARKET VALUE OF $3,405,898 AS OF DECEMBER
31, 2004.
[Pie chart omitted--plot points are as follows:]
Asset-Backed 46.8%
Corporate Notes 17.9%
Short-Term & Others 16.0%
U.S.Treasuries 12.9%
Federal Agencies 6.4%
PRINCIPAL
AMOUNT VALUE
BONDS AND NOTES -- 110.9%+
- --------------------------------------------------------------------------------
U.S. TREASURIES -- 16.9%
U.S. Treasury Bonds
5.38% 02/15/31 .......... $43,800 $ 47,352(j)
7.13% 02/15/23 .......... 21,760 27,776(h)
7.25% 05/15/16 .......... 6,945 8,695(h)
8.13% 08/15/19 - 08/15/21 58,225 79,881(h)
U.S. Treasury Inflation
Indexed Bonds
2.00% 01/15/14 .......... 14,426 14,934(n)
2.38% 01/15/25 .......... 6,248 6,674(n)
3.88% 04/15/29 .......... 4,412 6,048(n)
4.69% 04/15/10 .......... 17,516 17,343(d,n)
U.S. Treasury Notes
2.88% 11/30/06 .......... 33,565 33,463(j)
3.13% 05/15/07 .......... 71,320 71,285(j)
3.38% 09/15/09 .......... 33,210 32,906(j)
3.50% 12/15/09 .......... 10,000 9,952
4.00% 02/15/14 .......... 630 621(j)
PRINCIPAL
AMOUNT VALUE
4.25% 11/15/13 - 11/15/14 $53,040 $ 53,172(h,j)
5.00% 08/15/11 .......... 27,050 28,797
TOTAL U.S. TREASURIES
(COST $431,096) ........... 438,899
FEDERAL AGENCIES -- 8.3%
Federal Home Loan Bank
2.38% 02/15/06 .......... 49,860 49,471(h)
2.63% 10/16/06 .......... 25,000 24,743(j)
3.75% 08/18/09 .......... 11,000 10,978(j)
Federal Home Loan Mortgage Corp.
3.00% 09/29/06 .......... 25,600 25,418(h)
3.63% 09/15/08 .......... 33,170 33,133(j)
4.50% 01/15/14 .......... 17,580 17,566(h)
4.63% 07/18/07 .......... 14,975 15,125(h)
4.75% 12/08/10 .......... 18,805 18,917(h)
6.75% 03/15/31 .......... 11,905 14,464(h)
Federal National Mortgage Assoc.
6.00% 01/18/12 .......... 7,230 7,240(h)
TOTAL FEDERAL AGENCIES
(COST $215,158) ........... 217,055
AGENCY MORTGAGE BACKED -- 31.4%
Federal Home Loan Mortgage Corp.
5.00% 04/01/13 .......... 5,312 5,404
6.00% 04/01/17 - 05/01/34 12,295 12,725
6.50% 01/01/27 - 11/01/34 11,784 12,345
7.00% 10/01/16 - 08/01/34 4,010 4,249
7.50% 11/01/09 - 09/01/33 4,330 4,571
8.00% 08/01/30 - 11/01/30 35 37
8.50% 04/01/30 - 05/01/30 76 82
9.00% 05/01/16 - 11/01/16 498 553
Federal National Mortgage Assoc.
4.50% 07/01/33 .......... 4,243 4,110
5.50% 01/01/14 - 08/01/33 14,551 15,007
6.00% 02/01/14 - 11/01/34 41,614 43,062
6.50% 01/01/14 - 01/01/35 66,973 70,285
7.00% 08/01/13 - 10/01/34 24,093 25,515
7.50% 12/01/09 - 03/01/34 12,181 13,019
8.00% 12/01/11 - 11/01/33 6,499 6,974
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
12
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
8.50% 04/01/30 - 05/01/31 $ 590 $ 641
9.00% 02/01/09 - 12/01/22 6,490 7,060
5.00% TBA ............... 417,615 417,458(c)
5.50% TBA ............... 51,290 52,059(c)
6.00% TBA ............... 75,550 78,100(c)
Government National
Mortgage Assoc.
3.38% 05/20/21 - 04/20/24 67 67(i)
3.75% 08/20/23 - 09/20/24 48 48(i)
4.50% 08/15/33 - 09/15/34 8,218 8,030
4.63% 11/20/21 - 10/20/25 32 32(i)
6.00% 04/15/33 - 04/15/34 6,475 6,712
6.50% 04/15/19 - 08/15/34 12,473 13,147
7.00% 03/15/12 - 06/15/34 6,673 7,082
7.50% 11/15/22 - 10/15/33 2,467 2,653
8.00% 10/15/29 - 06/15/30 48 52
8.50% 10/15/17 .......... 1,576 1,724
9.00% 11/15/16 - 12/15/21 3,693 4,116
TOTAL AGENCY MORTGAGE BACKED
(COST $813,579) ........... 816,919
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS -- 6.4%
Collateralized Mortgage
Obligation Trust (Class B)
4.17% 11/01/18 .......... 755 656(d,f)
Federal Home Loan
Mortgage Corp.
4.25% 10/15/18 .......... 11,303 1,058(g,i)
4.50% 04/15/13 - 03/15/18 20,292 2,327(g)
4.50% 11/15/19 .......... 3,325 3,167
4.75% 12/15/30 .......... 25,337 2,201(g,i)
5.00% 01/15/11 - 12/01/34 82,877 11,798(g)
5.00% 02/15/34 - 11/15/34 18,175 17,422
5.50% 04/15/17 - 06/15/33 14,947 2,841(g)
5.68% 05/25/43 .......... 7,734 761(g,i)
5.85% 10/15/33 .......... 3,215 2,491(i)
6.25% 01/15/23 .......... 175 175
7.22% 12/15/33 .......... 1,970 1,655(i)
7.50% 01/15/16 .......... 1,273 1,350
7.50% 07/15/27 .......... 159 24(g)
8.00% 04/15/20 .......... 521 525
PRINCIPAL
AMOUNT VALUE
10.45% 06/15/33 .......... $10,055 $ 10,199(i)
16.18% 09/25/43 .......... 46,416 457(d,g,i)
Federal Home Loan Mortgage
Corp. STRIPS
8.00% 02/01/23 - 07/01/24 460 90(g)
Federal Home Loan
Mortgage STRIPS
5.00% 08/01/27 .......... 110 95(d,f)
Federal National Mortgage Assoc.
1.17% 12/25/42 .......... 9,340 296(g,i)
2.22% 06/25/43 .......... 44,315 2,340(g,i)
4.00% 08/25/17 - 02/25/28 33,889 33,470
4.50% 12/25/19 .......... 2,375 2,243
4.58% 10/25/29 .......... 8,885 797(g,i)
4.68% 12/25/30 .......... 12,205 1,053(g,i)
4.75% 11/25/14 .......... 2,430 221(g)
5.00% 02/25/11 - 02/25/32 12,397 1,091(g)
5.08% 05/25/18 .......... 3,524 371(g,i)
5.18% 09/25/42 .......... 63,788 5,802(g,i)
5.23% 04/25/17 - 10/25/17 20,143 1,998(g,i)
5.28% 08/25/16 .......... 6,920 595(g,i)
5.50% 01/25/27 .......... 5,895 731(g)
5.68% 06/25/42 .......... 10,090 996(g,i)
6.00% 12/25/34 .......... 3,250 3,462
7.50% 07/25/41 .......... 1,004 1,074
8.00% 07/25/14 .......... 4,396 4,612
9.37% 09/25/31 .......... 5,545 5,468(i)
10.42% 05/25/17 - 12/25/17 9,591 10,065(i)
13.40% 03/25/17 .......... 808 896(i)
14.77% 04/25/32 .......... 1,787 1,972(i)
Federal National Mortgage
Assoc. (Class S)
4.68% 02/25/31 .......... 8,806 806(g,i)
Federal National Mortgage
Assoc. REMIC
2.00% 06/25/43 .......... 64,897 3,387(g,i)
4.50% 11/15/13 - 11/25/13 14,841 878(g)
5.00% 10/25/22 .......... 3,854 621(g)
11.29% 03/25/31 .......... 8,981 9,497(i)
Federal National Mortgage Assoc.
REMIC (Class B)
5.71% 12/25/22 .......... 511 413(d,f)
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
13
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Federal National Mortgage Assoc.
REMIC (Class J)
1080.91% 03/25/22 .......... $ 1 $ 10(g)
Federal National Mortgage Assoc.
REMIC (Class K)
1008.00% 05/25/22 .......... 1 22(g)
Federal National Mortgage
Assoc. STRIPS
7.50% 11/01/23 - 01/01/24 4,322 844(g)
8.00% 08/01/23 - 07/01/24 978 193(g)
8.50% 03/01/17 - 07/25/22 1,665 303(g)
9.00% 05/25/22 .......... 510 109(g)
Government National
Mortgage Assoc.
5.00% 02/16/34 .......... 3,345 3,192
14.74% 03/17/31 .......... 1,000 1,129(i)
Vendee Mortgage Trust
9.79% 05/15/33 .......... 27,208 961(d,g,i)
Washington Mutual
2.74% 10/25/07 .......... 4,000 4,000
TOTAL AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS
(COST $187,748) ........... 165,210
ASSET BACKED -- 12.7%
Accredited Mortgage Loan Trust
(Class A)
2.72% 07/25/34 .......... 3,135 3,135(i)
American Express Credit Account
Master Trust (Class A)
1.69% 01/15/09 .......... 2,300 2,250
2.44% 02/15/08 .......... 7,000 7,002(i,m)
2.52% 12/15/08 .......... 4,250 4,257(i)
2.54% 04/15/08 .......... 5,600 5,606(i,m)
AmeriCredit Automobile
Receivables Trust
2.57% 12/12/07 .......... 3,008 3,010(i,m)
Bank One Issuance Trust
3.59% 05/17/10 .......... 1,080 1,081
3.76% 08/15/08 .......... 4,500 4,517
PRINCIPAL
AMOUNT VALUE
Bear Stearns Asset Backed
Securities Inc. (Class A)
2.79% 01/25/34 ..........$ 2,318 $ 2,319(i)
BMW Vehicle Owner Trust (Class B)
2.93% 03/25/09 .......... 2,500 2,480
Capital Auto Receivables Asset
Trust (Class A)
2.49% 04/17/06 .......... 852 853(i)
Capital Auto Receivables Asset
Trust (Class B)
3.92% 11/16/09 .......... 3,700 3,698
Capital One Auto Finance
Trust (Class A)
2.50% 03/15/11 .......... 4,000 4,000(i)
Capital One Master Trust
(Class C)
6.70% 06/15/11 .......... 2,344 2,533(b)
Capital One Prime Auto
Receivables Trust (Class A)
2.48% 09/17/07 .......... 4,200 4,202(i)
CDC Mortgage Capital
Trust (Class A)
2.75% 08/25/33 .......... 456 457(i,m)
2.91% 03/25/33 .......... 607 609(i,m)
Centex Home Equity
2.67% 06/25/34 .......... 1,654 1,652(i)
Centex Home Equity Co. LLC
2.59% 01/25/25 .......... 1,872 1,872(i)
Chase Credit Card Master
Trust (Class A)
2.51% 07/15/10 .......... 7,000 7,018(i)
Chase Funding Mortgage Loan
Asset-Backed Certificates
2.55% 01/25/25 .......... 2,659 2,660(i,m)
5.75% 05/25/32 .......... 429 423
Citibank Credit Card Issuance Trust
2.53% 09/17/07 - 12/17/07 13,500 13,502(i)
2.55% 01/20/09 .......... 4,701 4,619
2.58% 03/20/09 .......... 12,000 12,016(i,m)
2.74% 03/07/08 .......... 7,661 7,674(i)
4.45% 04/07/10 .......... 3,078 3,113
6.65% 05/15/08 .......... 1,000 1,041
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
14
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Citifinancial Mortgage Securities Inc.
2.62% 04/25/34 .......... $ 3,201 $ 3,193(i)
CNH Equipment Trust
2.47% 10/15/08 .......... 3,000 3,001(i)
2.48% 07/15/08 .......... 3,000 3,000(b,i)
CNH Equipment Trust (Class A)
2.57% 12/15/10 .......... 2,000 2,000(b,i)
Countrywide Asset-Backed
Certificates
2.52% 11/25/23 .......... 1,901 1,902(i)
2.66% 07/25/31 .......... 1,058 1,059(i,m)
2.68% 05/25/32 .......... 175 176(i)
2.72% 06/25/33 .......... 1,570 1,570(i,m)
2.85% 05/25/33 .......... 246 247(i,m)
Countrywide Asset-Backed
Certificates (Class A)
2.69% 10/25/33 .......... 2,000 2,003(d,i)
2.70% 08/25/32 .......... 610 610(i)
2.75% 04/25/32 .......... 458 458(i)
2.79% 08/25/34 .......... 1,620 1,619(i)
2.82% 03/25/33 .......... 2,657 2,661(i,m)
Daimler Chrysler Auto
Trust (Class B)
2.85% 08/08/10 .......... 957 937
Discover Card Master
Trust I (Class A)
2.55% 09/15/08 .......... 2,000 2,004(i)
2.58% 09/18/07 - 11/15/07 22,385 22,397(i)
Federal National Mortgage Assoc.
3.95% 12/26/31 .......... 4,000 4,019
First Franklin Mtg Loan Asset
Backed Certificates
2.70% 01/25/35 .......... 3,000 3,000(i)
2.72% 01/25/35 .......... 3,000 3,000(i)
First Franklin Mtg Loan Asset Backed
Certificates (Class A)
2.71% 06/25/34 .......... 1,131 1,131(i)
First Horizon Asset Back
Trust (Class A)
2.64% 02/25/34 .......... 8,305 8,303(i,m)
First USA Credit Card Master
Trust (Class A)
2.55% 11/19/08 .......... 12,700 12,722(i)
PRINCIPAL
AMOUNT VALUE
Fleet Credit Card Master
Trust II (Class A)
2.54% 04/15/10 .......... $8,000 $ 8,022(i)
5.60% 12/15/08 .......... 750 774
Fleet Home Equity Loan
Trust (Class A)
2.66% 01/20/33 .......... 4,769 4,767(i)
Ford Credit Auto Owner
Trust (Class B)
4.79% 11/15/06 .......... 2,000 2,016
Ford Credit Floorplan Master
Owner Trust (Class A)
2.44% 07/15/09 .......... 25,000 25,019(i,m)
GMAC Mortgage Corp. Loan
Trust (Class A)
2.52% 06/25/34 .......... 5,500 5,490(i)
GSAA Trust
2.82% 05/25/34 .......... 2,546 2,550(i)
Hertz Vehicle Financing LLC
2.51% 05/25/08 .......... 11,000 11,004(b,i,m)
Household Automotive
Trust (Class A)
2.60% 06/18/07 .......... 1,615 1,616(i,m)
2.71% 07/17/09 .......... 8,500 8,526(i)
Long Beach Mortgage Loan Trust
2.69% 11/25/34 .......... 9,749 9,750(i,m)
2.74% 05/25/32 .......... 96 96(i,m)
2.88% 11/26/32 .......... 2,353 2,360(i)
MBNA Credit Card Master Note
Trust (Class C)
4.05% 01/15/08 .......... 1,904 1,915
Merrill Lynch Home Equity Loan
2.60% 09/25/27 .......... 345 345(i)
Mid-State Trust
7.54% 07/01/35 .......... 1,286 1,393
National City Credit Card Master
Trust (Class A)
2.55% 08/15/07 .......... 5,000 5,005(i,m)
Option One Mortgage Loan
Trust (Class A)
2.84% 02/25/33 .......... 1,977 1,982(i,m)
Peco Energy Transition Trust
6.52% 12/31/10 .......... 2,219 2,475
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
15
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Residential Asset Mortgage
Products Inc.
2.66% 03/25/34 .......... $ 2,685 $ 2,686(i)
2.69% 12/25/33 .......... 10,000 10,000(i,m)
Residential Asset Mortgage
Products Inc. (Class A)
2.70% 06/25/32 .......... 914 915(i)
Residential Asset Securities Corp.
2.67% 07/25/32 .......... 3,351 3,345(i)
Residential Asset Securities
Corp. (Class A)
2.71% 06/25/33 .......... 8,141 8,153(i,m)
4.16% 07/25/30 .......... 2,093 2,102(i)
Residential Funding Mortgage
Securities II (Class A)
2.63% 02/25/34 .......... 1,046 1,043(i,m)
Saxon Asset Securities Trust
2.71% 08/25/35 .......... 2,187 2,187(i,m)
Saxon Asset Securities Trust
(Class A)
2.82% 12/25/32 .......... 1,884 1,887(i)
Sears Credit Account Master
Trust (Class A)
2.53% 08/18/09 .......... 4,000 4,003(i)
2.78% 11/17/09 .......... 3,000 3,002(i,m)
SLM Student Loan Trust (Class A)
2.54% 06/15/18 .......... 1,978 1,979(i)
Wachovia Asset Securitization Inc.
(Class A)
2.64% 06/25/34 .......... 4,434 4,434(i,m)
Wells Fargo Home Equity Trust
3.97% 09/25/24 .......... 1,332 1,326(i)
TOTAL ASSET BACKED
(COST $330,980) ........... 330,778
CORPORATE NOTES -- 23.5%
Abbey National PLC.
7.95% 10/26/29 .......... 3,205 4,123
AIG SunAmerica Global
Financing IX
5.10% 01/17/07 .......... 3,200 3,300(b)
Alberta Energy Co. Ltd.
7.38% 11/01/31 .......... 1,005 1,210
PRINCIPAL
AMOUNT VALUE
Allstate Financial Global Funding
5.25% 02/01/07 .......... $4,385 $ 4,527(b)
Amerada Hess Corp.
7.30% 08/15/31 .......... 2,570 2,867
America Movil S.A. de C.V.
5.75% 01/15/15 .......... 2,565 2,562(b)
American Electric Power Co. Inc.
(Series D)
5.25% 06/01/15 .......... 2,155 2,160
American Greetings
6.10% 08/01/28 .......... 1,080 1,153
American Standard Inc.
7.38% 04/15/05 .......... 3,160 3,198
7.63% 02/15/10 .......... 2,175 2,487
Appalachian Power Co. (Series C)
2.89% 06/29/07 .......... 2,255 2,257(i)
Appalachian Power Co. (Series E)
4.80% 06/15/05 .......... 2,675 2,698
Appalachian Power Co. (Series G)
3.60% 05/15/08 .......... 1,630 1,611
Assurant Inc.
6.75% 02/15/34 .......... 2,135 2,315
AT&T Wireless Services Inc.
7.35% 03/01/06 .......... 2,215 2,318
8.75% 03/01/31 .......... 3,600 4,853
AutoZone Inc.
4.75% 11/15/10 .......... 2,140 2,088
Banco Santander Chile
5.38% 12/09/14 .......... 3,465 3,523(b)
Bank of America Corp.
2.45% 02/17/09 .......... 695 696(i)
3.88% 01/15/08 .......... 331 333
7.40% 01/15/11 .......... 1,045 1,212
BB&T Corp.
4.75% 10/01/12 .......... 1,365 1,370
6.38% 06/30/05 .......... 2,745 2,793(i)
BBVA Bancomer Capital Trust I
10.50% 02/16/11 .......... 3,735 4,015(b)
BellSouth Corp.
6.00% 11/15/34 .......... 3,175 3,217
Belo Corp.
8.00% 11/01/08 .......... 2,175 2,450
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
16
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Brandywine Operating
Partnership Lp
4.50% 11/01/09 .......... $8,225 $ 8,169
British Telecommunications PLC.
8.38% 12/15/10 .......... 1,940 2,324
Burlington Northern Santa Fe Corp.
8.13% 04/15/20 .......... 3,380 4,399
Campbell Soup Co.
5.50% 03/15/07 .......... 2,725 2,837
Carolina Power & Light Co.
6.13% 09/15/33 .......... 2,275 2,423
Cendant Corp.
6.25% 01/15/08 .......... 4,090 4,362
Charter One Bank Fsb
6.38% 05/15/12 .......... 1,905 2,096
Citigroup Inc.
5.85% 12/11/34 .......... 4,685 4,819
City National Corp.
5.13% 02/15/13 .......... 2,325 2,348
CNF Inc.
6.70% 05/01/34 .......... 2,535 2,714
Comcast Cable Communications
6.38% 01/30/06 .......... 3,145 3,248
ConAgra Foods Inc.
6.00% 09/15/06 .......... 3,250 3,385
Consolidated Edison Co.
of New York
5.63% 07/01/12 .......... 4,075 4,351
Consolidated Natural Gas Co.
5.38% 11/01/06 .......... 4,315 4,443
Consumers Energy Co. (Series L)
5.00% 02/15/12 .......... 2,820 2,870(b)
Countrywide Home Loans Inc.
5.63% 05/15/07 .......... 2,035 2,123
COX Communications Inc.
5.45% 12/15/14 .......... 3,235 3,235(b)
CSX Corp.
5.50% 08/01/13 .......... 95 99
CSX Transportation Inc.
9.75% 06/15/20 .......... 1,365 1,905
DaimlerChrysler NA Holding Corp.
2.96% 05/24/06 .......... 2,200 2,211(i)
7.25% 01/18/06 .......... 2,545 2,648
PRINCIPAL
AMOUNT VALUE
Delhaize America Inc.
7.38% 04/15/06 .......... $5,065 $ 5,318
Deutsche Telekom International
Finance BV
5.25% 07/22/13 .......... 3,205 3,294
Dominion Resources Inc. (Series B)
4.13% 02/15/08 .......... 3,330 3,346
Dominion Resources Inc. (Series G)
3.66% 11/15/06 .......... 5,325 5,334
Duke Capital LLC
4.30% 05/18/06 .......... 2,180 2,206
4.33% 11/16/06 .......... 3,645 3,691
6.25% 02/15/13 .......... 2,270 2,454
Duke Energy Corp.
4.50% 04/01/10 .......... 1,785 1,806
Enterprise Products Operating LP
4.00% 10/15/07 .......... 4,265 4,255(b)
EOP Operating LP (REIT)
7.75% 11/15/07 .......... 2,605 2,875
European Investment Bank
4.63% 03/01/07 .......... 140 144
FirstEnergy Corp. (Series B)
6.45% 11/15/11 .......... 3,215 3,493
Ford Motor Credit Co.
5.63% 10/01/08 .......... 2,165 2,208(j)
5.80% 01/12/09 .......... 2,980 3,038
7.38% 02/01/11 .......... 3,615 3,894
FPL Group Capital Inc. (Series A)
4.09% 02/16/07 .......... 2,970 3,002
General Mills Inc.
3.88% 11/30/07 .......... 2,035 2,040
5.13% 02/15/07 .......... 2,550 2,630
General Motors Acceptance Corp.
3.19% 05/18/06 .......... 8,180 8,132(i)
6.13% 09/15/06 .......... 3,095 3,173
6.75% 01/15/06 .......... 3,540 3,632
6.88% 09/15/11 .......... 1,065 1,088
7.25% 03/02/11 .......... 540 564
General Motors Corp.
7.20% 01/15/11 .......... 2,140 2,193
8.38% 07/15/33 .......... 2,135 2,196(j)
Georgia Power Co.
4.88% 07/15/07 .......... 3,565 3,668
- ----------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
17
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Glencore Funding LLC
6.00% 04/15/14 .......... $1,050 $ 1,016(b)
Goldman Sachs Group Inc.
5.25% 10/15/13 .......... 4,275 4,375
6.60% 01/15/12 .......... 2,210 2,465
Goodrich Corp.
7.10% 11/15/27 .......... 2,380 2,609
Grupo Televisa S.A.
8.00% 09/13/11 .......... 2,120 2,459
GTECH Holdings Corp.
4.50% 12/01/09 .......... 2,175 2,175(b)
HBOS Capital Funding LP
6.07% 06/30/49 .......... 3,730 3,998(b,i)
HBOS PLC.
3.13% 01/12/07 .......... 4,385 4,353(b)
HCA Inc.
5.50% 12/01/09 .......... 1,500 1,500
Hertz Corp.
3.40% 08/05/08 .......... 1,335 1,342(i)
6.35% 06/15/10 .......... 2,205 2,271
Household Finance Corp.
3.38% 02/21/06 .......... 1,670 1,673
6.38% 11/27/12 .......... 2,140 2,361
6.50% 01/24/06 - 11/15/08 4,195 4,505
HSBC Bank USA NA
3.88% 09/15/09 .......... 4,280 4,241
HSBC Capital Funding LP
4.61% 12/29/49 .......... 5,370 5,184(b,i)
HSBC Capital Funding LP (Series 1)
9.55% 12/31/49 .......... 3,380 4,211(b,i)
HSBC Finance Corp.
6.75% 05/15/11 .......... 5,395 6,055
Hudson United Bank
7.00% 05/15/12 .......... 4,375 4,900
Huntington National Bank
2.75% 10/16/06 .......... 2,785 2,752
Hydro Quebec
8.25% 04/15/26 .......... 2,475 3,414
International Lease Finance Corp.
3.37% 07/15/05 .......... 4,100 4,128(i,m)
iStar Financial Inc.
6.00% 12/15/10 .......... 3,400 3,588
iStar Financial Inc. (REIT)
3.72% 03/12/07 .......... 3,250 3,302(i)
PRINCIPAL
AMOUNT VALUE
Jersey Central Power & Light
5.63% 05/01/16 .......... $1,705 $ 1,779
John Hancock Funds
6.50% 03/01/11 .......... 2,660 2,946(b)
Kellogg Co. (Series B)
6.60% 04/01/11 .......... 3,470 3,883
Kerr-McGee Corp.
5.88% 09/15/06 .......... 2,260 2,345
6.95% 07/01/24 .......... 2,225 2,457
Keycorp
4.63% 05/16/05 .......... 4,990 5,024
KFW International Finance
4.75% 01/24/07 .......... 1,620 1,666
Kinder Morgan Energy
Partners LP
5.13% 11/15/14 .......... 2,540 2,537
Kinder Morgan Inc.
6.50% 09/01/12 .......... 2,795 3,059
Kraft Foods Inc.
4.13% 11/12/09 .......... 5,105 5,075
Lockheed Martin Corp.
8.50% 12/01/29 .......... 4,595 6,276
Marsh & McLennan Cos. Inc.
2.19% 07/13/07 .......... 3,000 2,931(i,m)
5.38% 07/15/14 .......... 4,270 4,163
Masco Corp.
6.75% 03/15/06 .......... 3,040 3,164
Merck & Co. Inc.
5.25% 07/01/06 .......... 2,155 2,214
Metropolitan Life Global Funding I
4.75% 06/20/07 .......... 2,160 2,216(b)
Midamerican Energy Holdings Co.
3.50% 05/15/08 .......... 3,160 3,093
Monumental Global Funding III
(Series A)
5.20% 01/30/07 .......... 3,165 3,264(b)
Morgan Stanley
4.00% 01/15/10 .......... 3,180 3,144
4.25% 05/15/10 .......... 670 669
Motorola Inc.
4.61% 11/16/07 .......... 3,340 3,406
National Rural Utilities
Cooperative Finance Corp.
6.00% 05/15/06 .......... 1,635 1,694
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
18
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Nationwide Mutual Insurance Co.
7.88% 04/01/33 .......... $1,075$ 1,281(b)
NB Capital Trust IV
8.25% 04/15/27 .......... 4,160 4,633
News America Inc.
6.20% 12/15/34 .......... 2,580 2,615(b)
Noble Energy Inc.
8.00% 04/01/27 .......... 2,970 3,735
Nordic Investment Bank
2.75% 01/11/06 .......... 1,000 999
Norfolk Southern Corp.
6.00% 04/30/08 .......... 475 509
7.05% 05/01/37 .......... 3,925 4,608
Norfolk Southern Railway Co.
9.75% 06/15/20 .......... 1,885 2,660
Northeast Utilities (Series B)
3.30% 06/01/08 .......... 2,105 2,057
Northrop Grumman Corp.
4.08% 11/16/06 .......... 5,245 5,298
Ocean Energy Inc.
4.38% 10/01/07 .......... 1,410 1,423
Ohio Power Co. (Series E)
6.60% 02/15/33 .......... 1,120 1,256
Pacific Gas & Electric Co.
2.72% 04/03/06 .......... 947 948(i)
Pemex Finance Ltd.
9.03% 02/15/11 .......... 5,490 6,311
9.69% 08/15/09 .......... 6,284 7,058
Pemex Project Funding
Master Trust
7.38% 12/15/14 .......... 2,020 2,238
8.63% 02/01/22 .......... 2,120 2,459
Pepco Holdings Inc.
5.50% 08/15/07 .......... 3,385 3,512
Petrobras International
Finance Co.
9.75% 07/06/11 .......... 1,500 1,811
Petro-Canada
5.35% 07/15/33 .......... 1,795 1,672
Petroleos Mexicanos
9.50% 09/15/27 .......... 4,830 6,038
Pioneer Natural Resources Co.
6.50% 01/15/08 .......... 3,805 4,074
PRINCIPAL
AMOUNT VALUE
Potomac Edison Co.
5.35% 11/15/14 .......... $1,520 $ 1,532(b)
Principal Life Global Funding I
5.25% 01/15/13 .......... 2,790 2,851(b)
Procter & Gamble - ESOP (Series A)
9.36% 01/01/21 .......... 4,260 5,672
Prudential Financial Inc.
4.10% 11/15/06 .......... 5,325 5,383(k)
PSI Energy Inc.
6.65% 06/15/06 .......... 2,235 2,328
Public Service Co. of New Mexico
4.40% 09/15/08 .......... 3,315 3,329
Puget Energy Inc.
3.36% 06/01/08 .......... 2,120 2,082
Quest Diagnostics
6.75% 07/12/06 .......... 2,205 2,306
Rabobank Capital Funding Trust
5.25% 12/29/49 .......... 2,130 2,118(b,i)
Raytheon Co.
4.85% 01/15/11 .......... 2,130 2,182
6.40% 12/15/18 .......... 2,225 2,453
RBS Capital Trust I
5.51% 09/29/49 .......... 3,175 3,248(i)
Reckson Operating Partnership LP
5.88% 08/15/14 .......... 2,280 2,365
Royal Bank of Scotland
Group PLC.
7.65% 08/31/49 .......... 1,915 2,331(i)
Royal Bank of Scotland
Group PLC. ADR
9.12% 03/31/49 .......... 2,600 3,167
Safeco Corp.
4.20% 02/01/08 .......... 1,115 1,127
SBC Communications Inc.
5.10% 09/15/14 .......... 2,755 2,781
Shurgard Storage Centers Inc.
(REIT)
5.88% 03/15/13 .......... 1,445 1,493
Simon Property Group LP (REIT)
4.88% 08/15/10 .......... 3,870 3,945(b)
SLM Corp.
4.00% 01/15/09 .......... 2,135 2,135
Southern California Edison Co.
8.00% 02/15/07 .......... 2,295 2,499
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
19
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Southwest Airlines Co.
5.25% 10/01/14 .......... $1,070 $ 1,075
Sprint Capital Corp.
4.78% 08/17/06 .......... 5,180 5,279(k)
6.13% 11/15/08 .......... 2,715 2,912
6.90% 05/01/19 .......... 1,950 2,177
7.63% 01/30/11 .......... 2,175 2,526
8.38% 03/15/12 .......... 3,155 3,846
8.75% 03/15/32 .......... 2,690 3,579
State of Illinois
4.95% 06/01/23 .......... 3,145 3,063
Telecom Italia Capital S.A. (Series B)
5.25% 11/15/13 .......... 3,205 3,241
Telefonos de Mexico S.A. de C.V.
4.50% 11/19/08 .......... 2,170 2,187
8.25% 01/26/06 .......... 4,320 4,537
TELUS Corp.
7.50% 06/01/07 .......... 4,015 4,363
The Walt Disney Co.
6.75% 03/30/06 .......... 2,165 2,257
Time Warner Inc.
7.75% 06/15/05 .......... 2,660 2,710
9.13% 01/15/13 .......... 3,205 4,091
TuranAlem Finance BV
7.88% 06/02/10 .......... 3,280 3,280(b)
TXU Electric Delivery Co.
6.38% 05/01/12 .......... 2,280 2,504
Tyco International Group S.A.
5.80% 08/01/06 .......... 3,535 3,662
6.75% 02/15/11 .......... 3,665 4,115
Tyson Foods Inc.
7.25% 10/01/06 .......... 8,615 9,146
UBS Preferred Funding Trust I
8.62% 10/29/49 .......... 2,115 2,557(i)
Union Pacific Corp.
6.65% 01/15/11 .......... 2,200 2,455
Union Planters Bank NA
5.13% 06/15/07 .......... 375 388
8.13% 06/01/06 .......... 1,920 2,021
US Bank National Assoc.
2.85% 11/15/06 .......... 3,750 3,714
Valero Energy Corp.
6.88% 04/15/12 .......... 925 1,049
Valero Energy Corp.
7.50% 04/15/32 .......... 600 722
PRINCIPAL
AMOUNT VALUE
Verizon
6.50% 09/15/11 .......... $2,140 $2,350
Verizon Global Funding Corp.
7.75% 12/01/30 - 06/15/32 6,790 8,439
Verizon Pennsylvania Inc.
(Series A)
5.65% 11/15/11 .......... 4,445 4,677
Viacom Inc.
5.50% 05/15/33 .......... 1,425 1,390
Wachovia Corp.
5.25% 08/01/14 .......... 3,960 4,056
Washington Mutual Bank FA
5.13% 01/15/15 .......... 2,120 2,104
Washington Mutual Inc.
5.63% 01/15/07 .......... 360 375
WellPoint Inc.
4.25% 12/15/09 .......... 2,415 2,418(b)
Wells Fargo & Co.
5.25% 12/01/07 .......... 805 841
Westar Energy Inc.
9.75% 05/01/07 .......... 5,040 5,641
Weyerhaeuser Co.
6.00% 08/01/06 .......... 4,780 4,978
6.13% 03/15/07 .......... 1,521 1,604
6.75% 03/15/12 .......... 1,275 1,438
Wisconsin Electric Power
3.50% 12/01/07 .......... 2,565 2,555
Wisconsin Energy Corp.
5.88% 04/01/06 .......... 1,545 1,594
Yara International ASA
5.25% 12/15/14 .......... 2,150 2,164(b)
TOTAL CORPORATE NOTES
(COST $601,507) ........... 612,503
NON-AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS -- 10.8%
Banc of America
2.52% 06/15/18 .......... 6,698 6,698(b,i,m)
Bear Stearns Commercial
Mortgage Securities
2.66% 01/14/16 .......... 1,300 1,300(b,i)
3.88% 08/13/39 .......... 6,696 6,642
4.17% 01/12/41 .......... 5,520 5,565
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
20
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
4.68% 08/13/39 ..........$ 7,202 $ 7,195
6.02% 02/14/31 .......... 3,657 3,920
Bear Stearns Commercial
Mortgage Securities (Class B)
6.20% 02/14/31 .......... 475 518
CalSTRS Trust
4.13% 11/20/12 .......... 5,926 5,976(b)
Citicorp Mortgage Securities Inc.
6.13% 08/25/32 .......... 1,029 1,027(i)
Citicorp Mortgage Securities Inc.
(Class B)
6.13% 08/25/32 .......... 2,597 2,591(i)
Crusade Global Trust (Class A)
2.70% 09/18/34 .......... 3,379 3,386(i,m)
CS First Boston Mortgage
Securities Corp.
1.58% 03/15/35 .......... 82,194 4,757(b,i)
7.22% 01/15/37 .......... 21,841 539(b,d,i)
DLJ Commercial Mortgage Corp.
6.24% 11/12/31 .......... 7,703 8,278
First Union-Lehman Brothers-
Bank of America
6.56% 11/18/35 .......... 3,857 4,142
GMAC Commercial Mortgage
Securities Inc.
4.21% 12/10/41 .......... 6,099 6,112(i)
6.24% 12/10/41 .......... 203,439 3,560(b,d,i)
6.42% 05/15/35 .......... 5,591 6,011
GMAC Commercial Mortgage
Securities Inc. (Class A)
4.55% 12/10/41 .......... 6,149 6,165(i)
4.92% 12/10/41 .......... 6,148 6,169(i)
GMAC Commercial Mortgage
Securities Inc. (Class X)
4.03% 12/10/41 .......... 92,952 3,172(d,i)
Granite Mortgages PLC.
2.26% 01/20/43 .......... 2,283 2,284(i)
Homeside Mortgage Securities
Trust (Class A)
2.27% 01/20/27 .......... 1,856 1,859(i)
Impac CMB Trust
2.70% 08/25/32 .......... 828 829(i)
2.78% 10/25/34 .......... 24,512 24,512(i,m)
PRINCIPAL
AMOUNT VALUE
Impac CMB Trust (Class A)
2.80% 12/25/33 ..........$ 5,074 $ 5,073(i)
2.85% 11/25/32 .......... 2,496 2,501(i,m)
Interstar Millennium Trust
(Class A)
2.68% 03/14/36 .......... 2,018 2,018(i,m)
JP Morgan Chase Commercial
Mortgage Securities Corp.
1.22% 01/12/39 .......... 51,060 2,562(b,i)
6.47% 11/15/35 .......... 5,391 5,994
JP Morgan Chase Commercial
Mortgage Securities Corp.
(Class A)
4.92% 10/15/37 .......... 4,200 4,255(i)
LB-UBS Commercial
Mortgage Trust
3.68% 07/15/37 .......... 124,176 2,484(b,d,i)
3.96% 03/15/34 .......... 14,947 329(b,d,i)
4.06% 09/15/27 .......... 6,696 6,695(i)
4.20% 12/15/29 .......... 3,113 3,120
4.51% 12/15/29 .......... 3,039 3,044
4.53% 01/15/36 .......... 24,083 1,845(b,d)
4.86% 12/15/39 .......... 5,167 5,168(i)
6.17% 04/15/37 .......... 48,639 988(b,d,i)
6.23% 03/15/26 .......... 3,000 3,252
6.24% 01/15/36 .......... 29,696 807(b,d,i)
6.85% 12/15/39 .......... 54,030 979(b,d,i)
7.74% 09/15/37 .......... 47,450 771(b,d,i)
8.33% 03/15/36 .......... 88,866 2,416(b,d,i)
LB-UBS Commercial Mortgage
Trust (Class A)
6.13% 12/15/30 .......... 1,777 1,946
6.65% 11/15/27 .......... 8,377 9,380
LB-UBS Commercial Mortgage
Trust (Class B)
6.65% 07/14/16 .......... 750 839(b)
Lehman Brothers Floating Rate
Commercial Mortgage Trust
2.66% 10/15/17 .......... 7,000 7,015(b,i)
2.71% 10/15/17 .......... 4,000 4,008(b,i)
Master Alternative Loans Trust
5.00% 08/25/18 .......... 3,671 422(g)
6.50% 08/25/34 - 01/25/35 10,703 11,202
- ----------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
21
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
PRINCIPAL
AMOUNT VALUE
Morgan Stanley Capital I
5.11% 06/15/40 ..........$ 2,000 $ 2,044 (i)
7.11% 04/15/33 .......... 1,020 1,139
Morgan Stanley Capital I
(Class A)
4.66% 09/13/45 .......... 3,718 3,698
4.97% 04/14/40 .......... 5,172 5,231
Morgan Stanley Capital I
(Class D)
6.92% 07/15/30 .......... 2,000 2,234(i)
Morgan Stanley Dean Witter
Capital I
5.73% 04/15/34 .......... 16,134 348(b,d,i)
6.52% 10/15/35 .......... 25,622 502(b,d,i)
Morgan Stanley Dean Witter
Capital I (Class A)
5.72% 12/18/32 .......... 99 105
5.98% 02/15/31 .......... 924 940
6.39% 10/15/35 .......... 5,000 5,549
6.54% 02/15/31 .......... 1,387 1,495
National RMBS Trust
2.62% 03/20/34 .......... 3,666 3,666(i,m)
Nomura Asset Securities Corp.
(Class A)
6.59% 03/15/30 .......... 8,377 9,054
Puma Finance Ltd. (Class A)
2.71% 03/25/34 .......... 3,767 3,769(i)
Sequoia Mortgage Trust
2.67% 06/20/34 .......... 1,793 1,789(i)
Sequoia Mortgage Trust (Class A)
2.69% 07/20/34 .......... 4,558 4,551(i,m)
Structured Asset Securities Corp.
(Class X)
2.02% 02/25/28 .......... 12,533 658(i)
Thornburg Mortgage Securities
Trust (Class A)
2.76% 04/25/43 .......... 2,163 2,166(i,m)
Wachovia Bank Commercial
Mortgage Trust
2.58% 03/15/14 .......... 2,500 2,504(b,i)
2.92% 03/15/15 .......... 5,180 5,201(b,i,m)
3.30% 03/15/15 .......... 3,500 3,525(b,i,m)
PRINCIPAL
AMOUNT VALUE
Wachovia Bank Commercial
Mortgage Trust (Class C)
2.72% 03/15/14 .......... $ 750 $ 752 (b,i)
Washington Mutual
2.61% 07/25/44 .......... 7,741 7,750(i,m)
TOTAL NON-AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS
(COST $282,623) ........... 280,990
SOVEREIGN BONDS -- 0.9%
Government of Bahamas
6.63% 05/15/33 .......... 2,575 2,930(b)
Government of Finland
4.75% 03/06/07 .......... 1,910 1,971
Government of Russia
5.00% 03/31/30 .......... 2,580 2,657(b,k)
Mexico Government
International Bond
6.75% 09/27/34 .......... 3,145 3,095
Ontario Electricity
Financial Corp.
7.45% 03/31/13 .......... 465 565
Province of British Columbia
4.63% 10/03/06 .......... 2,410 2,469
Province of Manitoba Canada
4.25% 11/20/06 .......... 3,570 3,635
Province of New Brunswick
3.50% 10/23/07 .......... 2,780 2,783
Province of Ontario
3.50% 09/17/07 .......... 3,780 3,781
5.13% 07/17/12 .......... 500 527
TOTAL SOVEREIGN BONDS
(COST $23,877) ............ 24,413
TOTAL BONDS AND NOTES
(COST $2,886,568) ......... 2,886,767
- ----------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
22
GE S&S INCOME FUND
Schedule of Investments
(dollars in thousands)-- December 31, 2004
NUMBER
OF SHARES VALUE
PREFERRED STOCK -- 0.2%
- --------------------------------------------------------------------------------
Zurich Regcaps Funding Trust I
(COST $4,409) ............. 4,270 $ 4,338(b,i)
NUMBER OF
CONTRACTS VALUE
- --------------------------------------------------------------------------------
PURCHASED OPTIONS -- 0.0%*
- --------------------------------------------------------------------------------
PUT OPTIONS
U.S. Treasury Notes 5 Yr. Futures
(COST $838) ............... 1,068 217
TOTAL INVESTMENTS IN SECURITIES
(COST $2,891,815) ......... 2,891,322
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 19.8%
- --------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $514,576) ...... 514,576,037 514,576(l,m)
TOTAL INVESTMENTS
(COST $3,406,391) .... 3,405,898
LIABILITIES IN EXCESS OF OTHER
ASSETS, NET (30.9)% .. (804,299)
==========
NET ASSETS-- 100.0% $2,601,599
==========
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
The Income Fund had the following written option contracts open at December 31,
2004:
EXPIRATION DATE/ UMBER OF
CALL OPTIONS STRIKE PRICE CONTRACTS VALUE
- --------------------------------------------------------------------------------
U S Treasury Notes
5 Yr. Futures (Written
Option Premium $431) Jan 05/109.50 1,068 (451)
EXPIRATION DATE/ NUMBER OF
PUT OPTIONS STRIKE PRICE CONTRACTS VALUE
- --------------------------------------------------------------------------------
U S Treasury Notes
5 Yr. Futures (Written
Option Premium $397) Jan 05/108.00 1,068 (50)
----
(501)
====
The Income Fund had the following long futures contracts open at December 31,
2004:
NUMBER CURRENT
EXPIRATION OF NOTIONAL UNREALIZED
DESCRIPTION DATE CONTRACTS VALUE APPRECIATION
- --------------------------------------------------------------------------------
Euro Dollar
Futures December 2005 330 $79,563 $(117)
Euro Dollar
Futures December 2007 330 78,944 (50)
U.S.Treasury
Notes 5 Yr.
Futures March 2005 1,196 130,999 682
The Income Fund had the following short futures contracts open at December 31,
2004:
NUMBER CURRENT
EXPIRATION OF NOTIONAL UNREALIZED
DESCRIPTION DATE CONTRACTS VALUE APPRECIATION
- --------------------------------------------------------------------------------
Euro Dollar
Futures December 2006 660 $(158,458) $163
U.S.Treasury
Notes 10 Yr.
Futures March 2005 339 (37,947) 62
-----
$ 740
=====
The Income Fund had the following forward foreign currency contracts open at
December 31, 2004:
CURRENCY SETTLEMENT UNREALIZED
CURRENCY BOUGHT SOLD DATE APPRECIATION
- --------------------------------------------------------------------------------
1,339,842 JPY 12,874 USD January 21, 2005 221
- ---------
See Notes to Schedules of Investments on page 25 and Notes to Financial
Statements.
+ Percentages are based on net assets as of December 31, 2004.
23
Notes to Performance (unaudited)
Information on the preceding performance pages relating to the GE S&S Program
Mutual Fund and GE S&S Income Fund (each a "Fund" and collectively the "Funds")
one year total return is audited, all other information, including the portfolio
manager Q&A pages, is unaudited.
Total returns take into account changes in share price and assume reinvestment
of dividends and capital gains distributions, if any. Investment returns and net
asset value on an investment will fluctuate and you may have a gain or loss when
you sell your shares.
Shares of the Funds are neither insured nor guaranteed by the U.S. Government,
and their prices will fluctuate with market conditions.
The Standard & Poor's ("S&P") 500 Composite Index of stocks (S&P 500) and the
Lehman Brothers Aggregate Bond Index (LB Aggregate) are unmanaged indices and do
not reflect the actual cost of investing in the instruments that comprise each
index. S&P 500 is an unmanaged, market capitalization-weighted index of stocks
of 500 large U.S. companies, which is widely used as a measure of large-cap
stock market performance. LB Aggregate is a market value-weighted index of
investment-grade debt issues, including government, corporate, asset-backed and
mortgage-backed securities, with maturities of one year or more. The results
shown for the foregoing indices assume the reinvestment of net dividends or
interest and are unaudited.
The peer universe of funds used in our peer ranking calculation is based on the
blend of Lipper peer categories, as shown. This blend is the same as the
category blend used by the Wall Street Journal. The actual number of funds and
numerical rankings in the Lipper and Wall Street Journal universes could differ
since the Wall Street Journal excludes certain funds, which do not meet their
net asset or number of shareholder publication thresholds. Lipper is an
independent mutual fund rating service. A Fund's performance may be compared to
or ranked within a universe of mutual funds with investment objectives and
policies similar but not necessarily identical to the Fund's. Such comparisons
or rankings are made on the basis of several factors, including the Fund's
objectives and policies, management style and strategy, and portfolio
composition, and may change over time if any of those factors change. Lipper is
an independent mutual fund rating service.
24
Notes to Schedules of Investments
(dollars in thousands)-- December 31, 2004
The views expressed in this document reflect our judgment as of the publication
date and are subject to change at any time without notice. The securities cited
may not represent future holdings and should not be considered as a
recommendation to purchase or sell a particular security. See the GE S&S Program
Disclosure Statement for more information about the Funds' investment
objectives, policies, risks, and permissible investments.
(a) Non-income producing security.
(b) Pursuant to Rule 144A of the Securities Act of 1933, these Securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. At December 31, 2004, these securities amounted to
$169,021, or 6.50%, of net assets for the GE S&S Income Fund. These
securities have been determined to be liquid using procedures established by
the Board of Trustees.
(c) Settlement is on a delayed delivery or when-issued basis with final maturity
to be announced (TBA) in the future.
(d) Coupon amount represents effective yield.
(e) State Street Corp. is the parent company of State Street Bank & Trust Co.,
the Fund's custodian and accounting agent.
(f) Principal only securities represent the right to receive the monthly
principal payments on an underlying pool of mortgages. No payments of
interest on the pool are passed through to the "principal only" holder.
(g) Interest only securities represent the right to receive the monthly interest
payments on an underlying pool of mortgages. Payments of principal on the
pool reduce the value of the "interest only" holding.
(h) At December 31, 2004, all or a portion of this security was pledged to cover
collateral requirements for futures, options, forward foreign currency
contracts and/or TBA's.
(i) Variable or floating rate security. The stated rate represents the rate at
December 31, 2004.
(j) All or a portion of the security is out on loan.
(k) Step coupon bond. Interest rate shown reflects rate at December 31, 2004.
(l) GE Asset Management Incorporated, ("GEAM"), the Fund's Investment Advisor,
is also the Investment Advisor of the GEI Short-Term Investment Fund. No
advisory fee is charged by GEAM to the GEI Short-Term Investment Fund nor
will the Fund incur any sales charge, redemption fee, distribution fee or
service fee in connection with its investments in the GEI Short-Term
Investment Fund.
(m) All or a portion of the security purchased with collateral from securities
lending.
(n) Treasury inflated Securities.
ABBREVIATIONS:
ADR -- American Depository Receipt
REMIC -- Real Estate Mortgage Investment Conduit
REIT -- Real Estate Investment Trust
STRIPS -- Separate Trading of Registered Interest and Principal of
Securities
25
Financial Highlights
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE YEARS INDICATED
GE S&S PROGRAM MUTUAL FUND 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 42.94 $ 35.13 $ 44.03 $ 49.66 $ 54.55
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income .................. 0.79 0.52 0.54 0.53 0.64
Net realized and unrealized
gains (losses) on investments ....... 2.86 7.82 (8.87) (4.86) (0.61)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS .................. 3.65 8.34 (8.33) (4.33) 0.03
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income .................. 0.79 0.53 0.54 0.53 0.64
Net realized gains ..................... 0.44 -- 0.03 0.77 4.28
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS ....................... 1.23 0.53 0.57 1.30 4.92
NET ASSET VALUE, END OF YEAR .............. $ 45.36 $ 42.94 $ 35.13 $ 44.03 $ 49.66
====================================================================================================================================
TOTAL RETURN(A) ........................... 8.50% 23.77% (18.91)% (8.73)% 0.06%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) ...................... $4,154,143 $3,939,274 $3,161,490 $3,972,726 $4,504,669
Ratios to average net assets:
Net investment income ............... 1.80% 1.38% 1.36% 1.14% 1.15%
Net expenses ........................ 0.13% 0.18% 0.13% 0.16% 0.09%
Gross expenses ...................... 0.13% 0.18% 0.13% 0.16% 0.09%
Portfolio turnover rate ................ 28% 25% 32% 57% 40%
(a) TOTAL RETURNS ARE HISTORICAL AND ASSUME CHANGES IN SHARE PRICE, REINVESTMENT
OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS AND ASSUME NO SALES CHARGE.
- ----------
See Notes to Financial Statements.
26
Financial Highlights
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE YEARS INDICATED
GE S&S INCOME FUND 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........ $ 11.70 $ 11.80 $ 11.25 $ 11.07 $ 10.70
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) ........... 0.47 0.47 0.55 0.69 0.74
Net realized and unrealized
gains on investments ................ 0.01 0.02 0.59 0.20 0.40
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
INVESTMENT OPERATIONS .................. 0.48 0.49 1.14 0.89 1.14
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income .................. 0.47 0.49 0.59 0.71 0.77
Net realized gains ..................... 0.19 0.10 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS ....................... 0.66 0.59 0.59 0.71 0.77
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR .............. $ 11.52 $ 11.70 $ 11.80 $ 11.25 $ 11.07
====================================================================================================================================
TOTAL RETURN(A) ........................... 4.12% 4.29% 10.42% 8.26% 11.09%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) ...................... $2,601,599 $2,614,617 $2,640,387 $2,444,416 $2,347,251
Ratios to average net assets:
Net investment income ............... 4.02% 3.96% 4.83% 6.12% 6.91%
Net expenses ........................ 0.14% 0.15% 0.13% 0.17% 0.12%
Gross expenses ...................... 0.14% 0.15% 0.13% 0.17% 0.12%
Portfolio turnover rate ................ 342% 335% 300% 231% 229%
(a) TOTAL RETURNS ARE HISTORICAL AND ASSUME CHANGES IN SHARE PRICE, REINVESTMENT
OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS AND ASSUME NO SALES CHARGE.
- ---------
See Notes to Financial Statements.
27
s
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2004 (AMOUNTS IN THOUSANDS)
GE S&S
PROGRAM GE S&S
MUTUAL FUND INCOME FUND
ASSETS
Investments in securities, at market* (cost $3,555,019 and
2,891,815, respectively) ........................................... $4,103,366 $2,891,322
Short-term investments (at amortized cost) ............................. 73,658 514,576
Receivable for investments sold ........................................ -- 11,354
Income receivables ..................................................... 4,322 22,715
Receivable for fund shares sold ........................................ 1,013 2,239
Variation margin receivable ............................................ -- 91
Unrealized gain on forward foreign currency contracts .................. -- 221
Distributions paid in advance .......................................... -- 285
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS ........................................................ 4,182,359 3,442,803
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable upon return of securities loaned ............................... 20,691 272,382
Payable for investments purchased ...................................... 6,037 567,553
Payable for fund shares redeemed ....................................... 168 149
Payable to GEAM ........................................................ 1,320 619
Options written, at market (premium received $0
and $828, respectively) ............................................ -- 501
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ................................................... 28,216 841,204
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ................................................................ $4,154,143 $2,601,599
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital paid in ........................................................ 3,641,812 2,593,821
Undistributed net investment income .................................... 434 3,670
Accumulated net realized gain (loss) ................................... (36,450) 3,313
Net unrealized appreciation/(depreciation) on:
Investments ........................................................ 548,347 (493)
Futures ............................................................ -- 740
Written options .................................................... -- 327
Foreign currency related transactions .............................. -- 221
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ................................................................ $4,154,143 $2,601,599
- ------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding ($25.00 and $10.00 value respectively) ................. 91,579 225,858
Net asset value per share ................................................. $45.36 $11.52
* Includes $20,255 and $265,121 of securities on loan in the GE S&S Program
Mutual Fund and GE S&S Income Fund, respectively.
- ---------
See Notes to Financial Statements.
28
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004 (AMOUNTS IN THOUSANDS)
GE S&S
PROGRAM GE S&S
MUTUAL FUND INCOME FUND
INVESTMENT INCOME
INCOME:
Dividend ............................................................ $ 75,479 $ --
Interest* ........................................................... 587 106,589
Less: Foreign taxes withheld ........................................ (245) --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME ........................................................... 75,821 106,589
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory and administration fees .................................... 3,399 1,871
Shareholder servicing agent expenses ................................ 378 360
Transfer agent fees ................................................. 952 903
Custody and accounting expenses ..................................... 160 294
Professional fees ................................................... 115 75
Registration, printing, filing and miscellaneous expenses ........... 150 125
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES ...................................................... 5,154 3,628
Less: Fee reimbursement from transfer agent (See Note 2) ............ (118) (113)
- ------------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES ........................................................ 5,036 3,515
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME .................................................. 70,785 103,074
====================================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON:
Investments ......................................................... 158,300 35,452
Futures ............................................................. -- 1,845
Written options ..................................................... -- 2,691
Swaps ............................................................... -- 700
Foreign currency related transactions ............................... -- 399
INCREASE (DECREASE) IN UNREALIZED APPRECIATION/(DEPRECIATION) ON:
Investments ......................................................... 98,863 (39,094)
Futures ............................................................. -- (124)
Written options ..................................................... -- 327
Foreign currency related transactions ............................... -- 221
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments ........................ 257,163 2,417
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................... $327,948 $105,491
====================================================================================================================================
* Income attributable to securities lending activity, net of rebate, for GE S&S
Program Mutual Fund and GE S&S Income Fund was $73 and $1,314 respectively.
- --------
See Notes to Financial Statements.
29
STATEMENTS OF CHANGES
IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 2004 AND 2003 (AMOUNTS IN THOUSANDS)
GE S&S
PROGRAM GE S&S
MUTUAL FUND INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................................... $ 70,785 $ 47,387 $ 103,074 $ 105,042
Net realized gain (loss) on investments, futures,
written options, foreign currency related
transactions and swaps ............................... 158,300 (32,428) 41,087 54,788
Net increase (decrease) in unrealized
appreciation/(depreciation) on investments,
futures, written options, foreign currency
related translations ................................. 98,863 738,386 (38,670) (50,042)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase from operations ............................ 327,948 753,345 105,491 109,788
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................................... (70,448) (48,130) (103,821) (109,430)
Net realized gains ...................................... (39,126) -- (42,061) (22,046)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS ........................................ (109,574) (48,130) (145,882) (131,476)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations
and distributions ....................................... 218,374 705,215 (40,391) (21,688)
- ------------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares ............................ 209,251 226,863 145,939 161,262
Value of distributions reinvested ....................... 100,741 44,098 139,059 128,850
Cost of shares redeemed ................................. (313,497) (198,392) (257,625) (294,194)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from share transactions ............ (3,505) 72,569 27,373 (4,082)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .................... 214,869 777,784 (13,018) (25,770)
NET ASSETS
Beginning of year .......................................... 3,939,274 3,161,490 2,614,617 2,640,387
- ------------------------------------------------------------------------------------------------------------------------------------
END OF YEAR ................................................ $4,154,143 $3,939,274 $2,601,599 $2,614,617
====================================================================================================================================
UNDISTRIBUTED NET INVESTMENT INCOME, END OF YEAR .............. $ 434 $ 418 $ 3,670 $ 3,318
- ------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN FUND SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold by subscription ................................... 4,809 6,030 12,476 13,638
Shares issued for distributions reinvested .................... 2,222 1,041 11,970 10,903
Shares redeemed ............................................... (7,201) (5,310) (21,984) (24,889)
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN FUND SHARES ........................ (170) 1,761 2,462 (348)
====================================================================================================================================
- ----------
See Notes to Financial Statements.
30
Notes to Financial Statements
December 31, 2004
1. ORGANIZATION OF THE FUNDS
The GE S&S Program Mutual Fund and GE S&S Income Fund (formerly named GE S&S
Long Term Interest Fund) are registered under the Investment Company Act of
1940, as amended, (the "1940 Act") as open-end management investment companies.
The Funds are two of the investment options offered under the GE Savings &
Security Program (the "Program"). The Program, through a trust, owns 63% of the
GE S&S Program Mutual Fund and 69% of the GE S&S Income Fund. The Funds operate
as Employees' Securities Companies (as defined in the 1940 Act) and as such are
exempt from certain provisions of the 1940 Act.
GE Asset Management Incorporated (GEAM) is the Funds' investment adviser and a
wholly-owned subsidiary of General Electric Company.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions at the date of the financial statements. Actual
results may differ from those estimates.
The following summarizes the significant accounting policies of the Funds:
SECURITY VALUATION AND TRANSACTIONS
Securities for which exchange quotations are readily available are valued at the
last sale price, or if no sales occurred on that day, at the last quoted bid
price. Securities listed on the NASDAQ will be valued at the NASDAQ's official
close price. Certain fixed income securities are valued by a dealer or by a
pricing service based upon a matrix system, which considers market transactions
as well as dealer supplied valuations. Short-term investments maturing within
sixty days are valued at amortized cost or original cost plus accrued interest,
both of which approximate current value. If quotations are not readily available
for a portfolio security, or if it is believed that the price or quotation for a
portfolio security does not represent its fair value, the security may be valued
using procedures approved by the Funds' Board of Trustees that are designed to
more accurately reflect the "fair value" of that portfolio security. An affected
portfolio security held by any Fund could be valued using these procedures.
Security transactions are accounted for as of the trade date. Realized gains and
losses on investments sold are recorded on the basis of identified cost for both
financial statement and federal tax purposes.
REPURCHASE AGREEMENTS
Each of the Funds may enter into repurchase agreements. The Funds' custodian
takes possession of the collateral pledged for investments in repurchase
agreements on behalf of the Funds. The Funds value the underlying collateral
daily on a mark-to-market basis to determine that the value, including accrued
interest, is at least equal to 102% of the repurchase price. In the event the
seller defaults and the value of the security declines, or if the seller enters
an insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
SECURITY LENDING
Each of the Funds may loan securities to brokers, dealers, and financial
institutions determined by GEAM to be creditworthy, subject to certain
limitations. The Funds continue to receive the interest and dividends on the
loaned securities during the term of the loan. The loans of securities are
secured by collateral in the form of cash or other liquid assets, which are
segregated and maintained with the custodian in an amount at least equal to 102%
of the current market value of the loaned securities. During the term of the
loan, the Funds will record any gain or loss in the market value of its loaned
securities and of securities in which cash collateral is invested. A Fund will
also earn interest, net of any rebate, from securities in which cash collateral
is invested. In the event the
31
Notes to Financial Statements
December 31, 2004
counterparty (borrower) does not meet its contracted obligation to return the
securities, the Funds may be exposed to the risk of loss of reacquiring the
loaned securities at prevailing market prices using the proceeds of the sale of
the collateral.
FOREIGN CURRENCY
Accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
are translated into U.S. dollars at the prevailing rates of exchange at year
end. Purchases and sales of securities, income receipts and expense payments
denominated in foreign currencies are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of such transactions.
The Funds do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates from the fluctuations arising from
changes in market prices of securities during the year. Such fluctuations are
included in net realized or unrealized gain or loss from investments. Net
realized gains or losses on foreign currency transactions represent net gains or
losses on sales and maturities of foreign currency contracts, disposition of
foreign currencies, the difference between the amount of net investment income
and withholding taxes accrued and the U.S. dollar amount actually received and
paid, and gains or losses between the trade and settlement date on purchases and
sales of securities. Net unrealized foreign exchange gains and losses arising
from changes in the value of other assets and liabilities as a result of changes
in foreign exchange rates are included as increases or decreases in unrealized
appreciation/depreciation on foreign currency related transactions.
FUTURES CONTRACTS
The GE S&S Income Fund may invest in futures contracts subject to certain
limitations. The Fund may invest in futures contracts to manage its exposure to
the stock and bond markets and fluctuations in currency values. Buying futures
tends to increase a Fund's exposure to the underlying instrument while selling
futures tends to decrease a Fund's exposure to the underlying instrument, or
hedge other Fund investments. The Fund will not enter into a transaction
involving futures for speculative purposes. The Fund's risks in using these
contracts include changes in the value of the underlying instruments,
non-performance of the counterparties under the contracts' terms and changes in
the liquidity of the secondary market for the contracts. Futures contracts are
valued at the settlement price established each day by the board of trade or
exchange on which they principally trade.
Upon entering into a financial futures contract, the Fund is required to pledge
to the broker an amount of cash and/or other assets equal to a certain
percentage of the contract amount, known as initial margin deposit. Subsequent
payments, known as variation margin, are made or received by the Fund each day,
depending on the daily fluctuation in the fair value of the underlying security.
The Fund records an unrealized gain or loss equal to the daily variation margin.
Should market conditions move unexpectedly, the Fund may not achieve the
anticipated benefits of the futures contracts and may incur a loss. The Fund
recognizes a realized gain or loss on the expiration or closing of a futures
contract.
OPTIONS
The GE S&S Income Fund may purchase and write options, subject to certain
limitations. The Fund may invest in options contracts to manage its exposure to
the stock and bond markets and fluctuations in foreign currency values. Writing
puts and buying calls tend to increase a Fund's exposure to the underlying
instrument while buying puts and writing calls tend to decrease a Fund's
exposure to the underlying instrument, or hedge other Fund investments. The Fund
will not enter
32
Notes to Financial Statements
December 31, 2004
into a transaction involving options for speculative purposes. The Fund's risks
in using these contracts include changes in the value of the underlying
instruments, non-performance of the counterparties under the contracts' terms
and changes in the liquidity of the secondary market for the contracts. Options
are valued at the last sale price, or if no sales occurred on that day, at the
last quoted bid price.
When a Fund writes an option, the amount of the premium received is recorded as
a liability and is subsequently adjusted to the current fair value of the option
written. Premiums received from writing options that expire unexercised are
treated by the Funds on the expiration date as realized gains from investments.
The difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the closing
purchase, as a realized loss. When an option is exercised, the proceeds from the
sale of the underlying security or the cost basis of the securities purchased is
adjusted by the original premium received or paid.
SWAP CONTRACTS
As part of its investment strategy, the GE S&S Income Fund may invest in swap
agreements which are agreements to exchange the return generated by one
instrument for the return generated by another instrument. Total return swap
agreements involve commitments to pay interest in exchange for a market linked
return based upon a notional principal amount. To the extent the total return of
the security or index underlying the agreement exceeds or falls short of the
offsetting interest rate obligation, the Fund will receive a payment from or
make a payment to the counterparty. Swaps are marked to market daily based upon
the underlying security or index. Payments received or made are recorded as
realized gain or loss in the Statement of Operations. Entering into swap
agreements involves, to varying degrees, elements of credit and market risk in
excess of the amounts recognized on the Statement of Assets and Liabilities.
Such risks involve the possibility that there will be no liquid market for these
agreements, that the counterparty to the agreements may default on its
obligation to perform and that there may be unfavorable changes in the value of
the index or securities underlying the agreement. Notional principal amounts are
used to express the extent of involvement in these transactions, but the amounts
potentially subject to credit risk are much smaller.
WHEN-ISSUED SECURITIES AND
FORWARD COMMITMENTS
Each of the Funds may purchase or sell securities on a when-issued or forward
commitment basis. These transactions are arrangements in which the Funds
purchase and sell securities with payment and delivery scheduled a month or more
after entering into the transactions. The price of the underlying securities and
the date when these securities will be delivered and paid for are fixed at the
time the transaction is negotiated. Losses may arise due to changes in the
market value of the underlying securities or if the counterparty does not
perform under the contract. In connection with such purchases, the Funds
maintain cash or liquid assets in an amount equal to purchase commitments for
such underlying securities until settlement date and for sales commitments the
Funds maintain equivalent deliverable securities as "cover" for the transaction.
Unsettled commitments are valued at the current market value of the underlying
security. Daily fluctuations in the value of such contracts are recorded as
unrealized gains or losses. The Funds will not enter into such commitments for
the purpose of investment leverage.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The GE S&S Income Fund may enter into forward foreign currency exchange
contracts to facilitate transactions in foreign denominated securities and
33
Notes to Financial Statements
December 31, 2004
to manage the Fund's currency exposure. Forward foreign currency exchange
contracts are valued at the mean between the bid and the offered forward rates
as last quoted by a recognized dealer. The aggregate principal amounts of the
contracts are not recorded in the Fund's financial statements. Such amounts
appear under the caption forward foreign currency contracts in the Schedule of
Investments. Fluctuations in the value of the contracts are recorded in the
Statement of Assets and Liabilities as an asset (or liability) and in the
Statement of Operations as unrealized appreciation (depreciation) until the
contracts are closed, when they are recorded as realized gains or losses on
foreign currency related transactions. The Fund's risks in using these contracts
include changes in the value of foreign currency or the possibility that the
counterparties do not perform under the contracts' terms. When a Fund enters
into a forward foreign currency exchange contract, it is required to segregate
cash or liquid securities with its custodian in an amount equal to the value of
the Fund's total assets committed to the consummation of the forward contract.
If the value of the segregated securities declines, additional cash or
securities is segregated so that the value of the account will equal the amount
of the Fund's commitment with respect to the contract.
INCOME TAXES
(DOLLARS IN THOUSANDS)
The Funds intend to comply with all sections of the Internal Revenue Code
applicable to regulated investment companies including the distribution of
substantially all of their taxable net investment income and net realized
capital gains to their shareholders. Therefore, no provision for federal income
tax has been made. Each Fund is treated as a separate taxpayer for federal
income tax purposes.
At December 31, 2004, information on the tax components of capital is as
follows:
NET TAX UNREALIZED
COST OF GROSS TAX GROSS TAX APPRECIATION/
INVESTMENTS UNREALIZED UNREALIZED (DEPRECIATION)
FOR TAX PURPOSES APPRECIATION DEPRECIATION ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $3,665,127 $654,245 $(142,348) $511,897
GE S&S Income Fund 3,407,164 33,523 (34,789) (1,266)
NET TAX APPRECIATION/ POST
(DEPRECIATION) ON OCTOBER
DERIVATIVES, CURRENCY UNDISTRIBUTED UNDISTRIBUTED LOSSES
AND OTHER NET ASSETS ORDINARY INCOME LONG-TERM GAINS (SEE DETAIL BELOW)
- ------------------------------------------------------------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $ -- $ 434 $ -- $ --
GE S&S Income Fund 839 10,168 710 (2,673)
34
Notes to Financial Statements
December 31, 2004
As of December 31, 2004, each Fund has no capital loss carryover. During the
year ended December 31, 2004, GE S&S Program Mutual Fund utilized approximately
$121,989 of capital loss carryover.
The Funds elected to defer losses incurred after October 31, 2004 as follows:
FUND CAPITAL CURRENCY
- --------------------------------------------------------------------------------
GE S&S Income Fund $ 2,673 $ --
The tax composition of distributions paid (other than return of capital
distributions for the year) during the year ended December 31, 2004 was as
follows:
ORDINARY LONG-TERM
FUND INCOME CAPITAL GAINS TOTAL
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $ 70,769 $38,805 $109,574
GE S&S Income Fund 118,856 27,026 145,882
DISTRIBUTIONS TO SHAREHOLDERS
GE S&S Income Fund declares investment income dividends daily and pays them
monthly. The GE S&S Program Mutual Fund declares and pays dividends from
investment income annually. The Funds declare and pay net realized capital gains
in excess of capital loss carryforwards distributions annually. The character of
income and gains to be distributed is determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include (but are not limited to) swaps and treatment of
realized gains and losses on foreign currency contracts. Reclassifications are
made to the Funds' capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations. These reclassifications have no impact on net investment income,
realized gains or losses, or net asset value of the Funds. The calculation of
net investment income per share in the Financial Highlights table excludes these
adjustments.
INVESTMENT INCOME
Corporate actions (including cash dividends)
are recorded on the ex-dividend date, net of applicable withholding taxes,
except for certain foreign corporate actions, which are recorded as soon after
ex-dividend date as such information becomes available. Interest income is
recorded on the accrual basis. All discounts and premiums on taxable bonds are
accreted to call or maturity date, whichever is shorter, using the effective
yield method.
EXPENSES
Expenses of the Funds which are directly identifiable to a specific Fund are
allocated to that Fund. Expenses which are not directly identifiable to a
specific Fund are allocated in such a manner as deemed equitable, taking into
consideration the nature and type of expense and the relative sizes of the
Funds. All expenses of the Funds are paid by GEAM, and reimbursed by the Funds.
TRANSFER AGENT CONVERSION EXPENSES
On September 18, 2004, the Funds changed its Transfer Agent from Boston
Financial Data Services (BFDS) to PFPC Inc. (PFPC). PFPC has agreed to pay for
certain conversion expenses incurred by GEAM for the entire GEAM Mutual Fund
complex. As of December 31, 2004, PFPC paid $230,859 (total dollars not in
thousands) of those conversion expenses related to the Funds.
3. LINE OF CREDIT
Effective December 15, 2004, and expiring December 14, 2005, the Funds share a
revolving credit facility of up to $25 million with a number of their
affiliates. The credit facility is with their custodian bank, State Street Bank
and Trust Company. The revolving credit facility requires the payment of a
commitment fee equal to 0.09% per annum on the daily unused portion of the
credit facility, payable quarterly. The portion borne by
35
Notes to Financial Statements
December 31, 2004
the Funds generally is borne proportionally based upon net assets. Generally,
borrowings under the credit facility would accrue interest at the Federal Funds
Rate plus 50 basis points and is borne by the borrowing Fund. The maximum amount
allowed to be borrowed by any one Fund is the lesser of its prospectus
limitation, 20% of its net assets, or $25 million. The credit facility was not
utilized by the Funds during the year ended December 31, 2004.
4. AMOUNTS PAID TO AFFILIATES
ADVISORY AND ADMINISTRATION EXPENSES
During 2004, the Funds incurred expenses for the cost of services rendered by
GEAM as investment adviser and for services GEAM rendered as shareholder
servicing agent. These expenses are included as advisory and administration
expenses and shareholder servicing agent expense in the Statements of
Operations. The Trustees received no compensation as trustees for the Funds.
Effective January 1, 2002, General Electric Capital International Services,
("GECIS") began performing certain accounting and certain administration
services not provided by GEAM. For the year ending December 31, 2004, $48,579
was charged to the GE S&S Program Mutual Fund and $33,582 to the GE S&S Income
Fund. Administrative services not performed by GEAM or GECIS were provided by an
unaffiliated service provider.
5. INVESTMENT TRANSACTIONS
(DOLLARS IN THOUSANDS)
PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from sales of investments, other than
short-term securities and options, for the year ended December 31, 2004, were as
follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $1,086,040 $1,137,438
GE S&S Income Fund 9,980,810 9,823,299
OPTIONS
During the year ended December 31, 2004, the following option contracts were
written:
S&S INCOME FUND
--------------------------------------------------------
NUMBER
OF CONTRACTS PREMIUM
- --------------------------------------------------------------------------------
Balance as of
December 31, 2003 -- $ --
Written 13,056 3,888
Closed and Expired (10,920) (3,060)
- --------------------------------------------------------------------------------
Balance as of
December 31, 2004 2,136 $ 828
- --------------------------------------------------------------------------------
SWAP CONTRACTS
There were no open swap transactions held by the Funds as of December 31, 2004.
SECURITY LENDING
At December 31, 2004, the following Fund participated in securities lending:
LOANED SECURITIES
AT MARKET VALUE
(INCLUDING CASH
ACCRUED INTEREST) COLLATERAL
- --------------------------------------------------------------------------------
GE S&S Program
Mutual Fund $ 20,255 $ 20,691
GE S&S Income Fund 267,686 272,382
36
Report of Independent Registered
Public Accounting Firm
KPMG
THE BOARD OF TRUSTEES AND SHAREHOLDERS
GE S&S FUNDS:
We have audited the accompanying statements of assets and liabilities of GE S&S
Program Mutual Fund and GE S&S Income Fund, including the schedules of
investments, as of December 31, 2004, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended and financial highlights for each of the
years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 2004 by correspondence with
the custodian and other appropriate audit procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of GE S&S
Program Mutual Fund and GE S&S Income Fund as of December 31, 2004, and the
results of their operations, the changes in their net assets and their financial
highlights for each of the years in the five-year period then ended, in
conformity with U.S. generally accepted accounting principles.
KPMG LLP
Boston, Massachusetts
February 23, 2005
37
Tax Information, unaudited
During the calendar year ended December 31, 2004, the following funds paid to
shareholders of record on December 28, 2004 the following long-term capital gain
dividends reported on Forms 1099-DIV for 2004:
FUND PER SHARE AMOUNT
--------------------------------------------------------------
GE S&S Program Mutual Fund $0.43900
GE S&S Income Fund $0.12236
For the calendar year ended December 31, 2004 certain dividends paid by the fund
may be subject to a maximum income tax rate of 15%, as provided for by the Jobs
and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid from
net investment income during the fiscal year ended December 31, 2004, the
following represent the percentage that may be considered qualified dividend
income:
FUND QUALIFIED DIVIDEND INCOME
--------------------------------------------------------------
GE S&S Program Mutual Fund 100.00%
38
Additional Information, unaudited
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS:
The business and affairs of the Company are managed under
the direction of the Company's Board of Directors. Information pertaining to the
Directors and officers of the Company is set forth below.
INTERESTED TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
JOHN H. MYERS
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 59
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 18 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS President, Chief Executive Officer
and Director of GEAM since 1997, Director of GEAM since 1988, and Executive Vice
President of GEAM - Fixed Income and Alternative Investments from 1988-1996;
President, Chief Executive Officer and Director of GEIC from 1997-2000 (when
GEIC was merged into GEAM), Director of GEIC from 1987-2000, Executive Vice
President - Fixed Income and Alternative Investments of GEIC from 1986-1996.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Hilton Hotels Corporation since 2000; Laffer
Investments since 2000; The Pebble Beach Company since 1999; GE Capital
Services, Inc. since 1997; Building with Books since 2000; The Pension Managers
Advisory Committee of the New York Stock Exchange since 1997; The Warburg Pincus
Advisory Board since 1995; He is also a Trustee of Wagner College and Trustee of
Elfun Funds and General Electric Pension Trust since 1986.
- --------------------------------------------------------------------------------
DAVID B. CARLSON
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 47
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 1 year
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President, Domestic
Equities of GEAM since September 2003, Senior Vice President, Domestic Equities
of GEAM from 1989 to 2003.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General Electric
Pension Trust since 2003.
- --------------------------------------------------------------------------------
MICHAEL J. COSGROVE
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 55
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 17 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS President, GE Asset Management
Services division ("GEAMS") of GE Financial Assurance Holdings, Inc., an
indirect wholly-owned subsidiary of General Electric Company ("GE"), since
February 1997; Vice President, GE Capital Corporation, an indirect wholly-owned
subsidiary of GE, since December 1999; Executive Vice President - Mutual Funds
of GEAM, a wholly-owned subsidiary of GE that is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended, since March 1993;
Director of GEAM since 1988.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 49
OTHER DIRECTORSHIPS HELD BY TRUSTEE Chairman of the Board and Chief
Executive Officer of GE Retirement Services, Inc., since 1998; Chairman of the
Board and President of GE Funds since 1993 and GE Institutional Funds, GE
LifeStyle Funds and GE Investments Funds, Inc. since 1997; Trustee of Elfun
Funds and General Electric Pension Trust since 1988; Chairman of the Board of GE
Private Asset Management Funds, Inc. (formerly Centurion Funds, Inc.) since
December 2001; Director of Centurion Capital Management Corp., Centurion Capital
Group Inc., Centurion Trust Company, Centurion Financial Advisers Inc.,
Centurion-Hinds Investment Management Corp. and Centurion-Hesse Investment
Management Corp. since December 2001; Trustee of Fordham University since 2003
and Marymount College from 1994 through 2002.
- --------------------------------------------------------------------------------
ALAN M. LEWIS
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 58
POSITION(S) HELD WITH FUND Trustee and Secretary
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 17 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President, General
Counsel and Secretary of GEAM since 1987
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 49
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee and Executive
Vice President of GE Funds since 1993 and GE Institutional Funds and GE
LifeStyle Funds since 1997. Director of GE Investments Funds, Inc. since 2001;
Trustee of Elfun Funds and General Electric Pension Trust since 1987.
39
Additional Information, unaudited
- --------------------------------------------------------------------------------
RALPH R. LAYMAN
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 49
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 13 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President -
International Equity Investments of GEAM since 1993; Executive Vice President -
International Equity Investments of GEIC from 1993-2000 (when GEIC was merged
into GEAM); Senior Vice President - International Equity Investments of GEAM and
GEIC from 1991 until 1993; Executive Vice President, Partner and Portfolio
Manager of Northern Capital Management from 1989-1991; and prior thereto, Vice
President and Portfolio Manager of Templeton Investment Counsel.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General
Electric Pension Trust since 1993
- --------------------------------------------------------------------------------
ROBERT A. MACDOUGALL
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 56
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 9 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Executive Vice President - Fixed
Income and Director of GEAM since 1997; Executive Vice President - Fixed Income
and Director of GEIC from 1997-2000 (when GEIC was merged into GEAM); Senior
Vice President - Taxable Fixed Income of GEAM and GEIC from 1990-1996.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General
Electric Pension Trust since 1997
- --------------------------------------------------------------------------------
DONALD W. TOREY
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 48
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 11 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Director of GEAM since 1993;
Executive Vice President - Alternative Investments of GEAM since 1997; Director
of GEIC from 1993-2000 (when GEIC was merged into GEAM); Executive Vice
President - Alternative Investments of GEIC from 1997-2000; Executive Vice
President - Finance and Administration of GEAM and GEIC from 1993 to 1997;
Manager - Mergers and Acquisitions Finance for GE from 1989-1993; Vice President
- - Private Placements of GEIC from 1988-1989.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General
Electric Pension Trust since 1993
- --------------------------------------------------------------------------------
JOHN J. WALKER
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 51
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 5 years
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Chief Financial Officer of GEAM
since 1999; Chief Financial Officer of GEIC from 1999-2000 (when GEIC was merged
into GEAM); Chief Financial Officer of GE Capital - Global Consumer Finance from
1996-1999; Chief Financial Officer of GE Capital - Commercial Finance from 1992
to 1996; Finance Director of GE Capital - TIFC from 1988-1992.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General
Electric Pension Trust since 1999
40
Additional Information, unaudited
- --------------------------------------------------------------------------------
JUDITH A. STUDER
- --------------------------------------------------------------------------------
ADDRESS c/o GEAM 3001 Summer St. Stamford, CT 06905
AGE 52
POSITION(S) HELD WITH FUND Trustee
TERM OF OFFICE AND LENGTH OF TIME SERVED Until successor is elected and
qualified - 1 year
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS Senior Vice President -
International Equities of GEAM since 1995; Senior Vice President - Domestic
Equities of GEAM from 1991-1995; Vice President of Domestic Equities from
1987-1991.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE 8
OTHER DIRECTORSHIPS HELD BY TRUSTEE Trustee of Elfun Funds and General
Electric Pension Trust since 2004
- --------------------------------------------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES
You may request without charge a description of the Trust's policies and
procedures for voting proxies related to the Funds' portfolio securities by
calling 1-800-242-0134. You may also view a description of those policies and
procedures on the Funds' website at http://www.gefunds.com or on the SEC's
website at http://www.sec.gov.
41
GE S&S Mutual Funds' Investment Team
INVESTMENT ADVISER
GE Asset Management Incorporated
PROGRAM TRUSTEES AND OFFICERS OF THE INVESTMENT ADVISER
John H. Myers, TRUSTEE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, GE ASSET
MANAGEMENT INCORPORATED
David B. Carlson, TRUSTEE, EXECUTIVE VICE PRESIDENT, DOMESTIC EQUITIES
Michael J. Cosgrove, TRUSTEE, EXECUTIVE VICE PRESIDENT, CHIEF COMMERCIAL OFFICER
Ralph R. Layman, TRUSTEE, EXECUTIVE VICE PRESIDENT, INTERNATIONAL EQUITIES
Alan M. Lewis, TRUSTEE, EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
Robert A. MacDougall, TRUSTEE, EXECUTIVE VICE PRESIDENT, FIXED INCOME
Donald W. Torey, TRUSTEE, EXECUTIVE VICE PRESIDENT, ALTERNATIVE INVESTMENTS AND
REAL ESTATE
John J. Walker, TRUSTEE, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
Judith A. Studer, TRUSTEE, SENIOR VICE PRESIDENT, INTERNATIONAL EQUITIES
Kathryn Karlic, EXECUTIVE VICE PRESIDENT, FIXED INCOME
PORTFOLIO MANAGERS
GE S&S PROGRAM MUTUAL FUND
Team led by David B. Carlson
GE S&S INCOME FUND
Team led by Robert A. MacDougall*
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
KPMG LLP
* As of January 29, 2005, Paul M. Colonna assumed responsibility as lead
portfolio manager for the Fund.
CUSTODIAN
State Street Bank & Trust Company
SHAREHOLDER SERVICING AGENT
Address all inquiries INSIDE the Program to:
GE S&SP Transaction Processing Center
P.O. Box 44079
Jacksonville, FL 32231-4079
Address all inquiries OUTSIDE the Program to:
GE Funds c/o PFPC, Inc.
P.O. Box 9838
Providence, RI 02940
Shareholder Services
DAILY VALUE, YIELDS/PERFORMANCE: 1-800-843-3359
INSIDETHE SAVINGS & SECURITY PROGRAM
Shares or units held INSIDE the Program have been credited to your account
as a result of contributions and investment earnings. For a statement
summarizing your account balance in the Program, please refer to Your
Personal Share statement (a copy of which may be obtained at the web site
listed below) or GE Savings and Security Program Annual Statement. You may
obtain additional information and process account transactions on
investments held INSIDE the Program by calling:
GE S&SP TRANSACTION PROCESSING CENTER: 1-800-432-4313
OR VISIT BENEFITS.GE.COM
OUTSIDE THE SAVINGS & SECURITY PROGRAM
If shares of Program Mutual and Income Funds have been distributed to you
from the Program, information on these investments may be obtained by
calling:
GE ASSET MANAGEMENT-- SHAREHOLDER SERVICES: 1-800-242-0134
OR VISIT WWW.GEFUNDS.COM
43
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ITEM 2. CODE OF ETHICS.
Please refer to the Code of Ethics included in the following link:
www.ge.com/files/usa/en/commitment/social/integrity/downloads/english.pdf
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that both John R.
Costantino and William J. Lucas are designated as audit committee financial
experts for the Funds; and further that it is the finding of the Boards that
Messrs. Costantino and Lucas, the audit committee financial experts, qualify
as being 'independent' pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. The aggregate fees billed for each of the last two fiscal
years (the "Reporting Periods") for professional services rendered by the
Registrant's principal accountant (the "Auditor") for the audit of the
Registrant's annual financial statements, or services that are normally
provide by the Auditor in connection with the statutory and regulatory
filings or engagements for the Reporting Periods were $16,465 in 2003 and
$19,213 in 2004.
(b) AUDIT RELATED FEES. There were no fees billed by the Auditor for
assurance and related services that were related to the performance of the
audit for the Registrant during the Reporting Periods.
(c) TAX FEES. There were no fees billed for professional services
rendered by the Auditor for tax compliance, tax advice or tax planning for
the Registrant during the Reporting Periods.
(d) ALL OTHER FEES. There were no fees billed for products and services
provided by the Auditor, other than the services reported in paragraphs
(a) through (c) of this Item for the Registrant during the Reporting Periods.
(e) (1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES.
The Audit Committee of the S&S Funds (the "Funds") Board of
Trustees is responsible, among other things, for the appointment,
compensation and oversight of the work of the Fund's independent
accountants/auditors (the "Auditor"). As part of this responsibility and
to ensure that the Auditor's independence is not impaired, the Audit Committee
(1) pre-approves the audit and non-audit services provided to the Funds by
the Auditor, and (2) all non-audit services provided to the Funds' investment
adviser and covered affiliates (as defined in the Audit Committee Charter) that
provide ongoing services to the Funds if the services directly impact the
Funds' operations or financial reporting, in accordance with the Audit
Committee Charter. Following are excerpts from the Audit Committee Charter
that sets forth the pre-approval policies and procedures:
1. Selection and Pre-Approval of Auditor and Approval of Fees.
(i) The Audit Committee shall pre-approve the selection of the Auditor and
shall recommend for ratification the selection, retention or termination of the
Auditor by the full Board, including the independent Trustees/Directors, and,
in connection therewith, shall evaluate the independence of the Auditor,
including: (i) an evaluation of whether the Auditor provides any consulting
services to the Fund's investment adviser and the extent to which the Auditor
provides non-audit services to the Fund's investment adviser and certain other
affiliated service providers as defined in Section 2(f) below, which services
are not subject to the pre-approval requirements set forth in Section 4 below;
(ii) an evaluation of the extent to which the Auditor has any relationships
with the Fund or its affiliated persons that are brought to the attention of
the Audit Committee by the Auditor in accordance with applicable standards of
the Independence Standards Board ("ISB"), because, in the Auditor's
professional judgment, such relationships may reasonably be thought to bear
on the Auditor's independence with respect to the Fund; and (iii) monitoring
the Auditor's compliance with respect to the rotation requirements for the
lead and coordinating partners having primary responsibility for the Fund's
audits and any partner responsible for the reviewing the Fund's audits.
The Audit Committee shall review the Auditor's specific representations as
to its independence.
(b) The Audit Committee shall pre-approve and review the fees charged by
the Auditor for audit and non-audit services to be provided to the Fund and
certain affiliated service providers (as defined in Section 2(f) below) in
accordance with the pre-approval requirements set forth in Section 4 below.
The Fund shall provide for appropriate funding, as determined by the Audit
Committee, to compensate the Auditor for any authorized service provided to
the Fund.
2. Meetings with the Auditor. The Audit Committee shall meet with the
Auditor, including private meetings, prior to the commencement of substantial
work on the audit and following the conclusion of the audit, as well as such
other times as the Audit Committee shall deem necessary or appropriate. The
Auditor shall report directly to the Audit Committee. The Auditor shall
report at least annually, concerning the following and other pertinent matters:
(a) to review the arrangements for and scope of the annual audit and any
special audits;
(b) to provide the Auditor the opportunity to report to the Audit
Committee, on a timely basis, all critical accounting policies and practices
to be used;
(c) to discuss any matters of concern relating to the Fund's financial
statements, including: (i) any adjustments to such statements recommended by
the Auditor, or other results of said audit(s), and (ii) any alternative
treatments of financial information within GAAP that have been discussed with
Fund management, the ramifications of the use of such alternative disclosures
and treatments, and the treatment preferred by the Auditor;
(d) to provide the Auditor the opportunity to report to the Audit
Committee, on a timely basis, any material written communication between the
Auditor and Fund management, such as any management letter or schedule of
unadjusted differences;
(e) to discuss the opinion the Auditor has rendered regarding the Fund's
financial statements;
(f) to report all non-audit services that do not require Audit Committee
pre-approval and are provided to certain affiliated persons of the Fund,
including: (1) the Fund's investment adviser or sub-advisers (but excluding
any investment sub-adviser whose role is primarily portfolio management and
is overseen by the investment adviser), (2) the Fund's principal underwriter,
and (3) any entity controlling, controlled by, or under common control with
the investment adviser or principal underwriter, that provides "ongoing"
services to the Funds in accordance with the pre-approval requirements of
paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X (each, a "Covered Affiliate"
and collectively, "Covered Affiliates");
(g) to review, in accordance with current standards of ISB, all
relationships between the Auditor and the Fund or its affiliated persons that,
in the Auditor's professional judgment, may reasonably be thought to bear
on its independence, and to confirm, in light of such information, whether
the Auditor believes, in its professional judgment, that it may properly serve
as independent accountants/auditors with respect to the Fund;
(h) to consider the Auditor's comments with respect to the Fund's financial
policies, procedures and internal accounting controls and responses thereto by
the Fund's officers and Fund management, as well as other personnel;
(i) to investigate any improprieties or suspected improprieties in the
operations of the Fund to the extent necessary or appropriate in light of any
internal investigations by the Fund's officers and/or by officers or employees
of the Fund management of such improprieties;
(j) to receive periodic reports concerning regulatory changes and new
accounting pronouncements that significantly affect the value of the Fund's
assets and their financial reporting;
(k) to report on the Fund's qualification under Subchapter M of the Internal
Revenue Code, amounts distributed and reported to shareholders for Federal tax
purposes and the Fund's tax returns; and
(l) to provide the Auditor the opportunity to report on any other matter
that the Auditor deems necessary or appropriate to discuss with the Audit
Committee.
If the Auditor's report on the above-listed (and other pertinent)
matters is not made in person to the Audit Committee within 60 days following
the end of the Fund's fiscal year, the Auditor shall deliver a written report
to the Audit Committee concerning these matters within such 60 day period.
3. Change in Accounting Principles. The Audit Committee shall consider
the effect upon the Fund of any changes in accounting principles or practices
proposed by the Auditor or the Fund's officers.
4. Pre-Approval of Audit Related Services and Permissible Non-Audit
Services. The Audit Committee shall pre-approve both audit (including audit,
review, and attest) services and permissible non-audit services provided to
the Fund and, if the nature of the engagement relates directly to the
operations and financial reporting of the Fund, permissible non-audit services
provided to any Covered Affiliate.
The Audit Committee may determine to delegate the authority to grant
pre-approvals to one or more Audit Committee members, each acting on behalf
of the Audit Committee. In this event, the member of the Audit Committee so
delegated shall report each delegated pre-approval to the Audit Committee at
its next regularly scheduled meeting. The Audit Committee may also adopt and
follow, in lieu of explicit pre-approval described above, written policies
and procedures detailed as to the particular service, designed to safeguard
the continued independence of the Auditor, consistent with the requirements
of the Act and SEC regulations thereunder.
Notwithstanding the foregoing, the pre-approval requirement concerning
permissible non-audit services provided to the Fund or any Covered Affiliate
is waived if: (1) the aggregate amount of all such non-audit services provided
constitutes no more than five percent (5%) of the total amount of revenues paid
to the Auditor by the Fund and the Covered Affiliates during the fiscal year in
which the services are provided that would have to be pre-approved by the Audit
Committee, (2) the non-audit services were not recognized as non-audit services
at the time of the engagement, and (3) such non-audit services are promptly
brought to the attention of the Audit Committee and approved by the Audit
Committee or one or more designated members of the Audit Committee prior to the
completion of the audit.
5. Prohibited Activities of the Auditor. The Audit Committee shall confirm
with the Auditor that it is not performing contemporaneously (during the audit
and professional engagement period) non-audit services for the Fund that the
Audit Committee believes may taint the independence of the Auditor.
The Auditor will be responsible for informing the Audit Committee of whether it
believes that a particular non-audit service is permissible or prohibited
pursuant to applicable regulations and standards.
(2) PERCENTAGE OF SERVICES IN PARAGRAGHS (b) THROUGH (d) APPROVED BY AUDIT
COMMITTEE. No fees were charged during 2003 or 2004 for audit related, tax or
other services as indicated in sections (b) through (d) of this Item.
(f) Not applicable.
(g) NON-AUDIT FEES. The aggregate non-audit fees billed by the Auditor
for services rendered to the Registrant, and rendered to Service Affiliates,
for the Reporting Periods were $154,897 in 2003 and $334,355 in 2004.
(h) AUDITOR INDEPENDENCE. There were no non-audit services rendered to
Service Affiliates that were not pre-approved.
ITEM 5. Audit Committee of Listed Registrants
The Registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act.
The Registrant's audit committee members are: John R. Costantino,
William J. Lucas and Robert P. Quinn.
ITEM 6. Schedule of Investments.
Attached as part of ITEM 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Applicable only to Closed-End Management Investment Companies.
ITEM 8. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
Applicable only to Closed-End Management Investment Companies.
ITEM 9. Submission of Matters to a Vote of Security Holders.
No material changes.
ITEM 10. CONTROLS AND PROCEDURES.
The officers providing the certifications in this report in accordance
with Rule 30a-3 under the Investment Company Act of 1940 have concluded,
based on their evaluation of the registrant's disclosure controls and
procedures (as such term is defined in such rule), that such controls and
procedures are adequate and reasonably designed to achieve the purpose
described in paragraph (c) of such rule.
There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their last evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
(a) Not applicable.
(b) Attached hereto as Exhibit 1 and Exhibit 2 are the Certifications of
Michael J. Cosgrove and Robert Herlihy as principal executive officer and
principal financial officer, respectively, as required by Rule 30a-2 under
the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GENERAL ELECTRIC S&S PROGRAM MUTUAL FUND
By: /S/John H. Myers
John H. Myers
TRUSTEE, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
GE ASSET MANAGEMENT INCORPORATED
Date: March 08, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
By: /S/John H. Myers
John H. Myers
Chairman, S&S FUNDS
Date: March 08, 2005
By: /S/ROBERT HERLIHY
Robert Herlihy
TREASURER, S&S Program Mutual Fund
Date: March 08, 2005
EXHIBIT INDEX
(b)(1) Certifications of principal executive officer and
principal financial officer as required by Rule 30a-2 under the
Investment Company Act of 1940.
(b)(2) Certification of principal executive officer and
principal financial officer as required by Section 906 of the
Sarbanes-Oxley Act of 2002.