GE 2005 Annual Report Download - page 90

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(90)
At December 31, 2005, minimum rental commitments under noncancelable operating leases aggregated $2,779
million and $4,039 million for GE and GECS, respectively. Amounts payable over the next five years follow.
(In millions) 2006 2007 2008 2009 2010
GE $ 596 $ 499 $ 408 $ 330 $ 285
GECS 778 679 582 521 388
GE’ s selling, general and administrative expenses totaled $13,279 million in 2005, $12,001 million in 2004 and
$9,870 million in 2003.
Note 6
Retiree Health and Life Benefits
We sponsor a number of retiree health and life insurance benefit plans (retiree benefit plans). Principal retiree
benefit plans are discussed below; other such plans are not significant individually or in the aggregate.
PRINCIPAL RETIREE BENEFIT PLANS provide health and life insurance benefits to employees who retire
under the GE Pension Plan with 10 or more years of service. Eligible retirees share in the cost of healthcare benefits.
Effective January 1, 2005, we amended our principal retiree benefit plans to provide that, upon retirement of salaried
employees who commenced service after that date, such retirees will pay in full for their participation in the GE
retiree health benefit plans. These plans cover approximately 240,000 retirees and dependents.
The effect on operations of principal retiree benefit plans follows.
COST OF PRINCIPAL RETIREE BENEFIT PLANS
(In millions) 2005
2004 2003
Expected return on plan assets $(138) $ (149 ) $ (159 )
Service cost for benefits earned 243 210 307
Interest cost on benefit obligation 507 518 535
Prior service cost 326 298 191
Net actuarial loss recognized 70 60 127
Retiree benefit plans cost $1,008 $ 937 $ 1,001
ACTUARIAL ASSUMPTIONS. The discount rates at December 31 were used to measure the year-end benefit
obligations and the earnings effects for the subsequent year. Actuarial assumptions used to determine benefit
obligations and earnings effects for principal retiree benefit plans follow.
ACTUARIAL ASSUMPTIONS
December 31 2005 2004 2003 2002
Discount rate(a)
5.25% 5.75% 6.00 % 6.75%
Compensation increases 5.00 5.00 5.00 5.00
Expected return on assets 8.50 8.50 8.50 8.50
Initial healthcare trend rate(b)
10.00 10.30 10.50 13.00
(a) Weighted average discount rates of 5.90% and 6.40% were used for determination of costs in 2004 and 2003, respectively.
(b) For 2005, gradually declining to 5% for 2015 and thereafter.