GE 2007 Annual Report Download - page 96

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94 ge 2007 annual report
Note 22
Shareowners’ Equity
(In millions) 2007 2006 2005
COMMON STOCK ISSUED $ 669 $ 669 $ 669
ACCUMULATED NONOWNER CHANGES
OTHER THAN EARNINGS
Balance at January 1 $ 3,254 $ 3,137 $ 8,156
Investment securities — net of deferred
taxes of $(510), $111 and $(307) (972) 297 (231)
Currency translation adjustments —
net of deferred taxes of $(1,319),
$(1,417) and $646 4,662 3,776 (4,315)
Cash fl ow hedges — net of deferred
taxes of $(213), $75 and $493 23 599 724
Benefi t plans — net of deferred
taxes of $860, $182 and $(159)
(a) 2,566 287 (217)
Reclassifi cation adjustments
Investment securities — net of deferred
taxes of $(375), $(279) and $(100) (512) (520) (206)
Currency translation adjustments (135) (127) (3)
Cash fl ow hedges — net of deferred
taxes of $(119), $(60) and $(494) (562) (376) (771)
Cumulative effect of change in
accounting principle — net of
deferred taxes of $(2,715) — (3,819) —
Balance at December 31
(b)
$ 8,324 $ 3,254 $ 3,137
OTHER CAPITAL
Balance at January 1 $ 25,486 $ 25,227 $ 24,265
Gains on treasury stock dispositions
and other
(c) 614 259 962
Balance at December 31
$ 26,100 $ 25,486 $ 25,227
RETAINED EARNINGS
Balance at January 1(d) $106,867 $ 96,926 $ 89,853
Net earnings 22,208 20,742 16,720
Dividends
(c) (11,713) (10,675) (9,647)
Balance at December 31
$117,362 $106,993 $ 96,926
COMMON STOCK HELD IN TREASURY
Balance at January 1 $ (24,893) $ (17,326) $ (12,762)
Purchases
(c) (14,913) (10,512) (6,868)
Dispositions (c) 2,910 2,945 2,304
Balance at December 31
$ (36,896) $ (24,893) $ (17,326)
TOTAL EQUITY
Balance at December 31 $115,559 $111,509 $108,633
(a) For 2007, included $(3,122) million of prior service costs for plan amendments, $494
million of amortization of prior service costs, $4,666 million of gains (losses) arising
during the year and $528 million of amortization of gains (losses) — net of deferred
taxes of $(2,482) million, $339 million, $2,639 million and $364 million, respectively.
(b) At December 31, 2007, included additions of equity of $625 million related to
hedges of our investments in fi nancial services subsidiaries that have functional
currencies other than the U.S. dollar and reductions of $668 million related to cash
fl ow hedges of forecasted transactions, of which we expect to transfer $94 million
to earnings as an expense in 2008 along with the earnings effects of the related
forecasted transaction.
(c) Total dividends and other transactions with shareowners reduced equity by
$23,102 million in 2007, $17,983 million in 2006 and $13,249 million in 2005.
(d) The 2007 opening balance change refl ects cumulative effect of changes in
accounting principles of $(49) million related to adopting FIN 48 and $(77) million
related to adoption of FSP FAS 13-2.
At December 31, 2007 and 2006, the aggregate statutory capital
and surplus of the insurance activities totaled $2.2 billion and
$2.1 billion, respectively. Accounting practices prescribed by
statutory authorities are used in preparing statutory statements.
In December 2004, our Board of Directors authorized a three-
year, $15 billion share repurchase program, expanded that
program in 2005 to $25 billion and extended it in July 2007 to
$27 billion. In December 2007, our Board approved a new three-
year, $15 billion share repurchase program. Under these share
repurchase programs, on a book basis we repurchased 357.9 million
shares for a total of $13.9 billion during 2007.
Common shares issued and outstanding are summarized in
the following table.
SHARES OF GE COMMON STOCK
December 31 (In thousands) 2007 2006 2005
Issued 11,145,252 11,145,212 11,145,212
In treasury (1,157,653) (867,839) (660,944)
Outstanding
9,987,599 10,277,373 10,484,268
GE has 50 million authorized shares of preferred stock ($1.00 par
value), but has not issued any such shares as of December 31, 2007.
Note 23
Other Stock-Related Information
We grant stock options, restricted stock units (RSUs) and perfor-
mance share units (PSUs) to employees under the 2007 Long-Term
Incentive Plan. This plan replaces the 1990 Long-Term Incentive
Plan. In addition, we grant options and RSUs in limited circum-
stances to consultants, advisors and independent contractors
(primarily non-employee talent at NBC Universal) under a plan
approved by our Board of Directors in 1997 (the consultants’ plan).
There are outstanding grants under one shareowner-approved
option plan for non-employee directors. Share requirements for
all plans may be met from either unissued or treasury shares.
Stock options expire 10 years from the date they are granted
and vest over service periods that range from one to fi ve years.
RSUs give the recipients the right to receive shares of our stock
upon the lapse of their related restrictions. Restrictions on RSUs
lapse in various increments and at various dates, beginning after
one year from date of grant through grantee retirement. Although
the plan permits us to issue RSUs settleable in cash, we have only
issued RSUs settleable in shares of our stock. PSUs give recipients
the right to receive shares of our stock upon the achievement of
certain performance targets.
All grants of GE options under all plans must be approved by
the Management Development and Compensation Committee,
which consists entirely of independent directors.