GE 2005 Annual Report Download - page 4

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(4)
After considering the staff’ s view, management recommended to the Audit Committee of our Board of
Directors that previously reported financial results be restated to eliminate hedge accounting for the interest rate
swaps entered into as part of our commercial paper hedging program from January 1, 2001. The Audit Committee
discussed and agreed with this recommendation. At a meeting on January 18, 2007, the Board of Directors adopted
the recommendation of the Audit Committee and determined that previously reported results for GE should be
restated and, therefore, that the previously filed financial statements and other financial information referred to
above should not be relied upon. The restatement resulted from a material weakness in internal control over
financial reporting, namely, that we did not have adequately designed procedures to designate, with the specificity
required under SFAS 133, each hedged commercial paper transaction.
As of January 1, 2007, we modified our commercial paper hedging program and adopted documentation for
interest rate swaps that we believe complies with the requirements of SFAS 133 and remediated the related internal
control weakness.
The SEC investigation into our application of SFAS 133 and hedge accounting is continuing. We continue
to cooperate fully.
Amendment to this Form 10-K
The following sections of this Form 10-K have been revised to reflect the restatement: Part I – Item 1 – Business;
Part II – Item 6 – Selected Financial Data, Item 7 – Management’ s Discussion and Analysis of Financial Condition
and Results of Operations, Item 7A – Quantitative and Qualitative Disclosures About Market Risk; Item 8 –
Financial Statements and Supplementary Data and Item 9A – Controls and Procedures; and Part IV – Item 15 –
Exhibits and Financial Statement Schedules. Except to the extent relating to the restatement of our financial
statements and other financial information described above, the financial statements and other disclosures in this
Form 10-K do not reflect any events that have occurred after this Form 10-K was initially filed on March 3, 2006.
Effects of Restatement
The following tables set forth the effects of the restatement relating to the aforementioned hedge accounting on
affected line items within our previously reported Statements of Earnings for the years 2005, 2004, 2003, 2002 and
2001, and for each of the quarters in the years 2005 and 2004. The restatement has no effect on our cash flows or
liquidity, and its effects on our financial position at the ends of the respective restated periods are immaterial.