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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 811-05904
ELFUN MONEY MARKET FUND
(Exact name of registrant as specified in charter)
1600, SUMMER STREET, STAMFORD, CONNECTICUT, 06905
(Address of principal executive offices) (Zip code)
GE ASSET MANAGEMENT, INC.
1600, SUMMER STREET, STAMFORD, CONNECTICUT, 06905
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-242-0134
Date of fiscal year end: 12/31
Date of reporting period: 12/31/12
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| ITEM 1. | REPORTS TO STOCKHOLDERS |
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Elfun Funds
Annual Report
December 31, 2012
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| 1 | ||||
| Manager Reviews and Schedules of Investments |
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| 2 | ||||
| 9 | ||||
| 15 | ||||
| 38 | ||||
| 51 | ||||
| 66 | ||||
| 72 | ||||
| Financial Statements |
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| 74 | ||||
| 78 | ||||
| 80 | ||||
| 82 | ||||
| 84 | ||||
| 97 | ||||
| 98 | ||||
| 99 | ||||
| 102 | ||||
| 106 | ||||
| 109 | ||||
This report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current summary prospectus or prospectus.
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Ralph R. Layman
Executive Vice President and
Chief Investment Officer Emeritus
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| weakness in the Yen, caused by the incoming government’s determination to introduce inflation and better economic growth to this lagging economy. This has been of significant benefit to the exporting segment of the Japanese market and to interest rate-sensitive stocks, both of which have been added to the portfolio over the last several months. |
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Understanding Your Fund’s Expenses
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July 1, 2012 – December 31, 2012
| Account value at the beginning of the period ($) |
Account value at the end of the period ($) |
Expenses paid during the period ($)* |
||||||||||
| Actual Fund Return |
1,000.00 | 1,142.10 | 2.53 | |||||||||
| Hypothetical 5% Return |
1,000.00 | 1,022.77 | 2.39 | |||||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.47% (for the period July 1, 2012 - December 31, 2012), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
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| (a) | Ending value of a $10,000 investment for the ten-year period or since inception, whichever is less. |
| (b) | The securities information regarding holdings, allocations and other characteristics is presented to illustrate examples of securities that the Fund has bought and the diversity of areas in which the Fund may invest as of a particular date. It may not be representative of the Fund’s current or future investments and should not be construed as a recommendation to purchase or sell a particular security. |
| (c) | Fair Value basis is inclusive of short-term investment in GE Institutional Money Market Fund Investment Class. |
See Notes to Performance on page 1 for further information, including an explanation of Morningstar peer categories.
Past performance does not predict future performance. The performance shown on the graph and tables does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
5
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| Elfun International Equity Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
6
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| Elfun International Equity Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
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| Elfun International Equity Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
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up 48%, Discovery Communications up 55%, and Comcast, up 56%. The financial sector was a detractor to performance primarily because the Fund did not own enough of the strong performing sector. The financial sector makes up 15% of the S&P 500 Index and 12.9% of Elfun Trusts. The Fund’s financial holdings were up 23% versus a gain of 29% for the benchmark.
Other notable performers were Monsanto, up 37%, aided by higher grain prices, and the retailer Lowes, up 43% on a better outlook for housing in the U.S.
| Q. | Were there any significant changes to the Fund during the period? |
| A. | Once again, changes to the portfolio were relatively modest during the year. Portfolio turnover remained low at 11%. We continue to invest with a long term time horizon. The number of stocks held at year-end was 46, down slightly from a year ago. The characteristics we seek in the Fund’s holdings are above-average growth, financial strength and solid management. The Fund’s holdings are global leaders in their industries. Technology remains a large overweight, but we are tilted towards software and internet services. Consumer discretionary is also an overweight, with emphasis on media and retail. Healthcare made up 14% of the portfolio and remains a modest overweight. In healthcare, we look for strong new product pipelines that can drive growth. |
Growth is a theme across stock selection in all Fund sectors. We believe the developed economies will continue to be burdened with excess debt, fiscal austerity and tax hikes. Growth will likely, in our view, be slow. Finding above-average growth companies at reasonable valuation levels remains our primary investment philosophy.
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Understanding Your Fund’s Expenses
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July 1, 2012 – December 31, 2012
| Account value at the beginning of the period ($) |
Account value at the end of the period ($) |
Expenses paid during the period ($)* |
||||||||||
| Actual Fund Return |
1,000.00 | 1,077.80 | 0.78 | |||||||||
| Hypothetical 5% Return |
1,000.00 | 1,024.38 | 0.76 | |||||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.15% (for the period July 1, 2012 - December 31, 2012), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
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| (a) | Ending value of a $10,000 investment for the ten-year period or since inception, whichever is less. |
| (b) | The securities information regarding holdings, allocations and other characteristics is presented to illustrate examples of securities that the Fund has bought and the diversity of areas in which the Fund may invest as of a particular date. It may not be representative of the Fund’s current or future investments and should not be construed as a recommendation to purchase or sell a particular security. |
| (c) | Fair Value basis is inclusive of short-term investment in GE Institutional Money Market Fund Investment Class. |
See Notes to Performance on page 1 for further information, including an explanation of Morningstar peer categories.
Past performance does not predict future performance. The performance shown on the graph and tables does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
12
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| Elfun Trusts | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
13
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| Elfun Trusts | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
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Understanding Your Fund’s Expenses
18
July 1, 2012 – December 31, 2012
| Account value at the beginning of the period ($) |
Account value at the end of the period ($) |
Expenses paid during the period ($)* |
||||||||||
| Actual Fund Return |
1,000.00 | 1,060.90 | 2.33 | |||||||||
| Hypothetical 5% Return |
1,000.00 | 1,022.82 | 2.29 | |||||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.45% (for the period July 1, 2012 - December 31, 2012), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
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| (a) | Ending value of a $10,000 investment for the ten-year period or since inception, whichever is less. |
| (b) | The securities information regarding holdings, allocations and other characteristics is presented to illustrate examples of securities that the Fund has bought and the diversity of areas in which the Fund may invest as of a particular date. It may not be representative of the Fund’s current or future investments and should not be construed as a recommendation to purchase or sell a particular security. |
| (c) | Fair Value basis is inclusive of short-term investment in GE Institutional Money Market Fund Investment Class. |
See Notes to Performance on page 1 for further information, including an explanation of Morningstar peer categories.
Past performance does not predict future performance. The performance shown on the graph and tables does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
19
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
20
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
21
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
22
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
23
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
24
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
25
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
26
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
27
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
28
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
29
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
30
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
31
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
32
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
33
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
34
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
35
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
36
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| Elfun Diversified Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
37
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39
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Understanding Your Fund’s Expenses
40
July 1, 2012 – December 31, 2012
| Account value at the beginning of the period ($) |
Account value at the end of the period ($) |
Expenses paid during the period ($)* |
||||||||||
| Actual Fund Return |
1,000.00 | 1,033.30 | 0.82 | |||||||||
| Hypothetical 5% Return |
1,000.00 | 1,024.33 | 0.81 | |||||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.16% (for the period July 1, 2012 - December 31, 2012), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
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(Unaudited)
| (a) | Ending value of a $10,000 investment for the ten-year period or since inception, whichever is less. |
| (b) | The securities information regarding holdings, allocations and other characteristics is presented to illustrate examples of securities that the Fund has bought and the diversity of areas in which the Fund may invest as of a particular date. It may not be representative of the Fund’s current or future investments and should not be construed as a recommendation to purchase or sell a particular security. |
See Notes to Performance on page 1 for further information, including an explanation of Morningstar peer categories.
Past performance does not predict future performance. The performance shown on the graph and tables does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
41
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
42
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
43
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
44
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
45
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
46
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
47
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
48
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
49
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| Elfun Tax-Exempt Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
50
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(Unaudited)
William M. Healey
Senior Vice President and Chief Investment Officer — Core Fixed Income
Mark H. Johnson
Senior Vice President and Chief Investment Officer — Insurance and Long Duration
Vita Marie Pike
Senior Vice President and Chief Investment Officer — Fixed Income Risk Assets
51
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| Q. | Were there any significant changes to the Fund during the period? |
| A. | The Fund’s exposure to high yield and emerging market debt which began the year at 8% and 5%, respectively, was reduced in the first quarter to 4% and 3% and remained there throughout the balance of the year. We also pared the overweight in commercial MBS from 4% to 1% versus a 2% benchmark weight in the first quarter. We initiated a 4% overweight position in agency MBS in May, which was brought back to index neutral in August. The allocation to investment grade credit was reduced to a 4% underweight in August and remained there through year end. While tactically traded throughout the year, the Fund’s duration positioning was biased long versus the benchmark during the first three months then kept relatively neutral to the benchmark before reduced to nearly 0.5 years short of the index in October. |
52
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Understanding Your Fund’s Expenses
July 1, 2012 — December 31, 2012
| Account value at the beginning of the period ($) |
Account value at the end of the period ($) |
Expenses paid during the period ($)* |
||||||||||
| Actual Fund Return |
1,000.00 | 1,022.50 | 1.02 | |||||||||
| Hypothetical 5% Return |
1,000.00 | 1,024.13 | 1.02 | |||||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.20% (for the period July 1, 2012 - December 31, 2012), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
53
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| (a) | Ending value of a $10,000 investment for the ten-year period or since inception, whichever is less. |
| (b) | The securities information regarding holdings, allocations and other characteristics is presented to illustrate examples of securities that the Fund has bought and the diversity of areas in which the Fund may invest as of a particular date. It may not be representative of the Fund’s current or future investments and should not be construed as a recommendation to purchase or sell a particular security. |
| (c) | Fair Value basis is inclusive of short-term investment in GE Institutional Money Market Fund Investment Class. |
See Notes to Performance on page 1 for further information, including an explanation of Morningstar peer categories.
Past performance does not predict future performance. The performance shown on the graph and tables does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
54
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
55
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
56
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
57
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
58
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
59
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
60
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
61
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
62
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
63
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
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| Elfun Income Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
65
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Michael E. Martini
Vice President
66
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67
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Understanding Your Fund’s Expenses
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July 1, 2012 – December 31, 2012
| Account value at the beginning of the period ($) |
Account value at the end of the period ($) |
Expenses paid during the period ($)* |
||||||||||
| Actual Fund Return |
1,000.00 | 1,000.00 | 0.90 | |||||||||
| Hypothetical 5% Return |
1,000.00 | 1,024.23 | 0.92 | |||||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.18% (for the period July 1, 2012 - December 31, 2012), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
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| † | The seven day current yield, rather than the total return, more closely reflects the current earnings of the Money Market Fund at December 31, 2012. |
| * | iMoneyNet’s IBC’s Money Fund report provides average yield for all major money market funds. |
| (a) | Ending value of a $10,000 investment for the ten-year period or since inception, whichever is less. |
| (b) | The securities information regarding holdings, allocations and other characteristics is presented to illustrate examples of securities that the Fund has bought and the diversity of areas in which the Fund may invest as of a particular date. It may not be representative of the Fund’s current or future investments and should not be construed as a recommendation to purchase or sell a particular security. |
See Notes to Performance on page 1 for further information, including an explanation of Morningstar peer categories.
Past performance does not predict future performance. The performance shown on the graph and tables does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
An investment in the Elfun Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any other Government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per unit, it is possible to lose money by investing in the Fund.
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| Elfun Money Market Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
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| Elfun Money Market Fund | (in thousands) — December 31, 2012 |
See Notes to Schedules of Investments and Notes to Financial Statements.
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(In thousands) — December 31, 2012
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(In thousands) — December 31, 2012
| †† | Security traded on different exchanges. |
| * | Less than 0.05% |
| ** | Principal amount or Fair Value is less than $500. |
Abbreviations:
| ADR | — | American Depositary Receipt | ||||
| AGC | — | Assured Guaranty Corporation | ||||
| AGMC | — | Assured Guaranty Municipal Company | ||||
| AMBAC | — | AMBAC Indemnity Corporation | ||||
| FGIC | — | Financial Guaranty Insurance Corporation | ||||
| FSA | — | Financial Security Assurance | ||||
| GDR | — | Global Depositary Receipt | ||||
| MBIA | — | Municipal Bond Investors Assurance Corporation | ||||
| REIT | — | Real Estate Investment Trust | ||||
| REMIC | — | Real Estate Mortgage Investment Conduit | ||||
| SPDR | — | Standard & Poor’s Depository Receipts | ||||
| STRIPS | — | Separate Trading of Registered Interest and Principal of Security | ||||
| TBA | — | To Be Announced |
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Selected data based on a unit outstanding during the fiscal years indicated
| Elfun International Equity Fund | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
| Inception date |
— | — | — | — | 1/1/88 | |||||||||||||||
| Net asset value, beginning of year |
$15.43 | $18.92 | $18.24 | $14.65 | $28.32 | |||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||
| Net investment income |
0.35 | 0.44 | 0.36 | 0.43 | 0.77 | |||||||||||||||
| Net realized and unrealized |
2.88 | (3.48 | ) | 0.69 | 3.63 | (13.26 | ) | |||||||||||||
| Total income (loss) from investment operations |
3.23 | (3.04 | ) | 1.05 | 4.06 | (12.49 | ) | |||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
0.35 | 0.44 | 0.37 | 0.44 | 0.74 | |||||||||||||||
| Net realized gains |
— | — | — | 0.03 | 0.44 | |||||||||||||||
| Return of capital |
0.00 | * | 0.01 | — | — | — | ||||||||||||||
| Total distributions |
0.35 | 0.45 | 0.37 | 0.47 | 1.18 | |||||||||||||||
| Net asset value, end of year |
$18.31 | $15.43 | $18.92 | $18.24 | $14.65 | |||||||||||||||
| TOTAL RETURN (a) |
20.95 | % | (16.02 | )% | 5.77 | % | 27.69 | % | (44.15 | )% | ||||||||||
| RATIOS/SUPPLEMENTAL DATA: |
||||||||||||||||||||
| Net assets, end of year (in thousands) |
$260,728 | $240,572 | $309,473 | $301,332 | $248,781 | |||||||||||||||
| Ratios to average net assets: |
||||||||||||||||||||
| Net investment income |
1.98 | % | 2.34 | % | 2.05 | % | 2.66 | % | 3.10 | % | ||||||||||
| Net expenses |
0.45 | %(b) | 0.30 | %(b) | 0.32 | %(b) | 0.27 | %(b) | 0.44 | %(b) | ||||||||||
| Gross expenses |
0.45 | % | 0.31 | % | 0.34 | % | 0.28 | % | 0.45 | % | ||||||||||
| Portfolio turnover rate |
47 | % | 39 | % | 42 | % | 45 | % | 41 | % | ||||||||||
| Elfun Trusts | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
| Inception date |
— | — | — | — | 5/27/35 | |||||||||||||||
| Net asset value, beginning of year |
$ 40.35 | $41.38 | $38.50 | $30.23 | $48.73 | |||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||
| Net investment income |
0.77 | 0.48 | 0.40 | 0.35 | 0.49 | |||||||||||||||
| Net realized and unrealized |
7.77 | 0.06 | 4.64 | 9.83 | (17.35 | ) | ||||||||||||||
| Total income (loss) from investment operations |
8.54 | 0.54 | 5.04 | 10.18 | (16.86 | ) | ||||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
0.76 | 0.48 | 0.41 | 0.37 | 0.49 | |||||||||||||||
| Return of Capital |
— | — | — | 0.03 | 0.02 | |||||||||||||||
| Net realized gains |
4.07 | 1.09 | 1.75 | 1.51 | 1.13 | |||||||||||||||
| Total distributions |
4.83 | 1.57 | 2.16 | 1.91 | 1.64 | |||||||||||||||
| Net asset value, end of year |
$ 44.06 | $40.35 | $41.38 | $38.50 | $30.23 | |||||||||||||||
| TOTAL RETURN (a) |
21.27 | % | 1.33 | % | 13.07 | % | 33.62 | % | (34.53 | )% | ||||||||||
| RATIOS/SUPPLEMENTAL DATA: |
||||||||||||||||||||
| Net assets, end of year (in thousands) |
$1,820,262 | $1,647,396 | $1,731,716 | $1,639,896 | $1,314,686 | |||||||||||||||
| Ratios to average net assets: |
||||||||||||||||||||
| Net investment income |
1.60 | % | 1.09 | % | 1.00 | % | 1.05 | % | 1.10 | % | ||||||||||
| Net expenses |
0.19 | %(b) | 0.21 | %(b) | 0.21 | %(b) | 0.23 | %(b) | 0.21 | %(b) | ||||||||||
| Gross expenses |
0.19 | % | 0.21 | % | 0.22 | % | 0.24 | % | 0.22 | % | ||||||||||
| Portfolio turnover rate |
11 | % | 16 | % | 14 | % | 8 | % | 20 | % | ||||||||||
The accompanying Notes are an integral part of these financial statements.
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Selected data based on a unit outstanding during the fiscal years indicated
| Elfun Diversified Fund | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
| Inception date |
— | — | — | — | 1/1/88 | |||||||||||||||
| Net asset value, beginning of year |
$16.53 | $17.41 | $16.08 | $13.41 | $19.80 | |||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||
| Net investment income |
0.33 | 0.38 | 0.28 | 0.29 | 0.42 | |||||||||||||||
| Net realized and unrealized |
1.78 | (0.83) | 1.32 | 2.68 | (6.41) | |||||||||||||||
| Total income (loss) from investment operations |
2.11 | (0.45) | 1.60 | 2.97 | (5.99) | |||||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
0.34 | 0.43 | 0.27 | 0.30 | 0.40 | |||||||||||||||
| Net realized gains |
— | — | — | 0.00 | * | — | ||||||||||||||
| Total distributions |
0.34 | 0.43 | 0.27 | 0.30 | 0.40 | |||||||||||||||
| Net asset value, end of year |
$18.30 | $16.53 | $17.41 | $16.08 | $13.41 | |||||||||||||||
| TOTAL RETURN (a) |
12.77 | % | (2.60) | % | 9.98 | % | 22.13 | % | (30.23) | % | ||||||||||
| RATIOS/SUPPLEMENTAL DATA: |
||||||||||||||||||||
| Net assets, end of year (in thousands) |
$213,168 | $210,095 | $229,881 | $220,654 | $191,347 | |||||||||||||||
| Ratios to average net assets: |
||||||||||||||||||||
| Net investment income |
1.75 | % | 2.11 | % | 1.76 | % | 1.98 | % | 2.35 | % | ||||||||||
| Net expenses |
0.46 | %(b) | 0.40 | %(b) | 0.48 | %(b) | 0.43 | %(b) | 0.31 | %(b) | ||||||||||
| Gross expenses |
0.47 | % | 0.41 | % | 0.75 | % | 0.47 | % | 0.33 | % | ||||||||||
| Portfolio turnover rate |
173 | % | 197 | % | 148 | % | 142 | % | 180 | % | ||||||||||
| Elfun Tax-Exempt Income Fund | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
| Inception date |
— | — | — | — | 1/1/80 | |||||||||||||||
| Net asset value, beginning of year |
$11.97 | $11.33 | $11.64 | $10.73 | $11.54 | |||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||
| Net investment income |
0.51 | 0.53 | 0.53 | 0.53 | 0.53 | |||||||||||||||
| Net realized and unrealized |
0.37 | 0.64 | (0.31) | 0.91 | (0.81) | |||||||||||||||
| Total income from investment operations |
0.88 | 1.17 | 0.22 | 1.44 | (0.28) | |||||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
0.51 | 0.53 | 0.53 | 0.53 | 0.53 | |||||||||||||||
| Net realized gains |
0.02 | — | — | — | — | |||||||||||||||
| Total distributions |
0.53 | 0.53 | 0.53 | 0.53 | 0.53 | |||||||||||||||
| Net asset value, end of year |
$12.32 | $11.97 | 11.33 | $11.64 | $10.73 | |||||||||||||||
| TOTAL RETURN (a) |
7.45 | % | 10.57 | % | 1.86 | % | 13.64 | % | (2.51) | % | ||||||||||
| RATIOS/SUPPLEMENTAL DATA: |
||||||||||||||||||||
| Net assets, end of year (in thousands) |
$1,785,176 | $1,730,904 | $1,677,925 | $1,776,803 | $1,623,597 | |||||||||||||||
| Ratios to average net assets: |
||||||||||||||||||||
| Net investment income |
4.18 | % | 4.56 | % | 4.54 | % | 4.66 | % | 4.72 | % | ||||||||||
| Net expenses |
0.18 | % | 0.19 | % | 0.19 | % | 0.18 | % | 0.12 | % | ||||||||||
| Gross expenses |
0.18 | % | 0.19 | % | 0.19 | % | 0.18 | % | 0.12 | % | ||||||||||
| Portfolio turnover rate |
28 | % | 31 | % | 26 | % | 33 | % | 37 | % | ||||||||||
The accompanying Notes are an integral part of these financial statements.
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Selected data based on a unit outstanding during the fiscal years indicated
| Elfun Income Fund | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
| Inception date |
— | — | — | — | 12/31/84 | |||||||||||||||
| Net asset value, beginning of year |
$ 11.58 | $11.18 | $10.73 | $10.35 | $11.09 | |||||||||||||||
| Income (loss) from investment operations: |
||||||||||||||||||||
| Net investment income |
0.26 | 0.39 | 0.36 | 0.43 | 0.52 | |||||||||||||||
| Net realized and unrealized gains (losses) on investments |
0.42 | 0.48 | 0.52 | 0.38 | (0.74) | |||||||||||||||
| Total income from investment operations |
0.68 | 0.87 | 0.88 | 0.81 | (0.22) | |||||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
0.26 | 0.38 | 0.43 | 0.43 | 0.52 | |||||||||||||||
| Net realized gains |
0.35 | 0.09 | — | — | — | |||||||||||||||
| Total distributions |
0.61 | 0.47 | 0.43 | 0.43 | 0.52 | |||||||||||||||
| Net asset value, end of year |
$ 11.65 | $11.58 | $11.18 | $10.73 | $10.35 | |||||||||||||||
| TOTAL RETURN (a) |
5.94 | % | 7.87 | % | 8.31 | % | 8.04 | % | (2.01) | % | ||||||||||
| RATIOS/SUPPLEMENTAL DATA: |
||||||||||||||||||||
| Net assets, end of year (in thousands) |
$364,407 | $363,029 | $350,325 | $338,481 | $328,913 | |||||||||||||||
| Ratios to average net assets: |
||||||||||||||||||||
| Net investment income |
2.20 | % | 3.39 | % | 3.34 | % | 4.15 | % | 4.88 | % | ||||||||||
| Net expenses |
0.23 | %(b) | 0.24 | %(b) | 0.23 | %(b) | 0.24 | %(b) | 0.16 | %(b) | ||||||||||
| Gross expenses |
0.25 | % | 0.26 | % | 0.27 | % | 0.27 | % | 0.20 | % | ||||||||||
| Portfolio turnover rate |
402 | % | 438 | % | 357 | % | 320 | % | 451 | % | ||||||||||
| Elfun Money Market Fund | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
| Inception date |
— | — | — | — | 6/13/90 | |||||||||||||||
| Net asset value, beginning of year |
$ 1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||
| Income from investment operations: |
||||||||||||||||||||
| Net investment income |
— | 0.00 | * | 0.00 | * | 0.00 | * | 0.03 | ||||||||||||
| Total income from investment operations |
— | 0.00 | * | 0.00 | * | 0.00 | * | 0.03 | ||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
— | 0.00 | * | 0.00 | * | 0.00 | * | 0.03 | ||||||||||||
| Total distributions |
— | 0.00 | * | 0.00 | * | 0.00 | * | 0.03 | ||||||||||||
| Net asset value, end of year |
$ 1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||
| TOTAL RETURN (a) |
0.00 | % | 0.07 | % | 0.15 | %(c) | 0.42 | % | 2.57 | % | ||||||||||
| RATIOS/SUPPLEMENTAL DATA: |
||||||||||||||||||||
| Net assets, end of year (in thousands) |
$164,529 | $177,378 | $207,108 | $244,564 | $285,389 | |||||||||||||||
| Ratios to average net assets: |
||||||||||||||||||||
| Net investment income |
— | % | 0.01 | % | 0.06 | % | 0.43 | % | 2.57 | % | ||||||||||
| Net expenses |
0.18 | %** | 0.23 | %** | 0.26 | %** | 0.24 | %** | 0.19 | %** | ||||||||||
| Gross expenses |
0.32 | % | 0.32 | % | 0.28 | % | 0.24 | % | 0.19 | % | ||||||||||
Notes to Financial Highlights
| (a) | Total returns are historical and assume changes in share price, reinvestment of dividends and capital gains distributions and assume no sales charge. Past performance does not guarantee future results. |
| (b) | Reflects GEAM’s waiver of a portion of the Fund’s management expenses in an amount equal to the management fee earned by GEAM with respect to the Fund’s investment in an affiliated Money Market Fund managed by GEAM. |
| (c) | Total return is revised to correct an error in the total return calculation, which was determined not to be material to previously issued financial statements. |
| * | Less than 0.005 per share. |
| ** | GE Asset Management has voluntarily undertaken to reduce its management fee and/or subsidize certain expenses of the Fund to the extent necessary to maintain a minimum annualized yield of 0.00%. |
The accompanying Notes are an integral part of these financial statements.
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The accompanying Notes are an integral part of these financial statements.
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| ELFUN DIVERSIFIED FUND |
ELFUN TAX-EXEMPT INCOME FUND |
ELFUN INCOME FUND |
ELFUN MONEY MARKET FUND |
|||||||||
| $193,516 | $ | 1,773,397 | $ | 334,738 | $ | — | ||||||
| — | 18,577 | 25,496 | 164,144 | |||||||||
| 30,991 | — | 64,620 | — | |||||||||
| 50 | — | — | — | |||||||||
| — | — | — | — | |||||||||
| 472 | 24,126 | 1,687 | 83 | |||||||||
| 33 | 493 | 156 | 905 | |||||||||
| 236 | — | 65 | — | |||||||||
| 454 | 15 | 3 | 9 | |||||||||
| 225,752 | 1,816,608 | 426,765 | 165,141 | |||||||||
| — | 1,903 | 118 | — | |||||||||
| 11,656 | 28,395 | 61,939 | — | |||||||||
| 149 | 842 | 143 | 527 | |||||||||
| 20 | 116 | 17 | 5 | |||||||||
| 296 | 176 | 141 | 80 | |||||||||
| — | — | — | — | |||||||||
| 13 | — | — | — | |||||||||
| 450 | — | — | — | |||||||||
| 12,584 | 31,432 | 62,358 | 612 | |||||||||
| $213,168 | $ | 1,785,176 | $ | 364,407 | $ | 164,529 | ||||||
| 200,892 | 1,627,435 | 356,797 | 164,461 | |||||||||
| 13 |
70 | 296 | — | |||||||||
| (3,804) | (99 | ) | 72 | 68 | ||||||||
| 15,885 | 157,770 | 7,065 | — | |||||||||
| 194 | — | 177 | — | |||||||||
| (12) | — | — | — | |||||||||
| $213,168 | $ | 1,785,176 | $ | 364,407 | $ | 164,529 | ||||||
| 11,646 | 144,956 | 31,278 | 164,731 | |||||||||
| $ 18.30 | $ | 12.32 | $ | 11.65 | $ | 1.00 | ||||||
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The accompanying Notes are an integral part of these financial statements.
80
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| ELFUN DIVERSIFIED FUND |
ELFUN TAX-EXEMPT INCOME FUND |
ELFUN INCOME FUND |
ELFUN MONEY MARKET FUND |
|||||||||
| $3,158 | $ | — | $ | 13 | $ | — | ||||||
| 1,677 | 77,737 | 8,903 | 308 | |||||||||
| 17 | 1 | 43 | — | |||||||||
| (96) | — | — | — | |||||||||
| 4,756 | 77,738 | 8,959 | 308 | |||||||||
| 443 | 2,791 | 585 | 303 | |||||||||
| 9 | 17 | 12 | 20 | |||||||||
| 74 | 151 | 88 | 84 | |||||||||
| 391 | 87 | 136 | 75 | |||||||||
| 29 | 40 | 24 | 16 | |||||||||
| 72 | 165 | 76 | 56 | |||||||||
| 1,018 | 3,251 | 921 | 554 | |||||||||
| (33) | — | (80 | ) | (246 | ) | |||||||
| 985 | 3,251 | 841 | 308 | |||||||||
| 3,771 | 74,487 | 8,118 | — | |||||||||
| 7,485 | 9,831 | 14,203 | — | |||||||||
| 692 | — | (2,952 | ) | — | ||||||||
| 106 | — | — | — | |||||||||
| 13,558 | 43,097 | 1,138 | 100 | |||||||||
| 315 | — | 779 | — | |||||||||
| 7 | — | — | — | |||||||||
| 22,163 | 52,928 | 13,168 | 100 | |||||||||
| $25,934 | $ | 127,415 | $ | 21,286 | $ | 100 | ||||||
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82
The accompanying Notes are an integral part of these financial statements.
Table of Contents
| ELFUN DIVERSIFIED FUND |
ELFUN TAX-EXEMPT INCOME FUND |
ELFUN INCOME FUND |
ELFUN MONEY MARKET FUND |
|||||||||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||
| $ | 3,771 | $ | 4,708 | $ | 74,487 | $ | 76,130 | $ | 8,118 | $ | 12,138 | $ | — | $ | 11 | |||||||||||||||
| 8,283 | 7,408 | 9,831 | (3,028 | ) | 11,251 | 14,356 | — | 1 | ||||||||||||||||||||||
| 13,880 | (17,941 | ) | 43,097 | 93,947 | 1,917 | 631 | 100 | (100 | ) | |||||||||||||||||||||
| 25,934 | (5,825 | ) | 127,415 | 167,049 | 21,286 | 27,125 | 100 | (88 | ) | |||||||||||||||||||||
| (3,892 | ) | (5,284 | ) | (74,487 | ) | (76,130 | ) | (8,147 | ) | (11,915 | ) | — | (135 | ) | ||||||||||||||||
| — | — | (2,493 | ) | — | (10,695 | ) | (2,650 | ) | — | — | ||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||
| (3,892 | ) | (5,284 | ) | (76,980 | ) | (76,130 | ) | (18,842 | ) | (14,565 | ) | — | (135 | ) | ||||||||||||||||
| 22,042 | (11,109 | ) | 50,435 | 90,919 | 2,444 | 12,560 | 100 | (223 | ) | |||||||||||||||||||||
| 4,818 | 9,772 | 82,309 | 62,668 | 23,625 | 32,622 | 88,055 | 81,055 | |||||||||||||||||||||||
| 3,393 | 4,588 | 53,624 | 52,299 | 14,078 | 10,532 | — | 121 | |||||||||||||||||||||||
| (27,180 | ) | (23,037 | ) | (132,096 | ) | (152,907 | ) | (38,769 | ) | (43,010 | ) | (101,004 | ) | (110,683 | ) | |||||||||||||||
| (18,969 | ) | (8,677 | ) | 3,837 | (37,940 | ) | (1,066 | ) | 144 | (12,949 | ) | (29,507 | ) | |||||||||||||||||
| 3,073 | (19,786 | ) | 54,272 | 52,979 | 1,378 | 12,704 | (12,849 | ) | (29,730 | ) | ||||||||||||||||||||
| 210,095 | 229,881 | 1,730,904 | 1,677,925 | 363,029 | 350,325 | 177,378 | 207,108 | |||||||||||||||||||||||
| $ | 213,168 | $ | 210,095 | $ | 1,785,176 | $ | 1,730,904 | $ | 364,407 | $ | 363,029 | $ | 164,529 | $ | 177,378 | |||||||||||||||
| $ | 13 | $ | (7 | ) | $ | 70 | $ | — | $ | 295 | $ | 64 | $ | — | $ | — | ||||||||||||||
| 269 | 557 | 6,712 | 5,418 | 1,997 | 2,872 | 88,055 | 80,925 | |||||||||||||||||||||||
| 186 | 279 | 4,361 | 4,522 | 1,200 | 919 | — | 121 | |||||||||||||||||||||||
| (1,522 | ) | (1,324 | ) | (10,751 | ) | (13,390 | ) | (3,269 | ) | (3,782 | ) | (101,004 | ) | (110,681 | ) | |||||||||||||||
| (1,067 | ) | (488 | ) | 322 | (3,450 | ) | (72 | ) | 9 | (12,949 | ) | (29,635 | ) | |||||||||||||||||
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The following tables present the Funds’ investments measured at fair value on a recurring basis at December 31, 2012:
| (Dollars in thousands) | ||||||||||||||||||
| Fund | Investments | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Elfun International |
Investments in Securities † | |||||||||||||||||
| Common Stock | $ | 11,238 | $ | 237,309 | $ | — | $ | 248,547 | ||||||||||
| Preferred Stock | — | 4,815 | — | 4,815 | ||||||||||||||
| Short-Term Investments | 6,703 | — | — | 6,703 | ||||||||||||||
| Total Investments in Securities | $ | 17,941 | $ | 242,124 | $ | — | $ | 260,065 | ||||||||||
| Other Financial Instruments * | ||||||||||||||||||
| Futures Contracts — Unrealized Appreciation | $ | 145 | $ | — | $ | — | $ | 145 | ||||||||||
| Futures Contracts — Unrealized Depreciation | (14 | ) | — | — | (14 | ) | ||||||||||||
| Total Other Financial Instruments | $ | 131 | $ | — | $ | — | $ | 131 | ||||||||||
| Elfun Trusts |
Investments in Securities † | |||||||||||||||||
| Common Stock | $ | 1,768,581 | $ | — | $ | — | $ | 1,768,581 | ||||||||||
| Short-Term Investments | 51,166 | — | — | 51,166 | ||||||||||||||
| Total Investments in Securities | $ | 1,819,747 | $ | — | $ | — | $ | 1,819,747 | ||||||||||
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| (Dollars in thousands) | ||||||||||||||||||
| Fund | Investments | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Elfun Diversified Fund |
Investments in Securities † | |||||||||||||||||
| Domestic Equity | $ | 78,780 | $ | — | $ | — | $ | 78,780 | ||||||||||
| Foreign Equity | 3,617 | 34,148 | — | 37,765 | ||||||||||||||
| U.S. Treasuries | — | 21,113 | — | 21,113 | ||||||||||||||
| Agency Mortgage Backed | — | 20,284 | — | 20,284 | ||||||||||||||
| Agency CMOs | — | 530 | — | 530 | ||||||||||||||
| Asset Backed | — | 32 | — | 32 | ||||||||||||||
| Corporate Notes | — | 19,140 | — | 19,140 | ||||||||||||||
| Non-Agency CMOs | — | 1,958 | — | 1,958 | ||||||||||||||
| Sovereign Bonds | — | 1,032 | — | 1,032 | ||||||||||||||
| Municipal Notes and Bonds | — | 353 | — | 353 | ||||||||||||||
| Exchange Traded Funds | 11,836 | — | — | 11,836 | ||||||||||||||
| Preferred Stock | — | 693 | — | 693 | ||||||||||||||
| Short-Term Investments | 30,991 | — | — | 30,991 | ||||||||||||||
| Total Investments in Securities | $ | 125,224 | $ | 99,283 | $ | — | $ | 224,507 | ||||||||||
| Other Financial Instruments * | ||||||||||||||||||
| Futures Contracts — Unrealized Appreciation | $ | 251 | $ | — | $ | — | $ | 251 | ||||||||||
| Futures Contracts — Unrealized Depreciation | (57 | ) | — | — | (57 | ) | ||||||||||||
| Foreign Currency Forward Exchange Contracts — Unrealized Depreciation | (12 | ) | — | — | (12 | ) | ||||||||||||
| Total Other Financial Instruments | $ | 182 | $ | — | $ | — | $ | 182 | ||||||||||
| Elfun Tax-Exempt Income Fund |
Investments in Securities † | |||||||||||||||||
| Municipal Bonds and Notes | $ | — | $ | 1,773,397 | $ | — | $ | 1,773,397 | ||||||||||
| Short-Term Investments | — | 18,577 | — | 18,577 | ||||||||||||||
| Total Investments in Securities | $ | — | $ | 1,791,974 | $ | — | $ | 1,791,974 | ||||||||||
| Elfun Income Fund |
Investments in Securities † | |||||||||||||||||
| U.S. Treasuries | $ | — | $ | 97,569 | $ | — | $ | 97,569 | ||||||||||
| Agency Mortgage Backed | — | 111,150 | — | 111,150 | ||||||||||||||
| Agency CMOs | — | 3,024 | 3,024 | |||||||||||||||
| Asset Backed | — | 1,183 | — | 1,183 | ||||||||||||||
| Corporate Notes | — | 104,450 | — | 104,450 | ||||||||||||||
| Non-Agency CMOs | — | 10,852 | — | 10,852 | ||||||||||||||
| Sovereign Bonds | — | 4,511 | — | 4,511 | ||||||||||||||
| Municipal Notes and Bonds | — | 1,999 | — | 1,999 | ||||||||||||||
| Short-Term Investments | 64,620 | 25,496 | — | 90,116 | ||||||||||||||
| Total Investments in Securities | $ | 64,620 | $ | 360,234 | $ | — | $ | 424,854 | ||||||||||
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December 31, 2012
| (Dollars in thousands) | ||||||||||||||||||
| Fund | Investments | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Other Financial Instruments * | ||||||||||||||||||
| Futures Contracts — Unrealized Appreciation | $ | 457 | $ | — | $ | — | $ | 457 | ||||||||||
| Futures Contracts — Unrealized Depreciation | (280 | ) | — | — | (280 | ) | ||||||||||||
| Total Other Financial Instruments | $ | 177 | $ | — | $ | — | $ | 177 | ||||||||||
| Elfun Money Market |
Investments in Securities † | |||||||||||||||||
| U.S. Treasuries | $ | — | $ | 19,016 | $ | — | $ | 19,016 | ||||||||||
| U.S. Government Agency Obligations | — | 54,594 | — | 54,594 | ||||||||||||||
| Commercial Paper | — | 35,996 | — | 35,996 | ||||||||||||||
| Repurchase Agreements | — | 11,810 | — | 11,810 | ||||||||||||||
| Corporates | — | 12,358 | — | 12,358 | ||||||||||||||
| Certificates of Deposit | — | 30,200 | — | 30,200 | ||||||||||||||
| Time Deposit | — | 170 | — | 170 | ||||||||||||||
| Total Investments in Securities | $ | — | $ | 164,144 | $ | — | $ | 164,144 | ||||||||||
| † | See Schedule of Investments for Industry Classification |
| * | Other financial instruments include derivative instruments such as futures and forward exchange contracts. Amounts shown represent unrealized appreciation (depreciation), at period end. |
The following tables present the changes in Level 3 investments measured on a recurring basis for the period ended December 31, 2012 (Dollars in thousands):
| Elfun Money Market Fund | Corporates | Total | ||||||
| Balance at 12/31/11 |
$ | 3,501 | $ | 3,501 | ||||
| Accrued discounts/premiums |
(1 | ) | (1 | ) | ||||
| Realized gain (loss) |
— | — | ||||||
| Change in unrealized gain (loss) |
100 | 100 | ||||||
| Purchases |
— | — | ||||||
| Sales |
(3,600 | ) | (3,600 | ) | ||||
| Issuances |
— | — | ||||||
| Settlements |
— | — | ||||||
| Transfers into Level 3 |
— | — | ||||||
| Transfers out of Level 3 |
— | — | ||||||
| Balance at 12/31/12 |
$ | — | $ | — | ||||
| Change in unrealized depreciation relating to securities still held at 12/31/12 |
$ | — | $ | — | ||||
The Elfun International Equity Fund and the Elfun Diversified Fund utilized the fair value pricing service on December 31, 2012 due to events occurring after the close of foreign local markets and before the close of regular trading on the NYSE. This resulted in certain foreign securities being classified as Level 2 at the end of the period which were classified as Level 1 at December 31, 2011. The value of securities that were transferred to Level 2 from Level 1 as a result was $173,801 and $24,545, respectively (dollars in thousands).
There were no other transfers between Level 1 and Level 2. Transfers between fair value levels are considered to occur at the beginning of the period.
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| 4. | Derivatives Disclosure |
Shown below are the derivative contracts entered into by the Fund, summarized by primary risk exposure as they appear on the Statement of Assets and Liabilities, all of which are not accounted for as hedging instruments under FASB Accounting Standards Codification (“ASC”) No. 815 Derivatives and Hedging as of December 31, 2012:
| (Dollars in thousands): |
||||||||||||
|
Asset Derivatives December 31, 2012 |
Liability Derivatives December 31, 2012 |
|||||||||||
| Derivatives not accounted for as hedging instruments under ASC 815 |
Location in the Statements of Assets and Liabilities |
Fair Value ($) |
Location in the Statements of Assets and Liabilities |
Fair Value ($) |
||||||||
| Elfun International Equity Fund |
||||||||||||
| Equity Contracts |
Assets, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | 145 | * | Liabilities, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | (14 | )* | ||||||
| Elfun Diversified Fund |
||||||||||||
| Equity Contracts |
Assets, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | 136 | * | Liabilities, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | (6 | )* | ||||||
| Interest Rate Contracts |
Assets, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | 115 | * | Liabilities, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | (51 | )* | ||||||
| Foreign Currency Forward Exchange Contracts |
Assets, Net Assets — Net Unrealized Appreciation (Depreciation) on Foreign Currency Forward Exchange Contracts | — | Liabilities, Net Assets — Net Unrealized Appreciation (Depreciation) on Foreign Currency Forward Exchange Contracts | (13 | ) | |||||||
| Elfun Income Fund |
||||||||||||
| Interest Rate Contracts |
Assets, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | 457 | * | Liabilities, Net Assets — Net Unrealized Appreciation (Depreciation) on Futures | (280 | )* | ||||||
| * | Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported in the Schedule of Investments and within the components of the net assets section of the Statements of Assets and Liabilities. Only the current day’s variation margin is reported within the receivables and/or payables of the Statements of Assets and Liabilities. |
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December 31, 2012
Shown below are the effects of derivative instruments on each Fund’s Statement of Operation, summarized by primary risk exposure all of which are not accounted for as hedging instruments under ASC 815.
| Derivatives not accounted for as hedging instruments under ASC 815 |
Location in the Statements of Operations |
Total Notional Amount of Futures Contracts Purchased/(Sold) ($) |
Realized Gain (Loss) on Derivatives Recognized in Income ($) |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income ($) |
||||||||||
| Elfun International Equity Fund |
||||||||||||||
| Equity Contracts |
Realized gain (loss) on futures, Increase (decrease) in unrealized appreciation (depreciation) on Futures | 46,919/(48,012) | 136 | 49 | ||||||||||
| Elfun Diversified Fund |
||||||||||||||
| Equity Contracts |
Realized gain (loss) on futures, Increase (decrease) in unrealized appreciation (depreciation) on Futures | 58,542/(54,748) | 1,397 | 92 | ||||||||||
| Interest Rate Contracts |
Realized gain (loss) on futures, Increase (decrease) in unrealized appreciation (depreciation) on Futures | 159,585/(159,515) | (705 | ) | 223 | |||||||||
| Foreign Currency Forward Exchange Contracts |
Realized gain (loss) on futures, Increase (decrease) in unrealized appreciation (depreciation) on Foreign Currency Forward Exchange Contracts | 0/(7,335) | 106 | 7 | ||||||||||
| Elfun Income Fund |
||||||||||||||
| Interest Rate Contracts |
Realized gain (loss) on futures, Increase (decrease) in unrealized appreciation (depreciation) on Futures | 784,578/(773,980) | (2,952 | ) | 779 | |||||||||
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December 31, 2012
| 7. | Investment Transactions |
Purchases and Sales of Securities
The cost of purchases and the proceeds from sales of investments, other than short-term securities and short-term options, for the year ended December 31, 2012, were as follows:
| (Amounts in Thousands): | U.S. Government Securities | Other Securities | ||||||||||||||||
| Fund | Purchases | Sales | Purchases | Sales | ||||||||||||||
| Elfun International Equity Fund |
$ | — | $ | — | $ | 155,389 | $ | 136,820 | ||||||||||
| Elfun Trusts |
— | — | 188,125 | 351,429 | ||||||||||||||
| Elfun Diversified Fund |
227,214 | 216,744 | 108,233 | 140,265 | ||||||||||||||
| Elfun Tax-Exempt Income Fund |
— | — | 562,794 | 497,108 | ||||||||||||||
| Elfun Income Fund |
1,135,624 | 1,091,971 | 170,459 | 220,478 | ||||||||||||||
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December 31, 2012
At December 31, 2012, information on the tax components of capital was as follows:
| (Amounts in thousands) | ||||||||||||||||||||||||||||||||
| Gross Unrealized Tax | Net Tax Appreciation/ (Depreciation) |
Undistributed | ||||||||||||||||||||||||||||||
| Fund | Cost of Investments For Tax Purposes |
Appreciation | Depreciation | Investments | Derivatives/ Currency |
Income | Accumulated Capital Loss |
Late-Year Losses |
||||||||||||||||||||||||
| Elfun International Equity Fund |
$ | 225,921 | $ | 42,241 | $ | (8,097 | ) | $ | 34,144 | $ | 145 | $ | — | $ | (61,857 | ) | $ | — | ||||||||||||||
| Elfun Trusts |
1,310,222 | 541,446 | (31,921 | ) | 509,525 | — | 212 | — | — | |||||||||||||||||||||||
| Elfun Diversified Fund |
210,164 | 17,912 | (3,569 | ) | 14,343 | (5 | ) | — | (2,062 | ) | — | |||||||||||||||||||||
| Elfun Tax-Exempt Income Fund |
1,634,226 | 158,802 | (1,054 | ) | 157,748 | — | 70 | 12 | (90 | ) | ||||||||||||||||||||||
| Elfun Income Fund |
418,448 | 8,608 | (2,202 | ) | 6,406 | — | 1,204 | — | — | |||||||||||||||||||||||
| Elfun Money Market Fund |
164,144 | — | — | — | — | 68 | — | — | ||||||||||||||||||||||||
As of December 31, 2012, the following Funds have capital loss carryovers as indicated below. The capital loss carryover is available to offset future realized capital gains to the extent provided in the Internal Revenue Code and regulations thereunder. To the extent that these carryover losses are used to offset future capital gains, it is probable that the gains so offset will not be distributed to shareholders.
| Amounts (In thousands) | ||||||||||||
| Fund | Short-Term | Long-Term | Expires | |||||||||
| Elfun International Equity Fund |
$ | 33,349 | $ | — | 12/31/17 | |||||||
| 13,483 | — | 12/31/18 | ||||||||||
| 8,869 | 6,156 | N/A | ||||||||||
| Elfun Diversified Fund |
2,062 | — | 12/31/17 | |||||||||
These amounts will be available to offset future taxable capital gains. Under the Regulated Investment Company Modernization Act of 2010, the Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
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December 31, 2012
During the year ended December 31, 2012, the Funds utilized prior year capital loss carryovers as follows:
| Fund (Amounts in thousands) | Amount | |||
| Elfun Diversified Fund |
$ | 7,429 | ||
| Elfun Tax-Exempt Income Fund |
7,301 | |||
| Elfun Money Market Fund |
9 | |||
Any qualified late-year loss is deemed to arise on the first day of the Fund’s next tax year (if the Fund elects to defer such loss). Under this regime, generally, the Fund can elect to defer any post-October capital loss and/or any late-year ordinary loss as defined by the Internal Revenue Code.
The following Fund elected to defer qualified late-year losses for the year ended December 31, 2012 as follows:
| Fund (Amounts in thousands) | Capital | Ordinary | ||||||
| Elfun Tax-Exempt Income Fund |
$ | 90 | $ | — | ||||
The tax character of distributions paid during the year ended December 31, 2012, were as follows:
| Fund (Amounts in thousands) | Exempt Interest |
Ordinary Income |
Long-Term Capital Gains |
Return of Capital |
Total | |||||||||||||||
| Elfun International Equity Fund |
$ | — | $ | 4,895 | $ | — | $ | 12 | $ | 4,907 | ||||||||||
| Elfun Trusts |
— | 29,234 | 154,751 | — | 183,985 | |||||||||||||||
| Elfun Diversified Fund |
— | 3,892 | — | — | 3,892 | |||||||||||||||
| Elfun Tax-Exempt Income Fund |
72,267 | 2,220 | 2,493 | — | 76,980 | |||||||||||||||
| Elfun Income Fund |
— | 18,842 | — | — | 18,842 | |||||||||||||||
The tax composition of distributions paid during the year ended December 31, 2011, were as follows:
| Fund (In thousands) | Exempt Interest |
Ordinary Income |
Long-Term Capital Gains |
Return of Capital |
Total | |||||||||||||||
| Elfun International Equity Fund |
$ | — | $ | 6,736 | $ | — | $ | 199 | $ | 6,935 | ||||||||||
| Elfun Trusts |
— | 18,959 | 43,352 | — | 62,311 | |||||||||||||||
| Elfun Diversified Fund |
— | 5,284 | — | — | 5,284 | |||||||||||||||
| Elfun Tax-Exempt Income Fund |
74,163 | 1,967 | — | — | 76,130 | |||||||||||||||
| Elfun Income Fund |
— | 14,565 | — | — | 14,565 | |||||||||||||||
| Elfun Money Market Fund |
— | 135 | — | — | 135 | |||||||||||||||
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December 31, 2012
The reclassifications for the year ended December 31, 2012 were as follows:
| Fund (Amounts in thousands) | Undistributed Net Investment Income |
Accumulated Net Realized Gain (Loss) |
Capital paid In |
|||||||||
| Elfun International Equity Fund |
$ | (22 | ) | $ | 29 | $ | (7 | ) | ||||
| Elfun Trusts |
95 | (99 | ) | 4 | ||||||||
| Elfun Diversified Fund |
141 | (120 | ) | (21 | ) | |||||||
| Elfun Tax-Exempt Income Fund |
70 | (70 | ) | — | ||||||||
| Elfun Income Fund |
261 | (261 | ) | — | ||||||||
| Elfun Money Market Fund |
— | 77 | (77 | ) | ||||||||
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The Unitholders and Board of Trustees
Elfun Funds
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Elfun International Equity Fund, Elfun Trusts, Elfun Diversified Fund, Elfun Tax-Exempt Income Fund, Elfun Income Fund and Elfun Money Market Fund (collectively, the “Funds”), as of December 31, 2012, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit 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, 2012 by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. 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 the Elfun International Equity Fund, Elfun Trusts, Elfun Diversified Fund, Elfun Tax-Exempt Income Fund, Elfun Income Fund and Elfun Money Market Fund as of December 31, 2012, the results of its operations, changes in its net assets and financial highlights for each of the years described above, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
February 27, 2013
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For the year ended December 31, 2012
The following funds intend to make an election under Internal Revenue Code Section 853. The election will allow shareholders to treat their attributable share of foreign taxes paid by the Funds to be paid by them directly. For the fiscal year ended December 31, 2012, the total amount of income received by the Funds from sources within foreign countries and possessions of the United States and the total amount of taxes paid by the Funds follows:
| Total Foreign Source Income |
Total Foreign Taxes Paid |
|||||||
| Elfun International Equity Fund |
$ | 6,616,138 | $ | 513,702 | ||||
Of the dividends paid from net investment income by the Elfun Tax-Exempt Fund during the calendar year ended December 31, 2011, 97.02% represent exempt interest dividends for Federal income tax purposes.
For the year ended December 31, 2012, the Fund hereby designates as capital gain dividends the amounts set forth, or the amount ultimately treated as capital gain net income.
| Fund | Gross Amount | |||
| Elfun Trusts |
$ | 154,751,317 | ||
| Elfun Tax-Exempt Income Fund |
2,492,732 | |||
For the fiscal year ended December 31, 2012, certain dividends paid by the fund may be subject to a maximum income tax rate of 15%. The following represents the amounts that may be considered qualified dividend income:
| Fund | Qualified Dividend Income | |||
| Elfun International Equity Fund |
$ | 4,907,346 | ||
| Elfun Trusts |
29,445,633 | |||
| Elfun Diversified Fund |
3,057,414 | |||
For corporate shareholders the following represent the percentages of respective fund distributions that may be eligible for the dividends received deduction:
| Fund name | Dividends Received Deduction | |||
| Elfun Trusts |
100.00 | % | ||
| Elfun Diversified Fund |
50.96 | % | ||
The amounts presented herein may differ from amounts presented elsewhere in the financial statements due to differences between tax and financial accounting principles. Please consult a tax advisor if you have any questions about Federal or State income tax laws or on how to prepare your tax returns. If you have specific questions about your Fund account, please consult your investment representative or call 1-800-242-0134.
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1 The Elfun Funds include the Elfun Trusts, Elfun International Equity Fund, Elfun Diversified Fund, Elfun Tax-Exempt Income Fund, Elfun Income Fund, Elfun Money Market Fund (each, a “Fund” and collectively, the “Funds”).
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105
The Statement of Additional Information for the Funds includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 1-800-242-0134.
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Officers of the Investment Adviser
Dmitri Stockton, Trustee, President and Chief Executive Officer, GE Asset Management Incorporated
Cheryl H. Beacock, Senior Vice President, Human Resources
George A. Bicher, Trustee, Chief Risk Officer
Paul M. Colonna, Trustee, President and Chief Investment Officer – Public Investments
Michael J. Cosgrove, Trustee, President of Mutual Funds and Global Investment Programs
Gregory B. Hartch, Trustee, Executive Vice President – Strategy and Business Development Leader
Jessica Holscott*, Trustee, Executive Vice President, Chief Financial Officer
Ralph R. Layman, Trustee, Executive Vice President, Chief Investment Officer Emeritus
Maureen B. Mitchell, President of Global Sales and Marketing
Steve Rullo, Senior Vice President – Services and Technology
Matthew J. Simpson, Trustee, Executive Vice President, General Counsel and Secretary
Donald W. Torey, Trustee, President and Chief Investment Officer – Alternative Investments and Real Estate
David Wiederecht, Trustee, President and Chief Investment Officer – Investment Solutions
* Effective August 1, 2012, Ms. Holscott replaced Tracie A. Winbigler as Executive Vice President and Chief Financial Officer.
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New Online Service
Your Elfun Mutual Fund accounts can now be accessed on the Internet at www.elfun.org.
Here are some of the benefits of our online service:
| • View account balance and transaction history |
• View and order tax forms | |
| • Make exchanges |
• View quarterly statements | |
| • Redeem shares |
• Change address | |
| • Purchase shares |
• Re-order money market checks |
Many more features will be added to the web site in the future for your convenience.
New Extended Telephone Service
Our Representatives at the Customer Service Center are available Monday to Friday from 8:30 AM to 8:00 PM Eastern Standard Time. Call toll-free, 1-800-242-0134, for assistance.
Automated Voice Response System
You can also access your account anytime during the day, 7 days a week by dialing 1-800-242-0134. Simply follow the menu to obtain information or make certain transactions.
Contact Us By Mail
If you’d like to write to us, address your inquiries regarding your account(s) to:
GE Mutual Funds
BNY Mellon Asset Servicing
P.O. Box 9838
Providence, RI 02940
We are continuing to upgrade a variety of services in order to give you the tools you need to manage your financial objectives. In the meantime, we welcome all your comments and suggestions.
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MORNINGSTAR RATINGS™
Through December 31, 2012
| FUND (CATEGORY) |
NUMBER OF FUNDS IN CATEGORY |
STAR RATING |
||||||
| Elfun International Equity — (Foreign Large Blend) | ||||||||
| Overall |
853 |
|
||||||
| 3 year |
741 |
|
||||||
| 5 year |
567 |
|
||||||
| 10 year |
317 |
|
||||||
| Elfun Trusts — (Large Growth) | ||||||||
| Overall |
1748 |
|
||||||
| 3 year |
1477 |
|
||||||
| 5 year |
1279 |
|
||||||
| 10 year |
804 |
|
||||||
| Elfun Diversified — (Moderate Allocation) | ||||||||
| Overall |
1019 |
|
||||||
| 3 year |
843 |
|
||||||
| 5 year |
736 |
|
||||||
| 10 year |
393 |
|
||||||
| Elfun Tax-Exempt Income — (Muni National Long) | ||||||||
| Overall |
250 |
|
||||||
| 3 year |
227 |
|
||||||
| 5 year |
211 |
|
||||||
| 10 year |
181 |
|
||||||
| Elfun Income — (Intermediate-Term Bond) | ||||||||
| Overall |
1238 |
|
||||||
| 3 year |
1017 |
|
||||||
| 5 year |
872 |
|
||||||
| 10 year |
582 |
|
||||||
Morningstar is an independent fund rating company that seeks to provide a non-biased rating system used in making investment decisions. A fund is rated in its broad asset class on a scale of one to five stars through the evaluation of the historical balance of risk and return after 3 years of performance.
Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top ten percent of the funds in each category receive five stars, the next 22.5% receive four stars, the next 35% receive three stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The ratings are subject to change every month. The overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten year (if applicable) Morningstar Rating metrics.
Investment return and principal value of an investment will fluctuate and you may have a gain or loss when you sell your shares. Returns assume changes in share price and reinvestment of dividends and capital gains.
Past performance is no guarantee of future results.
This does not constitute a part of the Funds’ Shareholder Report
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Elfun Funds
1600 Summer Street
Stamford, CT 06905
Distributor
GE Investment Distributors Inc.
Member FINRA and SIPC
1600 Summer Street
P.O. Box 7900
Stamford, CT 06904-7900
www.gefunds.com/elfun
The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first, second and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q, as well as a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities is available without charge (i) upon request, by calling 1-800-242-0134; (ii) on the Funds’ website at http://www.geam.com; and (iii) on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC — information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-months period ended June 30 is available without charge (i) through the Funds’ website at http://www.geam.com; and (ii) on the Commission’s website at http://www.sec.gov.
|
ELF 1 (2/13) |
PRSRT STD
U.S. POSTAGE
PAID
Permit No. 1793
Lancaster, PA
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| ITEM 2. | CODE OF ETHICS. |
The registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as Exhibit 1 to this Form N-CSR and is included in the following link:
http://files.gecompany.com/gecom/citizenship/pdfs/TheSpirit&TheLetter.pdf
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Board of Trustees of the Registrant has determined that Donald W. Torey and Jessica Holscott are designated as audit committee financial experts for the Funds; and further that it is the finding of the Board of Trustees that Mr. Torey and Ms. Holscott qualify as audit committee financial experts. Each audit committee member is deemed to be an “interested person” of the Funds as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
| 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 provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods were $13,300 in 2011 and $13,300 in 2012.
(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 Elfun 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 Fund’s 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 Fund’s 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.
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(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;
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(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 there under.
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 PARAGRAPHS (b) THROUGH (d) APPROVED BY AUDIT COMMITTEE. No fees were charged during 2011 or 2012 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 $0 in 2011 and $0 in 2012.
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(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 (15 U.S.C. 78c(a)(58)(A)). The Registrant’s audit committee members are: Donald W. Torey and Jessica Holscott.
| 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. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Applicable only to Closed-End Management Investment Companies.
| ITEM 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Applicable only to Closed-End Management Investment Companies.
| ITEM 10. | Submission of Matters to a Vote of Security Holders. |
No material changes.
| ITEM 11. | 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 12. | EXHIBITS. |
(a) Attached hereto as exhibit 1 is the company’s Code of Ethics.
(b) Attached hereto as Exhibit 2 and Exhibit 3 are the Certifications of Dmitri L. Stockton and Arthur A. Jensen as principal executive officer and principal financial officer, respectively of the Registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)).
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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.
Elfun Money Market Fund
| By: | /S/ DMITRI L. STOCKTON | |
| Dmitri L. Stockton | ||
| Trustee, President and Chief Executive Officer, GE Asset Management Incorporated | ||
| Date: | February 27, 2013 | |
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/ DMITRI L. STOCKTON | |
| Dmitri L. Stockton | ||
| Trustee, President and Chief Executive Officer, GE Asset Management Incorporated | ||
| Date: | February 27, 2013 | |
| By: | /S/ ARTHUR A. JENSEN | |
| Arthur A. Jensen | ||
| Treasurer, Elfun Funds | ||
| Date: | February 27, 2013 | |
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EXHIBIT INDEX
(a) Attached hereto as exhibit 1 is the company’s Code of Ethics.
(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.
