Download 1Q'11 GE Capital Supplement

GE Capital
First quarter 2011 supplement
Results are unaudited. This document contains “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking statements often
address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be
materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates,
commodity and equity prices and the value of financial assets; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital
Corporation's (GECC) funding and on our ability to reduce GECC's asset levels exposure as planned; the impact of conditions in the housing market and unemployment rates on the
level of commercial and consumer credit defaults; changes in Japanese consumer behavior that may affect our estimates of liability for grey zone claims; our ability to maintain our
current credit rating and the impact on our funding costs and competitive position if we do not do so; the level of demand and financial performance of the major industries we serve,
including, without limitation, air transportation, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks,
including the impact of financial services regulation; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous other
matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be
materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
This document may also contain non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be
informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons.
Prior period amounts have been recasted for discontinued operations.
First quarter 2011 supplemental information
Table of Contents
1. GE Capital structure
Page #
1
2. Financial statements
a) GECC
3-4
b) GECS
5-6
c) GECC continuing operations (GE Capital)
7
3. GE Capital asset quality
a) Assets by region
9
b) Assets in selected emerging markets
10
c) Portfolio overview and ratios
11-18
d) Nonearning and nonaccrual financing receivables
19
e) Consumer allowance for losses on financing receivables
20
f) Consumer financing receivables by region
21
g) Consumer mortgage portfolio by country
22
h) Commercial allowance for losses on financing receivables
23
i) Real estate allowance for losses on financing receivables
24
j) Commercial real estate debt and equity overview
25-26
k) Equipment leased to others overview
27
l) Commercial aircraft asset details
28
4. GE Capital other key areas
a) Investment securities
30
b) Investments measured at fair value in earnings
31
c) Ending net investment
32
d) GECC ratios
33
5. GECS supplemental information
a) Investment securities
35
b) Funding
36
c) Ratios
37
6. Appendix
a) Glossary
39-40
GE Capital structure
General Electric Company
General Electric Capital Services,
Inc. (GECS)
General Electric Capital
Corporation (GECC)
GE Capital - operating segments
Consumer
-
Private label credit cards
Bank cards
Personal loans
Auto loans and leases
Mortgages & home equity loans
Debt consolidation
Deposit & other savings products
Small & medium enterprise lending
Commercial Lending and
Leasing (CLL)
- Mid-market loans and leases of equipment
and major capital assets
- Mid-market equity capital
Real Estate
- Equity capital for acquisition or
recapitalization of commercial real estate
- Fixed/floating rate mortgages for
commercial real estate
Energy Financial Services
(EFS)
- Structured debt, equity, leasing,
partnership financing and project
financing to global energy and water
industries
- Invests in operating assets in these
industries
GE Capital Aviation Services
(GECAS)
- Commercial aircraft leasing and financing
- Project financing for airport facilities
1
Financial statements
2
GECC - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
March 31,
2011
$
Costs and expenses
Interest
Operating and administrative
Cost of goods sold
Investment contracts, insurance losses and insurance annuity benefits
Provision for losses on financing receivables (see pages 20, 23-24)
Depreciation and amortization
Total costs and expenses
12,282
42
12,324
December 31,
2010
$
11,826
44
11,870
For three months ending
September 30,
2010
$
11,179
40
11,219
June 30,
2010
$
March 31,
2010
11,744
168
11,912
$
11,650
281
11,931
3,660
3,357
40
24
1,163
1,775
10,019
3,693
3,822
43
35
1,355
1,970
10,918
3,651
3,343
39
36
1,641
2,017
10,727
3,731
3,472
154
38
2,009
1,848
11,252
3,792
3,520
265
35
2,187
1,914
11,713
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
2,305
(432)
952
120
492
358
660
85
218
360
Earnings from continuing operations (a)
Earnings (loss) from discontinued operations, net of taxes
1,873
20
1,072
614
850
(1,065)
745
(124)
578
(363)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,893
31
1,686
25
(215)
18
621
(22)
215
(5)
Net earnings (loss) attributable to GECC
$
1,862
$
1,661
GECC - statement of changes in shareowner's equity
March 31,
2011
(In millions)
Changes in GECC shareowner's equity
Balance at beginning of period
Accounting changes (b)
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
$
(77)
1,542
(64)
(1)
1,400
1,862
3,262
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
72,881
-
December 31,
2010
$
76,143
70,493
79
$
72,881
$
For three months ending
September 30,
2010
$
202
172
271
3
648
1,661
2,309
$
(233)
69,823
(5)
70,493
$
June 30,
2010
$
163
1,037
(278)
(14)
908
(233)
675
$
643
71,650
21
March 31,
2010
$
41
(2,618)
63
23
(2,491)
643
(1,848)
$
69,823
220
73,718
(1,565)
(9)
143
(1,312)
413
42
(714)
220
(494)
$
71,650
(a) Effective January 1, 2010, GE Capital segment earnings are equal to the earnings from continuing operations for GECC.
(b) March 31, 2010 reflects the impact of adoption of FAS 167 (ASU 2009-16 & 17).
3
GECC - Condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 30)
Inventories
Financing receivables - net (see pages 11 - 18)
Other receivables
Property, plant & equipment, less accumulated amortization
of $25,132, $25,396, $25,887, $25,431, and $26,208
Goodwill
Other intangible assets - net
Other assets
Assets of businesses held for sale
Assets of discontinued operations
Total assets
Liabilities and equity
Short-term borrowings
Accounts payable
Non-recourse borrowings of consolidated securitization entities
Bank deposits
Long-term borrowings
Investment contracts, insurance liabilities and insurance annuity benefits
Other liabilities
Deferred income taxes
Liabilities of businesses held for sale
Liabilities of discontinued operations
March 31,
2011
$
December 31,
2010
66,500
18,666
63
308,352
13,307
$
59,544
17,952
66
317,734
13,678
September 30,
2010
$
53,748
27,508
1,876
79,045
3,127
6,862
54,286
27,759
1,875
72,306
1,587
5,104
63,624
17,962
62
320,278
12,638
June 30,
2010
$
53,415
27,246
2,094
82,077
786
15,978
March 31,
2010
59,412
15,208
71
322,054
12,428
$
53,417
26,564
2,178
81,189
599
16,101
57,895
15,649
77
344,814
13,747
55,653
27,920
2,612
82,910
949
16,080
$
569,805
$
581,140
$
596,160
$
589,221
$
618,306
$
105,393
8,271
29,300
39,397
278,731
5,554
19,412
4,179
550
1,697
$
113,646
6,839
30,060
37,298
284,346
5,779
20,429
6,200
592
1,906
$
110,488
8,083
30,497
36,375
297,369
6,663
20,594
4,981
446
9,045
$
115,729
7,897
33,411
31,938
288,854
7,430
19,544
5,183
261
8,053
$
119,283
7,850
36,780
32,837
306,100
8,389
19,489
5,794
30
7,946
Total liabilities
492,484
507,095
524,541
518,300
544,498
Capital stock
Accumulated other comprehensive income - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Additional paid-in-capital
Retained earnings
56
56
56
56
56
(414)
1
(1,411)
(381)
28,463
49,829
(337)
(1,541)
(1,347)
(380)
28,463
47,967
(539)
(1,713)
(1,618)
(383)
28,421
46,269
(702)
(2,750)
(1,340)
(369)
28,421
46,507
(743)
(132)
(1,403)
(392)
28,427
45,837
Total GECC shareowner's equity
76,143
72,881
70,493
69,823
71,650
1,178
1,164
1,126
1,098
2,158
77,321
74,045
71,619
70,921
73,808
Noncontrolling interests
Total equity
Total liabilities and equity
$
569,805
$
581,140
$
596,160
$
589,221
$
618,306
4
GECS - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
March 31,
2011
$
Costs and expenses
Interest
Operating and administrative
Cost of goods sold
Investment contracts, insurance losses and insurance annuity benefits
Provision for losses on financing receivables (see pages 20, 23-24)
Depreciation and amortization
Total costs and expenses
13,112
42
13,154
December 31,
2010
$
12,741
44
12,785
For three months ending
September 30,
2010
$
12,032
40
12,072
June 30,
2010
$
March 31,
2010
12,596
168
12,764
$
12,489
281
12,770
3,667
3,488
40
769
1,163
1,776
10,903
3,700
3,952
43
844
1,355
1,971
11,865
3,660
3,485
39
796
1,641
2,018
11,639
3,739
3,617
154
770
2,009
1,848
12,137
3,800
3,651
265
787
2,187
1,915
12,605
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
2,251
(414)
920
132
433
378
627
110
165
345
Earnings from continuing operations
Earnings (loss) from discontinued operations, net of taxes
1,837
19
1,052
614
811
(1,065)
737
(125)
510
(363)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,856
31
1,666
25
(254)
18
612
(22)
147
(5)
Net earnings (loss) attributable to GECS
$
1,825
$
1,641
GECS - statement of changes in shareowner's equity
March 31,
2011
(In millions)
Changes in GECS shareowner's equity
Balance at beginning of period
Accounting changes (a)
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
$
(188)
1,553
(70)
(1)
1,294
1,825
3,119
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
68,984
1
December 31,
2010
$
72,104
66,854
80
$
68,984
$
For three months ending
September 30,
2010
$
(22)
180
248
3
409
1,641
2,050
$
(272)
67,267
(5)
66,854
$
June 30,
2010
$
(906)
1,045
(261)
(14)
(136)
(272)
(408)
$
634
68,517
22
March 31,
2010
$
632
(2,649)
88
23
(1,906)
634
(1,272)
$
67,267
152
70,833
(1,910)
(12)
310
(1,311)
413
42
(546)
152
(394)
$
68,517
(a) March 31, 2010 reflects the impact of adoption of FAS 167 (ASU 2009-16 & 17).
5
GECS - Condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 35)
Inventories
Financing receivables - net (see pages 11 - 18)
Other receivables
Property, plant & equipment, less accumulated amortization
of $25,148, $25,411, $25,902, $25,446, and $26,223
Goodwill
Other intangible assets - net
Other assets
Assets of businesses held for sale
Assets of discontinued operations
Total assets
Liabilities and equity
Short-term borrowings (see page 36)
Accounts payable
Non-recourse borrowings of consolidated securitization entities (see page 36)
Bank deposits (see page 36)
Long-term borrowings (see page 36)
Investment contracts, insurance liabilities and insurance annuity benefits
Other liabilities
Deferred income taxes
Liabilities of businesses held for sale
Liabilities of discontinued operations
March 31,
2011
$
December 31,
2010
67,256
44,872
63
308,352
14,004
$
60,263
43,921
66
317,734
14,310
September 30,
2010
$
53,768
27,508
1,884
79,240
3,127
6,862
54,306
27,759
1,883
72,470
1,587
5,104
64,281
45,130
62
320,278
13,174
June 30,
2010
$
53,435
27,246
2,103
82,312
786
15,978
March 31,
2010
59,771
41,491
71
322,054
12,962
$
53,438
26,564
2,625
82,302
599
16,101
58,319
40,935
77
344,814
14,358
55,675
27,920
3,064
84,012
949
16,080
$
597,656
$
608,683
$
624,785
$
617,978
$
646,203
$
110,603
8,372
29,300
39,397
278,792
30,363
20,068
4,986
550
1,943
$
118,797
7,035
30,060
37,298
284,407
29,993
21,122
7,082
592
2,149
$
115,521
8,191
30,497
36,375
297,437
31,688
21,528
5,833
446
9,289
$
120,725
8,039
33,411
31,938
288,922
31,015
20,452
6,555
261
8,295
$
124,172
8,092
36,780
32,837
306,169
31,990
20,456
6,785
30
8,217
Total liabilities
524,374
538,535
556,805
549,613
575,528
Capital stock
Accumulated other comprehensive income - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Additional paid-in-capital
Retained earnings
11
11
11
11
11
(827)
142
(1,351)
(381)
27,617
46,893
(639)
(1,411)
(1,281)
(380)
27,616
45,068
(617)
(1,591)
(1,529)
(383)
27,573
43,390
289
(2,636)
(1,268)
(369)
27,573
43,667
(343)
13
(1,356)
(392)
27,578
43,006
Total GECS shareowner's equity
72,104
68,984
66,854
67,267
68,517
1,178
1,164
1,126
1,098
2,158
73,282
70,148
67,980
68,365
70,675
Noncontrolling interests
Total equity
Total liabilities and equity
$
597,656
$
608,683
$
624,785
$
617,978
$
646,203
6
GECC continuing operations (GE Capital)
March 31,
2011
(In millions)
Revenues
Less: Interest expense
Net revenues
$
12,324
(3,660)
8,664
December 31,
2010
$
11,870
(3,693)
8,177
For three months ending
September 30,
2010
$
11,219
(3,651)
7,568
June 30,
2010
$
March 31,
2010
11,912
(3,731)
8,181
$
11,931
(3,792)
8,139
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
2,693
1,775
728
5,196
2,916
1,970
984
5,870
2,578
2,017
840
5,435
2,649
1,848
1,015
5,512
2,674
1,914
1,146
5,734
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
3,468
(1,163)
2,307
(1,355)
2,133
(1,641)
2,669
(2,009)
2,405
(2,187)
Earnings before income taxes
Benefit (provision) for income taxes
2,305
(432)
952
120
492
358
660
85
218
360
Earnings from continuing operations before noncontrolling interests
Less: Net earnings (loss) attributable to noncontrolling interests
$
1,873
31
$
1,072
25
$
850
18
$
745
(22)
$
578
(5)
GE Capital segment profit
$
1,842
$
1,047
$
832
$
767
$
583
March 31,
2011
(In millions)
Segment profit
CLL
Consumer
Real Estate
EFS
GECAS
$
$
GECC corporate items and eliminations
GE Capital segment profit
$
December 31,
2010
554
1,257
(358)
112
306
1,871
(29)
$
1,842
$
$
For three months ending
September 30,
2010
567
565
(409)
33
432
1,188
(141)
$
1,047
$
$
June 30,
2010
443
787
(405)
55
158
1,038
(206)
$
832
$
$
March 31,
2010
312
672
(524)
126
288
874
(107)
$
767
$
232
569
(403)
153
317
868
(285)
$
583
7
GE Capital asset quality
8
GE Capital - Assets by region (a)
(In millions)
March 31,
2011
Property, plant and
equipment (net)
Financing
receivables (net)
144,367
$
U.S.
Europe
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other
$
Total
$
308,352
$
54,286
$
564,701
Total at December 31, 2010
$
317,734
$
53,748
$
574,278
Total at September 30, 2010
$
320,278
$
53,415
$
580,182
Total at June 30, 2010
$
322,054
$
53,417
$
573,120
Total at March 31, 2010
$
344,814
$
55,653
$
602,226
80,446
19,156
29,187
21,776
13,420
10,438
Total assets
$
5,410
278
2,590
1,296
34,274
290,485
$
108,912
28,067
51,501
32,725
53,011
At
December 31,
2010
September 30,
2010
June 30,
2010
March 31,
2010
Total assets
Total assets
Total assets
Total assets
296,366
$
109,939
29,004
52,687
32,738
53,544
$
574,278
299,546
$
111,888
29,675
52,795
32,848
53,430
$
580,182
301,830
$
106,001
27,515
51,116
33,224
53,434
$
573,120
310,249
118,722
30,616
55,991
32,602
54,046
$
602,226
(a) Excludes assets of discontinued operations.
9
GE Capital - Assets in selected emerging markets
(In millions)
Selected emerging markets (a)
Eastern Europe
Poland
Czech Republic
Hungary
Turkey
Total Eastern Europe
Financing
receivables (net)
$
9,190
5,641
3,329
18,160
March 31,
2011
Property, plant and
equipment (net)
$
139
63
48
250
Total assets
$
13,202
7,553
4,576
440
25,771
$
At
December 31,
2010
September 30,
2010
June 30,
2010
March 31,
2010
Total assets
Total assets
Total assets
Total assets
13,236
6,657
4,427
3,074
27,394
$
13,058
7,304
4,115
3,077
27,554
$
11,995
6,607
4,026
2,794
25,422
$
13,274
7,636
4,625
2,801
28,336
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
1,256
60
1,316
15
15
1,789
1,636
3,425
1,777
1,621
3,398
1,771
1,554
3,325
1,758
1,456
3,214
2,225
1,455
3,680
Americas
Mexico
Total Americas
5,458
5,458
796
796
8,406
8,406
8,411
8,411
8,047
8,047
7,982
7,982
7,820
7,820
Total
$
24,934
$
1,061
$
37,602
Total at December 31, 2010
$
24,524
$
1,077
$
39,203
Total at September 30, 2010
$
24,513
$
1,011
$
38,926
Total at June 30, 2010
$
23,351
$
879
$
36,618
Total at March 31, 2010
$
26,024
$
952
$
39,836
$
39,203
$
38,926
$
36,618
$
39,836
(a) We have disclosed here selected emerging markets where our total assets at December 31, 2010, exceed $1 billion. Assets of discontinued operations are excluded.
10
GE Capital - CLL portfolio overview
(In millions, unless otherwise noted)
Balances
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
82,876
37,093
11,545
2,568
134,082
$
$
$
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
$
$
$
$
$
$
2,777
1,095
429
7
4,308
$
$
1,356
411
252
8
2,027
172
35
58
265
$
$
314
71
56
1
442
$
$
189
47
18
254
March 31,
2010
93,042
36,067
11,914
2,727
143,750
$
$
June 30,
2010
$
$
$
June 30,
2010
$
$
$
3,210
1,126
467
26
4,829
March 31,
2010
1,362
382
234
8
1,986
$
96,553
39,980
12,664
2,791
151,988
March 31,
2010
3,076
902
422
24
4,424
$
Write-offs (net) - for three months ending
December 31,
September 30,
2010
2010
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
1,287
429
222
7
1,945
$
$
89,769
36,969
12,192
2,651
141,581
Allowance for losses (c)
September 30,
2010
December 31,
2010
1,254
443
228
6
1,931
$
2,571
1,241
406
8
4,226
$
$
June 30,
2010
Nonearning receivables (b)
September 30,
2010
December 31,
2010
2,395
1,209
346
8
3,958
$
86,596
37,498
11,943
2,626
138,663
$
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
Financing receivables (a)
September 30,
2010
December 31,
2010
$
$
June 30,
2010
1,319
484
236
12
2,051
March 31,
2010
256
128
39
423
$
$
247
132
46
425
(a) Financing receivables include impaired loans of $5,514 million at March 31, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments
about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected
future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate.
Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is
not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
11
GE Capital - CLL portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
2.9 %
3.3
3.0
0.3
3.0
52.4 %
36.6
65.9
75.0
48.8
48.8 %
37.5
58.7
114.3
47.1
1.5 %
1.1
1.9
0.3
1.4
0.8 %
0.4
2.0
NM
0.8
44.3 %
42.4
55.5
33.3
44.9
1.5 %
1.1
2.1
0.3
1.4
March 31,
2011
1.4 %
0.8
1.9
0.2
1.3
2.03 %
2.14 %
2.40 %
41.1 %
43.0
50.5
46.2
42.5
March 31,
2010
1.5 %
1.1
2.0
0.3
1.4
0.8 %
0.5
0.6
NM
0.7
CLL
September 30,
2010
December 31,
2010
3.3 %
2.8
3.7
0.9
3.2
March 31,
2010
Write-offs as a percent of financing receivables (c)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Delinquency
50.1 %
34.6
54.7
87.5
46.0
1.5 %
1.2
2.0
0.2
1.4
CLL
Americas
Europe
Asia
Other
Total
3.3 %
2.5
3.5
0.9
3.1
Allowance for losses as a percent of total financing receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
3.1 %
3.0
3.5
0.3
3.0
Allowance for losses as a percent of nonearning receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
CLL
Americas
Europe
Asia
Other
Total
3.0 %
3.3
3.4
0.3
3.0
March 31,
2010
1.4 %
1.2
1.9
0.4
1.3
March 31,
2010
1.1 %
1.3
1.3
NM
1.1
June 30,
2010
1.0 %
1.3
1.4
NM
1.1
March 31,
2010
2.58 %
2.77 %
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments about the
probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected future levels
of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009,
loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition.
This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
12
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Balances
March 31,
2011
EFS
GECAS
Other
$
6,662
12,104
1,640
$
March 31,
2011
EFS
GECAS
Other
$
162
16
99
$
$
36
12
55
$
$
$
7,291
12,227
2,087
June 30,
2010
$
Nonearning receivables (b)
September 30,
2010
62
102
$
163
90
22
20
58
$
85
25
53
$
71
6
$
-
$
7,854
12,615
2,445
March 31,
2010
77
77
105
$
June 30,
2010
80
77
100
March 31,
2010
$
$
7
-
7,472
12,337
2,272
$
Write-offs (net) - for three months ending
December 31,
September 30,
2010
2010
4
8
March 31,
2010
June 30,
2010
Allowance for losses (c)
September 30,
2010
December 31,
2010
March 31,
2011
EFS
GECAS
Other
7,011
12,615
1,788
December 31,
2010
March 31,
2011
EFS
GECAS
Other
Financing receivables (a)
September 30,
2010
December 31,
2010
53
50
50
$
June 30,
2010
47
54
46
March 31,
2010
-
$
18
-
71
2
(a) Financing receivables include $162 million, $114 million and $186 million of impaired loans at EFS, GECAS, and Other, respectively, at March 31, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under FASB ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans which
are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments
about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected
future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective
January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition.
This may result in lower reserve coverage ratios prospectively.
13
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
EFS
GECAS
Other
2.4 %
0.1
6.0
22.2 %
75.0
55.6
0.5 %
0.1
3.4
35.5 %
56.9
52.1 %
58.9
0.3 %
0.2
3.2
1.2 %
0.2
2.5
0.2 %
1.9
4.0 %
NM
1.2
NM %
0.2
NM
1.0 %
0.6
4.1
March 31,
2010
68.8 %
64.9
47.6
58.8 %
70.1
46.0
March 31,
2010
0.7 %
0.4
2.2
Write-offs as a percent of financing receivables (c)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
EFS
GECAS
Other
1.0 %
0.6
4.6
Allowance for losses as a percent of total financing receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
EFS
GECAS
Other
2.2 %
4.3
Allowance for losses as a percent of nonearning receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
EFS
GECAS
Other
0.9 %
5.7
March 31,
2010
0.6 %
0.4
1.9
March 31,
2010
NM %
0.6
NM
NM %
2.2
0.3
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition).
Under FASB ASC 310, Receivables, these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually
delinquent at acquisition. In addition, nonearning receivables exclude loans which are paying currently under a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent
when payments are brought current according to restructured terms but may remain classified as nonearning until there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured
of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted
for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values
(including housing price indices as applicable), and the present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates
relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition
date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
14
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Balances
March 31,
2011
Real Estate
Debt (b)
Business Properties
Total
$
$
29,474
9,548
39,022
$
$
$
Real Estate
Debt
Business Properties
Total
$
$
$
$
$
$
1,037
388
1,425
$
$
1,649
208
1,857
240
40
280
$
$
332
33
365
$
$
195
27
222
March 31,
2010
33,388
10,618
44,006
$
$
$
June 30,
2010
$
$
$
June 30,
2010
$
$
$
1,332
416
1,748
March 31,
2010
1,590
207
1,797
$
35,432
12,154
47,586
March 31,
2010
1,211
407
1,618
$
Write-offs (net) - for three months ending
December 31,
September 30,
2010
2010
March 31,
2011
Real Estate
Debt
Business Properties
Total
$
1,292
196
1,488
$
32,167
10,314
42,481
Allowance for losses (d)
September 30,
2010
December 31,
2010
1,118
181
1,299
$
$
961
386
1,347
$
March 31,
2011
$
June 30,
2010
Nonearning receivables (c)
September 30,
2010
December 31,
2010
769
368
1,137
$
30,249
9,962
40,211
$
March 31,
2011
Real Estate
Debt
Business Properties
Total
Financing receivables (a)
September 30,
2010
December 31,
2010
$
$
June 30,
2010
1,372
185
1,557
March 31,
2010
157
28
185
$
$
152
36
188
(a) Financing receivables include $10,450 million of impaired loans at Real Estate at March 31, 2011.
(b) Financing receivables include $183 million of construction loans at March 31, 2011.
(c) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under FASB ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans which
are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(d) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments
about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected
future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective
January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition.
This may result in lower reserve coverage ratios prospectively.
15
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Real Estate
Debt
Business Properties
Total
2.6 %
3.9
2.9
145.4 %
49.2
114.2
159.0 %
53.6
130.0
4.3 %
2.0
3.7
3.2 %
1.6
2.8
131.0 %
50.9
111.1
5.1 %
2.0
4.4
March 31,
2011
4.3 %
1.3
3.5
December 31,
2010
4.08 %
4.41 %
5.74 %
103.0 %
44.5
89.1
March 31,
2010
4.8 %
1.9
4.1
3.9 %
1.5
3.3
March 31,
2010
1.8 %
1.0
1.6
2.4 %
1.0
2.1
Real Estate
September 30,
2010
3.8 %
3.4
3.7
March 31,
2010
Write-offs as a percent of financing receivables (c)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Delinquency
134.4 %
50.8
110.5
3.8 %
1.9
3.3
Real Estate
Debt
Business Properties
Total
3.6 %
3.8
3.7
Allowance for losses as a percent of total financing receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Real Estate
Debt
Business Properties
Total
3.2 %
3.8
3.4
Allowance for losses as a percent of nonearning receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Real Estate
Debt
Business Properties
Total
3.2 %
3.9
3.3
March 31,
2010
June 30,
2010
1.7 %
1.4
1.6
March 31,
2010
5.40 %
4.97 %
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition).
Under FASB ASC 310, Receivables, these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually
delinquent at acquisition. In addition, nonearning receivables exclude loans which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent
when payments are brought current according to restructured terms but may remain classified as nonearning until there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured
of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted
for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values
(including housing price indices as applicable), and the present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates
relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition
date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
16
GE Capital - Consumer portfolio overview
(In millions, unless otherwise noted)
Balances
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
$
$
December 31,
2010
45,436
20,235
41,282
7,295
8,231
122,479
$
$
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
$
December 31,
2010
3,927
295
1,004
41
462
5,729
$
$
$
December 31,
2010
842
930
2,141
152
239
4,304
$
$
$
$
828
937
2,333
168
259
4,525
$
$
$
45,860
20,966
40,052
8,155
8,488
123,521
June 30,
2010
$
$
Nonearning receivables (b)
September 30,
2010
$
$
4,030
316
1,144
40
481
6,011
$
896
974
2,551
198
244
4,863
55
183
777
36
61
1,112
$
$
121
251
891
13
70
1,346
$
$
77
243
853
42
59
1,274
44,582
20,046
40,077
8,124
8,248
121,077
$
$
$
$
$
June 30,
2010
$
$
$
4,153
392
1,445
56
509
6,555
March 31,
2010
867
954
2,635
223
246
4,925
$
49,281
22,505
40,320
10,062
9,425
131,593
March 31,
2010
3,985
371
1,223
48
460
6,087
$
Allowance for losses (c)
September 30,
2010
$
March 31,
2010
June 30,
2010
Write-offs (net) - for three months ending
December 31,
September 30,
2010
2010
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
3,812
289
1,201
46
478
5,826
$
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
45,536
20,132
43,974
7,558
8,304
125,504
Financing receivables (a)
September 30,
2010
$
$
June 30,
2010
888
1,071
2,974
281
300
5,514
March 31,
2010
58
298
1,014
54
85
1,509
$
$
75
355
1,073
46
91
1,640
(a) Financing receivables include impaired loans of $2,687 million at March 31, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and
judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the
present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis,
as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses
is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
17
GE Capital - Consumer portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
8.6 %
1.5
2.4
0.6
5.6
4.7
21.4 %
315.3
213.2
370.7
51.7
75.1
22.2 %
308.2
223.0
495.0
50.7
80.9
1.8 %
4.7
5.3
2.2
3.1
3.6
0.5 %
3.6
7.3
1.9
3.0
3.6 %
21.8 %
257.1
215.5
464.6
53.5
80.9
2.0 %
4.6
6.4
2.4
2.9
3.9
March 31,
2011
1.1 %
4.9
8.5
0.7
3.3
4.3 %
8.07 %
8.20 %
8.65 %
21.4 %
273.2
205.8
501.8
58.9
84.1
March 31,
2010
1.9 %
4.8
6.6
2.7
3.0
4.1
0.7 %
4.7
8.5
2.1
2.8
4.2 %
Consumer
September 30,
2010
December 31,
2010
8.4 %
1.7
3.6
0.6
5.4
5.0
March 31,
2010
Write-offs as a percent of financing receivables (c)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Delinquency
21.7 %
324.2
194.3
365.2
54.2
77.7
1.9 %
4.6
5.2
2.1
2.9
3.5
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
8.9 %
1.9
3.1
0.6
5.6
5.0
Allowance for losses as a percent of total financing receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
8.8 %
1.5
2.9
0.5
5.7
4.9
Allowance for losses as a percent of nonearning receivables (b)
December 31,
September 30,
June 30,
2010
2010
2010
March 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
8.4 %
1.4
2.7
0.6
5.8
4.6
March 31,
2010
1.8 %
4.8
7.4
2.8
3.2
4.2
March 31,
2010
0.5 %
5.6
10.1
2.4
3.8
4.8 %
June 30,
2010
0.6 %
6.2
14.2
1.7
3.7
5.2 %
March 31,
2010
9.01 %
9.06 %
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and
judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the
present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis,
as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses
is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
18
GE Capital - Nonearning and nonaccrual financing receivables
($ millions)
March 31, 2011
Commercial
CLL
EFS
GECAS
Other
Total Commercial
Nonearning
financing
receivables (a)
Nonaccrual
financing
receivables (b)
$
$
3,958
162
16
99
4,235
5,080
162
16
184
5,442
Real Estate
1,137
10,308
Consumer
5,729
6,036
Total
$
11,101
$
21,786
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition).
Under FASB ASC 310, Receivables, these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually
delinquent at acquisition. In addition, nonearning receivables exclude loans which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent
when payments are brought current according to restructured terms but may remain classified as nonearning until there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured
of collection.
(b) "Nonaccrual receivables" are those on which we have stopped accruing interest. We stop accruing interest at the earlier of the time at which collection of an account becomes doubtful or the account becomes 90 days past due. Total nonaccrual
receivables of $21.8 billion includes $11.1 billion classified as nonearning receivables. Substantially all of this difference relates to loans which are classified as nonaccrual receivables but are paying on a cash basis, and therefore are excluded
from nonearning receivables.
19
GE Capital - Consumer allowance for losses on financing receivables
(In millions)
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
(In millions)
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
Provision
charged to
operations
Balance
January 1,
2011
Balance
December 31,
2009
Other (b)
Gross writeoffs
Balance
March 31,
2011
Recoveries
$
828
937
2,333
168
259
$
44
153
585
15
37
$
25
23
5
4
$
(74)
(327)
(913)
(68)
(86)
$
19
144
136
32
25
$
842
930
2,141
152
239
$
4,525
$
834
$
57
$
(1,468)
$
356
$
4,304
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (a)
Other (b)
Gross writeoffs
Balance
March 31,
2010
Recoveries
$
926
1,106
1,551
292
292
$
1,602
-
$
926
1,106
3,153
292
292
$
103
325
895
44
108
$
(66)
(5)
(1)
(9)
(9)
$
(101)
(507)
(1,199)
(92)
(110)
$
26
152
126
46
19
$
888
1,071
2,974
281
300
$
4,167
$
1,602
$
5,769
$
1,475
$
(90)
$
(2,009)
$
369
$
5,514
(a) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
(b) Other primarily included the effects of currency exchange.
20
GE Capital - Consumer financing receivables by region
(In millions)
March 31, 2011
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at March 31, 2011
$
-
$
31,313
8,373
5,249
74
427
September 30, 2010
45,436
$
Total at September 30, 2010
$
-
$
March 31, 2010
$
$
Total at March 31, 2010
$
-
$
$
40,052
61,018
$
40,320
7,295
$
62,825
$
$
8,155
$
-
$
$
939
$
8,488
40,991
46,833
19,194
14,342
1,632
529
$
123,521
December 31, 2010
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at December 31, 2010
$
-
$
31,100
8,108
5,774
105
449
June 30, 2010
45,536
$
Total at June 30, 2010
$
-
$
64,106
$
40,077
$
60,123
$
7,558
$
-
$
$
8,304
8,124
$
125,504
Total
987
$
3,017
3,932
312
$
44,851
46,186
19,249
14,411
326
481
Other (a)
5,075
1,315
1,726
8
$
Total
877
2,853
4,321
253
-
Auto
$
7,060
5,255
6,016
1,641
74
$
Other (a)
4,700
1,341
1,516
1
Installment and
revolving credit
30,426
7,247
6,233
176
500
44,582
Auto
$
7,533
5,479
6,868
221
31
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
43,974
8,248
41,064
45,578
17,749
14,287
1,817
582
$
121,077
Total
924
$
3,632
4,529
340
$
122,479
Total
Other (a)
10,062
42,131
46,359
19,697
13,565
280
447
2,971
4,283
295
-
6,051
1,572
2,326
88
25
$
8,231
$
Auto
$
849
Other (a)
-
$
Total
2,736
4,432
214
-
5,112
1,389
1,647
7
8,009
6,145
6,483
1,762
106
$
$
Auto
Installment and
revolving credit
33,074
8,054
7,376
228
549
49,281
-
7,433
5,565
6,421
1,493
54
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
61,517
Other (a)
4,645
1,328
1,320
2
Installment and
revolving credit
31,317
7,957
5,979
139
468
45,860
$
7,665
5,564
6,782
206
18
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
41,282
Auto
9,425
41,243
50,766
20,300
16,525
2,078
681
$
131,593
(a) Represents mainly small and medium enterprise loans.
21
GE Capital - Consumer mortgage portfolio by country (a)
(In millions)
Financing
receivables
March 31, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
December 31, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K. (b) (d)
Australia
France (d)
Poland
Spain
Hungary
All other
$
18,574
4,438
9,497
5,854
1,061
1,091
4,921
40.9 %
9.8
20.9
12.9
2.3
2.4
10.8
13.7 %
1.9
3.1
1.0
17.3
10.0
12.9
20.3 %
12.3
3.6
2.1
28.1
14.8
14.5
U.K.
Australia
France
Poland
Spain
Hungary
All other
$
18,487
4,891
9,379
5,694
1,047
1,054
4,984
40.6 %
10.7
20.6
12.5
2.3
2.3
11.0
13.7 %
1.5
2.9
0.9
15.0
9.2
12.9
21.7 %
10.2
3.6
2.0
25.5
14.4
13.6
Total at March 31, 2011 (c)
$
45,436
100.0 %
8.6 %
13.1 %
Total at December 31, 2010
$
45,536
100.0 %
8.4 %
13.3 %
Financing
receivables
September 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
June 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
Australia
France
Poland
Spain
Hungary
All other
$
18,858
5,081
9,302
5,545
1,074
1,020
4,980
41.1 %
11.1
20.3
12.1
2.3
2.2
10.9
15.0 %
1.2
2.4
0.9
18.1
8.4
11.9
23.4 %
9.9
3.5
2.0
27.4
13.6
12.8
U.K.
Australia
France
Poland
Spain
Hungary
All other
$
18,327
5,253
9,015
5,007
1,053
929
4,998
41.1 %
11.8
20.2
11.2
2.4
2.1
11.2
15.9 %
1.3
2.1
0.9
19.3
7.0
9.7
24.9 %
9.9
3.4
1.9
29.4
12.0
12.1
Total at September 30, 2010
$
45,860
100 %
8.8 %
14.0 %
Total at June 30, 2010
$
44,582
100.0 %
8.9 %
14.6 %
Financing
receivables
March 31, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
Australia
France
Poland
Spain
Hungary
All other
$
19,236
6,328
10,280
5,518
1,211
1,025
5,683
39.0 %
12.8
20.9
11.2
2.5
2.1
11.5
16.1 %
1.1
2.0
0.8
20.3
6.1
7.3
24.4 %
8.7
3.2
1.8
29.4
10.0
11.8
Total at March 31, 2010
$
49,281
100.0 %
8.4 %
13.8 %
(a) Consumer loans secured by residential real estate (both revolving and closed-end loans) are written down to the fair value of collateral, less costs to sell, no later than when they become 360 days past due.
(b) At March 31, 2011, we had in repossession stock approximately 650 houses in the U.K., which had a value of approximately $0.1 billion.
(c) At March 31, 2011, net of credit insurance, approximately 24% of this portfolio comprised loans with introductory, below market rates that are scheduled to adjust at future dates; with high loan-to-value ratios at inception (greater than 90%); whose terms permitted
interest-only payments; or whose terms resulted in negative amortization. At origination, we underwrite loans with an adjustable rate to the reset value. 81% of these loans are in our U.K. and France portfolios, which comprise mainly loans with
interest-only payments and introductory below market rates, have a delinquency rate of 15% and have a loan-to-value ratio at origination of 76%. At March 31, 2011, 4% (based on dollar values) of these loans in our U.K. and France portfolios have been restructured.
(d) Our U.K. and France portfolios have reindexed loan-to-value ratios of 84% and 58%, respectively.
22
GE Capital - Commercial allowance for losses on financing receivables
Provision
charged to
operations
Balance
January 1,
2011
(In millions)
CLL
Americas
Europe
Asia
Other
$
1,287
429
222
7
$
Gross
write-offs
Other (a)
139
30
60
-
$
19
4
(1)
$
Balance
March 31,
2011
Recoveries
(194)
(51)
(69)
-
$
22
16
11
-
$
1,254
443
228
6
EFS
22
19
(1)
(4)
-
36
GECAS
20
(8)
-
-
-
12
Other
58
4
1
(8)
-
55
Total Commercial
(In millions)
CLL
Americas
Europe
Asia
Other
$
Balance
December 31,
2009
$
1,179
575
244
11
EFS
$
66
(10)
-
$
244
$
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (b)
$
2,045
1,245
575
234
11
$
22
$
Gross
write-offs
Other (a)
325
72
50
1
$
(326)
(4)
(31)
(2)
-
$
$
49
$
Balance
March 31,
2010
Recoveries
(282)
(147)
(50)
-
$
2,034
35
15
4
-
$
1,319
484
236
12
28
-
28
19
-
-
-
47
GECAS
104
-
104
21
-
(71)
-
54
Other
34
-
34
13
1
(2)
-
46
Total Commercial
$
2,175
$
56
$
2,231
$
501
$
(36)
$
(552)
$
54
$
2,198
(a) Other primarily included the effects of currency exchange.
(b) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
23
GE Capital - Real Estate allowance for losses on financing receivables
Provision
charged to
operations
Balance
January 1,
2011
(In millions)
Gross
write-offs
Other (a)
Balance
March 31,
2011
Recoveries
Real Estate
Debt
Business Properties
$
1,292
196
$
59
26
$
7
(1)
$
(243)
(42)
$
3
2
$
1,118
181
Total Real Estate
$
1,488
$
85
$
6
$
(285)
$
5
$
1,299
Balance
December 31,
2009
Adoption of ASU 200916 & 17 (b)
Real Estate
Debt
Business Properties
$
1,358
136
$
Total Real Estate
$
1,494
$
(In millions)
Provision
charged to
operations
Balance
January 1,
2010
(3)
45
$
42
$
1,355
181
$
1,536
$
Gross
write-offs
Other (a)
170
41
$
211
$
(1)
(1)
$
(2)
$
Balance
March 31,
2010
Recoveries
(152)
(37)
$
(189)
$
-
$
1,372
185
$
1,557
1
1
(a) Other primarily included the effects of currency exchange.
(b) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
24
GE Capital - Real Estate debt overview
(In millions)
March 31,
2011
Region
December 31,
2010
Financing receivables
September 30,
2010
June 30,
2010
March 31,
2010
U.S.
Europe
Pacific Basin
Americas
$
24,778
4,468
3,032
6,744
$
25,989
4,515
2,991
6,716
$
27,628
4,719
2,974
7,160
$
28,804
4,700
3,001
7,501
$
30,505
5,103
3,135
8,843
Total (a)
$
39,022
$
40,211
$
42,481
$
44,006
$
47,586
March 31,
2011
Vintage profile
Originated in
pre-2008
2008
2009
2010
2011
Total
March 31,
2011
Property type
December 31,
2010
Financing receivables
September 30,
2010
June 30,
2010
March 31,
2010
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
9,210
9,548
5,825
4,351
3,435
3,581
1,110
123
1,839
$
9,354
9,962
6,151
4,404
3,480
3,650
1,159
122
1,929
$
10,028
10,314
6,467
4,683
3,775
3,937
1,192
121
1,964
$
10,201
10,620
7,010
4,911
3,966
3,981
1,225
120
1,972
$
10,923
12,227
7,418
5,117
4,231
4,229
1,304
124
2,013
Total (a)
$
39,022
$
40,211
$
42,481
$
44,006
$
47,586
March 31,
2011
Contractual maturities
$
24,536
13,696
143
591
56
Due in
2011 and prior (b)
2012
2013
2014
2015 and later
$
39,022
Total
$
10,767
8,262
4,105
3,347
12,541
$
39,022
(a) Represents total gross financing receivables for Real Estate only.
(b) Includes $1,058 million relating to loans with contractual maturities prior to March 31, 2011.
25
GE Capital - Real Estate equity overview (a)
(In millions, unless otherwise noted)
March 31,
2011
Region
Equity
September 30,
2010
December 31,
2010
June 30,
2010
March 31,
2010
U.S.
Europe
Pacific Basin
Americas
$
9,138
9,277
7,131
2,940
$
9,041
9,750
7,155
2,923
$
9,254
9,905
7,327
2,927
$
9,446
9,477
7,177
2,999
$
9,531
10,864
7,523
3,053
Total
$
28,486
$
28,869
$
29,413
$
29,099
$
30,971
March 31,
2011
Vintage profile (e)
Originated in
pre-2008
2008
2009
2010
2011
Total
$
$
25,643
2,025
145
398
275
28,486
March 31,
2011
Property type
Equity
September 30,
2010
December 31,
2010
June 30,
2010
March 31,
2010
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
14,811
4,259
3,409
2,308
1,170
811
605
402
711
$
14,537
4,359
3,465
2,859
1,126
814
695
338
676
$
14,695
4,340
3,579
2,803
1,459
817
724
334
662
$
14,406
4,204
3,617
2,758
1,468
819
733
341
753
$
15,602
4,334
3,775
2,993
1,622
824
745
347
729
Total
$
28,486
$
28,869
$
29,413
$
29,099
$
30,971
March 31,
2011
Key metrics
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
End of period vacancies (d)
Foreclosed properties (f)
December 31,
2010
24,616
$
1,382
$
5.5 %
20.6 %
$
601
25,187
September 30,
2010
$
1,453
$
5.7 %
20.0 %
$
629
25,549
June 30,
2010
$
1,384
$
5.5 %
21.0 %
$
708
March 31,
2010
25,127
$
1,463
$
5.6 %
20.7 %
$
714
26,915
1,488
5.4 %
20.6 %
$
718
(a) Includes real estate investments related to Real Estate only.
(b) Excludes joint ventures, equity investment securities, and foreclosed properties.
(c) Net operating income yield is calculated as annualized net operating income for the relevant quarter as a percentage of the average owned real estate.
(d) Excludes hotel properties, apartment buildings and parking facilities.
(e) Includes foreclosed properties based on date of foreclosure.
(f) Excludes foreclosed properties related to loans acquired at a discount with an expectation to foreclose.
26
GE Capital - Equipment leased to others (ELTO), net of depreciation and amortization overview
(In millions)
March 31, 2011
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at March 31, 2011
$
September 30, 2010
Collateral type
GECAS
3,141
9,246
2,917
1,434
2,045
1,108
$
19,891
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at September 30, 2010
$
March 31, 2010
Collateral type
EFS
32,144
-
$
32,144
$
GECAS
3,469
8,783
3,008
1,402
1,893
1,125
$
19,680
$
CLL
886
$
886
$
EFS
30,842
-
$
30,842
$
GECAS
Total
Consumer
$
5
2
6
13
$
$
1,198
$
-
$
6
2
6
14
$
CLL
35,285
9,251
2,917
1,436
2,045
2,000
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
52,934
Total at December 31, 2010
$
Total
Consumer
1,198
EFS
-
December 31, 2010
Collateral type
June 30, 2010
Collateral type
GECAS
3,130
9,072
2,960
1,452
1,924
927
$
19,465
$
CLL
34,311
8,789
3,008
1,404
1,893
2,329
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
51,734
Total at June 30, 2010
$
EFS
31,535
-
$
31,535
$
GECAS
3,025
9,128
3,073
1,549
1,839
1,073
$
19,687
$
Consumer
1,089
$
1,089
$
$
30,818
$
Total
$
34,665
9,077
2,960
1,454
1,924
2,023
$
52,103
5
2
7
EFS
30,818
-
-
14
Consumer
1,217
$
1,217
$
-
Total
$
33,843
9,135
3,073
1,549
1,840
2,298
$
51,738
7
1
8
16
Total
Consumer
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
3,179
10,256
2,870
1,687
1,801
979
$
30,207
-
$
1,232
$
10
1
2
14
$
33,386
10,266
2,870
1,688
1,803
2,225
Total at March 31, 2010
$
20,772
$
30,207
$
1,232
$
27
$
52,238
27
GE Capital - Commercial aircraft asset details
March 31,
2011
Collateral type (In millions)
December 31,
2010
Loans and leases
September 30,
2010
June 30,
2010
March 31,
2010
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
24,959
8,399
3,287
5,166
2,317
$
24,750
8,233
3,405
5,260
2,380
$
23,083
8,249
3,855
5,322
2,441
$
23,040
7,763
4,211
5,521
2,509
$
22,692
9,044
2,899
5,601
2,467
Total (a)
$
44,128
$
44,028
$
42,950
$
43,044
$
42,703
March 31,
2011
Airline regions (In millions)
December 31,
2010
Loans and leases
September 30,
2010
June 30,
2010
March 31,
2010
U.S.
Europe
Pacific Basin
Americas
Other
$
14,573
9,484
8,278
5,507
6,286
$
15,123
9,258
8,113
5,313
6,221
$
14,659
9,290
7,791
5,258
5,952
$
14,456
9,527
7,769
5,814
5,478
$
14,321
9,552
7,657
5,882
5,291
Total (a)
$
44,128
$
44,028
$
42,950
$
43,044
$
42,703
March 31,
2011
Aircraft vintage profile (In millions)
0-5 years
6-10 years
11 - 15 years
15+ years
$
18,317
14,396
5,055
4,043
Total (b)
$
41,811
(a) Includes loans and financing leases of $12,104 million, $12,615 million, $12,227 million, $12,337 million, and $12,615 million (less non-aircraft loans and financing leases of $120 million, $122 million, $119 million,
$111 million, and $119 million) and ELTO of $32,144 million, $31,535 million, $30,842 million, $30,818 million, and $30,207 million, at March 31, 2011, December 31, 2010, September 30, 2010,
June 30, 2010, and March 31, 2010, respectively, related to commercial aircraft at GECAS.
(b) Excludes aircraft engine loans and leases of $2,317 million at March 31, 2011.
28
GE Capital other key areas
29
GE Capital - Investment securities
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
Amortized
cost
$
Retained interests
Equity
Available-for-sale
Trading
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
3,305
912
2,004
1,564
3,417
1,436
2,347
2,549
$
117
5
13
38
50
7
2
$
(10)
(225)
(315)
(151)
(141)
(94)
(61)
(9)
Estimated
fair value
$
3,412
692
1,702
1,413
3,314
1,392
2,293
2,542
Amortized
cost
$
$
Equity
$
3,490
918
2,099
1,619
3,242
1,478
1,804
2,663
At December 31, 2010
Gross
Gross
unrealized
unrealized
gains
losses
$
169
4
14
7
39
8
3
34
21
(3)
52
55
10
1,264
418
200
-
(28)
-
1,436
418
902
417
194
-
19,250
$
453
$
(1,037)
$
18,666
$
At March 31, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
Retained interests
Total
At March 31, 2011
Gross
Gross
unrealized
unrealized
gains
losses
232
137
306
758
52
153
1,022
1,837
$
(5)
(16)
(4)
(91)
(2)
(1)
(5)
(9)
$
247
446
905
654
892
729
147
-
$
(5)
(209)
(311)
(60)
(139)
(93)
(56)
-
-
-
6
(3)
73
(25)
10
(3)
4,570
$
(158)
$
4,036
$
(879)
18,687
$
448
$
(14)
(232)
(355)
(183)
(190)
(111)
(58)
(5)
Estimated
fair value
$
(26)
39
(9)
1,087
417
$
3,645
690
1,758
1,436
3,059
1,406
1,754
2,661
(1,183)
$
17,952
At December 31, 2010 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
$
357
137
166
779
111
123
642
1,613
$
-
3,974
$
337
443
920
652
902
673
105
-
-
46
$
(5)
(16)
(3)
(103)
(5)
(2)
(6)
(5)
34
(9)
$
$
(154)
(26)
$
4,066
(9)
(216)
(352)
(80)
(185)
(109)
(52)
-
$
(1,029)
(a) Substantially collateralized by U.S. mortgages.
30
GE Capital - Investments measured at fair value in earnings (a)
Asset balances at
March 31,
2011
Investment type (In millions)
Equities - trading
$
December 31,
2010
418
$
417
Net earnings impact for
three months ending
March 31, 2011
$
(7)
Assets held for sale (LOCOM)
2,041
3,538
(4)
Assets of businesses held for sale (LOCOM)
1,587
3,127
8
422
390
(44)
Investment companies
Total
$
4,468
$
7,472
$
(47)
(a) Excludes derivatives portfolio.
31
GE Capital - Ending Net Investment (ENI)
March 31,
2011
(In billions)
GECC total assets
$
Less: assets of discontinued operations
Less: non-interest bearing liabilities
GE Capital ENI
$
Less: cash and equivalents
GE Capital ENI, excluding cash and equivalents
December 31,
2010
569.8
$
$
596.2
June 30,
2010
$
589.2
March 31,
2010
$
618.3
(5.1)
(6.9)
(16.0)
(16.1)
(16.1)
(36.9)
(38.9)
(39.5)
(39.2)
(41.5)
527.8
$
(66.5)
$
581.1
September 30,
2010
461.3
535.3
$
(59.5)
$
475.8
540.7
$
(63.6)
$
477.1
533.9
$
(59.4)
$
474.5
560.7
(57.9)
$
502.8
32
GECC - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
March 31,
2011
$
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
December 31,
2010
452.8
76.1
$
465.4
72.9
5.9:1
$
452.8
(7.7)
(66.6)
378.5
September 30,
2010
$
6.4:1
$
465.4
(7.7)
(59.7)
398.0
481.4
70.5
June 30,
2010
$
476.6
69.8
6.8:1
$
481.4
(7.7)
(65.4)
408.3
March 31,
2010
$
6.8:1
$
476.6
(7.7)
(61.2)
407.7
501.7
71.7
7.0:1
$
501.7
(7.7)
(59.6)
434.4
Equity (b)
Add: hybrid debt
Adjusted equity
76.1
7.7
83.8
72.9
7.7
80.6
70.5
7.7
78.2
69.8
7.7
77.5
71.7
7.7
79.4
Adjusted leverage ratio
4.5:1
4.9:1
5.2:1
5.3:1
5.5:1
Tangible common equity to tangible assets ratio
(In billions)
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
March 31,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
76.1
(29.6)
$
72.9
(29.5)
$
70.5
(30.1)
$
69.8
(29.5)
$
71.7
(31.3)
Tangible common equity
$
46.5
$
43.4
$
40.4
$
40.3
$
40.4
Total assets
Less: Goodwill and other intangibles
$
569.8
(29.6)
$
581.1
(29.5)
$
596.1
(30.1)
$
589.2
(29.5)
$
618.2
(31.3)
Tangible assets
$
540.2
$
551.6
$
566.0
$
559.7
$
586.9
Tangible common equity to tangible assets
8.6 %
7.9 %
7.1 %
7.2 %
6.9 %
Tier 1 common ratio (c)
9.8 %
8.9 %
8.2 %
8.1 %
7.8 %
(a) Includes discontinued operations.
(b) Equity represents amounts available to GECC shareholders, excluding noncontrolling interests.
(c) Estimated based on SCAP requirements.
33
GECS supplemental information
34
GECS - Investment securities
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
At March 31, 2011
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
$
21,093
3,053
2,976
2,941
3,560
2,817
2,823
3,250
$
1,538
52
104
143
47
124
75
53
$
(156)
(262)
(333)
(177)
(143)
(109)
(62)
(59)
Estimated
fair value
$
22,475
2,843
2,747
2,907
3,464
2,832
2,836
3,244
Amortized
cost
$
21,233
2,961
3,092
3,009
3,407
2,883
2,242
3,358
At December 31, 2010
Gross
Gross
unrealized
unrealized
losses
gains
$
1,576
45
95
145
16
116
82
57
$
(237)
(282)
(378)
(230)
(193)
(132)
(58)
(47)
Estimated
fair value
$
22,572
2,724
2,809
2,924
3,230
2,867
2,266
3,368
Retained interests
34
21
(3)
52
55
10
(26)
39
Equity
Available-for-sale
Trading
860
418
222
-
(28)
-
1,054
418
500
417
213
-
(8)
-
705
417
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
$
2,379
$
(1,332)
$
44,872
$
At March 31, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
$
Retained interests
Equity
Total
43,825
$
1,968
941
319
859
62
439
1,052
1,878
$
(49)
(40)
(5)
(92)
(2)
(9)
(5)
(19)
$
1,327
544
996
778
899
847
148
162
$
(107)
(222)
(328)
(85)
(141)
(100)
(57)
(40)
-
-
6
(3)
75
(25)
10
(3)
7,593
$
(246)
$
5,717
$
(1,086)
43,157
$
2,355
$
(1,591)
$
43,921
At December 31, 2010 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
$
2,375
949
188
831
113
448
661
1,822
$
-
7,436
$
-
49
$
(81)
(43)
(4)
(104)
(5)
(12)
(6)
(47)
$
34
(8)
$
1,519
570
1,024
817
910
804
107
-
(310)
(26)
$
5,785
(156)
(239)
(374)
(126)
(188)
(120)
(52)
-
$
(1,281)
(a) Substantially collateralized by U.S. mortgages.
35
GECS - Funding
March 31,
2011
(In billions)
December 31,
2010
September 30,
2010
June 30,
2010
March 31,
2010
Commercial paper
Long-term debt (a)
Deposits/brokered CD's
Alternate funding / other
Non-recourse borrowings of consolidated securitization entities
$
40.6
324.1
39.4
24.7
29.3
$
42.0
336.0
37.3
25.2
30.1
$
41.3
347.4
36.4
24.2
30.5
$
46.0
339.8
31.9
23.9
33.4
$
46.0
358.5
32.8
25.9
36.8
Total debt
$
458.1
$
470.6
$
479.8
$
475.0
$
500.0
$
53.0
$
51.8
$
52.1
$
51.7
$
51.6
Metrics
Bank lines
Commercial paper coverage (b):
Bank lines
Bank lines and cash and equivalents
130 %
296 %
123 %
267 %
126 %
282 %
112 %
242 %
112 %
239 %
Cash and equivalents
$
67.3
$
60.3
$
64.3
$
59.8
$
58.3
LT debt < 1 year
$
59.2
$
65.6
$
62.7
$
63.0
$
64.5
(a) Includes $45 billion, $53 billion, $55 billion, $58 billion, and $59 billion of long term debt issued under the TLGP program at March 31, 2011, December 31, 2010, September 30, 2010,
June 30, 2010, and March 31, 2010, respectively.
(b) Commercial paper coverage represents bank lines, both excluding and including cash and equivalents, as a percentage of the commercial paper balance as of the end of the relevant period.
36
GECS - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
March 31,
2011
$
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
December 31,
2010
458.1
72.1
$
470.6
69.0
6.4:1
$
458.1
(7.7)
(67.4)
383.0
September 30,
2010
$
486.5
66.9
6.8:1
$
470.6
(7.7)
(60.4)
402.4
June 30,
2010
$
481.7
67.3
7.3:1
$
486.5
(7.7)
(66.0)
412.7
March 31,
2010
$
7.2:1
$
481.7
(7.7)
(61.5)
412.4
506.6
68.5
7.4:1
$
506.6
(7.7)
(60.0)
438.9
Equity (b)
Add: hybrid debt
Adjusted equity
72.1
7.7
79.8
69.0
7.7
76.7
66.9
7.7
74.6
67.3
7.7
75.0
68.5
7.7
76.2
Adjusted leverage ratio
4.8:1
5.2:1
5.5:1
5.5:1
5.8:1
Tangible common equity to tangible assets ratio
(In billions)
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
March 31,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
72.1
(29.6)
$
69.0
(29.5)
$
66.9
(30.1)
$
67.3
(29.9)
$
68.5
(31.7)
Tangible common equity
$
42.5
$
39.5
$
36.8
$
37.4
$
36.8
Total assets
Less: Goodwill and other intangibles
$
597.7
(29.6)
$
608.7
(29.5)
$
624.7
(30.1)
$
617.9
(29.9)
$
646.1
(31.7)
Tangible assets
$
568.1
$
579.2
$
594.6
$
588.0
$
614.4
Tangible common equity to tangible assets
7.5 %
6.8 %
6.2 %
6.3 %
6.0 %
Tier 1 common ratio (c)
8.6 %
7.8 %
7.3 %
7.1 %
6.8 %
(a) Includes discontinued operations.
(b) Equity represents amounts available to GECS shareholders, excluding noncontrolling interests.
(c) Estimated based on SCAP requirements.
37
Appendix
38
Glossary
Term
Definition
Borrowing
Financial liability (short or long-term) that obligates us to repay cash or another financial asset to another entity.
Cash and equivalents
Highly liquid debt instruments with original maturities of three months or less, such as commercial paper. Typically included with cash
for reporting purposes, unless designated as available-for-sale and included with investment securities.
Cash flow hedges
Qualifying derivative instruments that we use to protect ourselves against exposure to variability in future cash flows. The exposure may
be associated with an existing asset or liability, or with a forecasted transaction. See "Hedge."
Commercial paper
Unsecured, unregistered promise to repay borrowed funds in a specified period ranging from overnight to 270 days.
Derivative instrument
A financial instrument or contract with another party (counterparty) that is designed to meet any of a variety of risk management
objectives, including those related to fluctuations in interest rates, currency exchange rates or commodity prices. Options, forwards and
swaps are the most common derivative instruments we employ. See "Hedge."
Discontinued operations
Certain businesses we have sold or committed to sell within the next year and therefore will no longer be part of our ongoing operations.
The net earnings, assets and liabilities, and cash flows of such businesses are separately classified on our Statement of Earnings and
Statement of Financial Position for all periods presented.
Ending Net Investment (ENI)
The total capital we have invested in the financial services business. It is the sum of short-term borrowings, long-term borrowings and
equity (excluding noncontrolling interests) adjusted for unrealized gains and losses on investment securities and hedging instruments.
Alternatively, it is the amount of assets of continuing operations less the amount of non-interest bearing liabilities.
Equipment leased to others
Rental equipment we own that is available to rent and is stated at cost less accumulated depreciation.
Fair value hedge
Qualifying derivative instruments that we use to reduce the risk of changes in the fair value of assets, liabilities or certain types of firm
commitments. Changes in the fair values of derivative instruments that are designated and effective as fair value hedges are recorded in
earnings, but are offset by corresponding changes in the fair values of the hedged items. See "Hedge."
Financing receivables
Investment in contractual loans and financing leases due from customers (not investment securities).
Goodwill
The premium paid for acquisition of a business. Calculated as the purchase price less the fair value of net assets acquired (net assets are
identified tangible and intangible assets, less liabilities assumed).
Hedge
A technique designed to eliminate risk. Often refers to the use of derivative financial instruments to offset changes in interest rates,
currency exchange rates or commodity prices, although many business positions are "naturally hedged" - for example, funding a U.S.
fixed-rate investment with U.S. fixed-rate borrowings is a natural interest rate hedge.
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Glossary
Term
Definition
Intangible asset
A non-financial asset lacking physical substance, such as goodwill, patents, licenses, trademarks and customer relationships.
Interest rate swap
Agreement under which two counterparties agree to exchange one type of interest rate cash flow for another. In a typical
arrangement, one party periodically will pay a fixed amount of interest, in exchange for which that party will receive variable
payments computed using a published index. See "Hedge."
Investment securities
Generally, an instrument that provides an ownership position in a corporation (a stock), a creditor relationship with a corporation
or governmental body (a bond), rights to contractual cash flows backed by pools of financial assets or rights to ownership such as
those represented by options, subscription rights and subscription warrants.
Net operating income
Represents operating income less operating expenses for owned real estate properties.
Retained interest
A portion of a transferred financial asset retained by the transferor that provides rights to receive portions of the cash inflows from
that asset.
Securitization
A process whereby loans or other receivables are packaged, underwritten and sold to investors. In a typical transaction, assets are
sold to a special purpose entity, which purchases the assets with cash raised through issuance of beneficial interests (usually debt
instruments) to third-party investors. Whether or not credit risk associated with the securitized assets is retained by the seller
depends on the structure of the securitization. See "Variable interest entity."
Variable interest entity (VIE)
Entity defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810 (FASB Interpretation 46
(Revised)), and that must be consolidated by its primary beneficiary. A variable interest entity has one or both of the following
characteristics: (1) its equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated
financial support from other parties, or (2) as a group, the equity investors lack one or more of the following characteristics: (a)
direct/indirect ability to make decisions, (b) obligation to absorb expected losses, or (c) right to receive expected residual returns.
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