Download 2Q'11 GE Capital Supplement

GE Capital
Second 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.
Second 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
June 30,
2011
$
11,584
42
11,626
March 31,
2011
$
12,169
42
12,211
For three months ending
December 31,
2010
$
11,702
44
11,746
September 30,
2010
$
11,061
40
11,101
June 30,
2010
$
11,614
168
11,782
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
3,583
3,319
38
30
811
1,792
9,573
3,581
3,352
40
24
1,157
1,775
9,929
3,602
3,815
43
35
1,352
1,971
10,818
3,565
3,338
39
36
1,637
2,016
10,631
3,638
3,471
154
38
2,007
1,848
11,156
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
2,053
(378)
2,282
(446)
928
124
470
366
626
95
Earnings from continuing operations (a)
Earnings (loss) from discontinued operations, net of taxes
1,675
218
1,836
57
1,052
634
836
(1,051)
721
(100)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,893
20
1,893
31
1,686
25
(215)
18
621
(22)
Net earnings (loss) attributable to GECC
$
1,873
$
1,862
GECC - statement of changes in shareowner's equity
June 30,
2011
(In millions)
Changes in GECC shareowner's equity
Balance at beginning of period
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
$
38
985
(195)
828
1,873
2,701
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
76,143
-
March 31,
2011
$
78,844
72,881
-
$
76,143
$
For three months ending
December 31,
2010
$
(77)
1,542
(64)
(1)
1,400
1,862
3,262
$
1,661
70,493
79
72,881
$
September 30,
2010
$
202
172
271
3
648
1,661
2,309
$
(233)
69,823
(5)
June 30,
2010
$
163
1,037
(278)
(14)
908
(233)
675
$
70,493
643
71,650
21
41
(2,618)
63
23
(2,491)
643
(1,848)
$
69,823
(a) Effective January 1, 2010, GE Capital segment earnings are equal to the earnings from continuing operations for GECC.
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 $24,961, $25,125, $25,390, $25,879, and $25,424
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
June 30,
2011
$
March 31,
2011
77,258
18,372
52
300,749
13,657
$
December 31,
2010
66,497
18,666
63
303,365
13,313
$
54,286
27,759
1,874
72,306
1,587
10,106
55,307
28,173
1,843
74,410
895
6,407
59,538
17,952
66
312,234
13,674
September 30,
2010
$
53,747
27,508
1,874
79,045
3,127
12,375
63,612
17,962
62
314,573
12,610
June 30,
2010
$
53,415
27,246
2,093
82,077
786
21,725
59,402
15,208
71
316,099
12,429
53,417
26,564
2,177
81,189
599
22,076
$
577,123
$
569,822
$
581,140
$
596,161
$
589,231
$
118,599
7,739
29,075
41,548
268,830
5,054
22,283
1,717
527
1,706
$
105,393
8,271
29,300
39,397
278,732
5,554
19,246
4,057
550
2,001
$
113,646
6,839
30,018
37,298
284,346
5,779
20,287
6,109
592
2,181
$
110,488
8,081
30,434
36,375
297,369
6,663
20,481
4,900
446
9,305
$
115,729
7,897
33,347
31,938
288,854
7,430
19,260
5,168
261
8,426
Total liabilities
497,078
492,501
507,095
524,542
518,310
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
(376)
986
(1,606)
(381)
28,463
51,702
(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
Total GECC shareowner's equity
78,844
76,143
72,881
70,493
69,823
1,201
1,178
1,164
1,126
1,098
80,045
77,321
74,045
71,619
70,921
Noncontrolling interests
Total equity
Total liabilities and equity
$
577,123
$
569,822
$
581,140
$
596,161
$
589,231
4
GECS - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
June 30,
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
12,401
42
12,443
March 31,
2011
$
12,999
42
13,041
For three months ending
December 31,
2010
$
12,618
44
12,662
September 30,
2010
$
11,914
40
11,954
June 30,
2010
$
12,464
168
12,632
3,601
3,454
38
790
811
1,792
10,486
3,589
3,483
40
769
1,157
1,776
10,814
3,610
3,946
43
844
1,352
1,971
11,766
3,573
3,479
39
796
1,637
2,018
11,542
3,645
3,616
154
770
2,007
1,848
12,040
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
1,957
(344)
2,227
(428)
896
136
412
386
592
120
Earnings from continuing operations
Earnings (loss) from discontinued operations, net of taxes
1,613
217
1,799
57
1,032
634
798
(1,052)
712
(100)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,830
20
1,856
31
1,666
25
(254)
18
612
(22)
Net earnings (loss) attributable to GECS
$
1,810
$
1,825
GECS - statement of changes in shareowner's equity
June 30,
2011
(In millions)
Changes in GECS shareowner's equity
Balance at beginning of period
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
$
391
993
(190)
1,194
1,810
3,004
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
72,104
-
March 31,
2011
$
75,108
68,984
1
$
72,104
$
For three months ending
December 31,
2010
$
(188)
1,553
(70)
(1)
1,294
1,825
3,119
$
1,641
66,854
80
68,984
$
September 30,
2010
$
(22)
180
248
3
409
1,641
2,050
$
(272)
67,267
(5)
June 30,
2010
$
(906)
1,045
(261)
(14)
(136)
(272)
(408)
$
66,854
634
68,517
22
632
(2,649)
88
23
(1,906)
634
(1,272)
$
67,267
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 $24,977, $25,140, $25,404, $25,895, and $25,439
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
June 30,
2011
$
March 31,
2011
77,983
45,331
52
300,749
14,263
$
December 31,
2010
67,253
44,872
63
303,365
14,009
$
54,306
27,759
1,882
72,471
1,587
10,106
55,326
28,173
1,851
74,598
895
6,413
60,257
43,921
66
312,234
14,304
September 30,
2010
$
53,768
27,508
1,883
79,240
3,127
12,375
64,269
45,130
62
314,573
13,146
June 30,
2010
$
53,435
27,246
2,102
82,312
786
21,725
59,762
41,491
71
316,099
12,962
53,438
26,564
2,624
82,302
599
22,076
$
605,634
$
597,673
$
608,683
$
624,786
$
617,988
$
123,643
7,870
29,075
41,548
268,962
29,854
23,127
2,759
527
1,960
$
110,603
8,372
29,300
39,397
278,792
30,363
19,903
4,864
550
2,247
$
118,797
7,035
30,018
37,298
284,407
29,993
20,982
6,990
592
2,423
$
115,521
8,189
30,434
36,375
297,437
31,688
21,414
5,752
446
9,550
$
120,725
8,039
33,347
31,938
288,922
31,015
20,168
6,540
261
8,668
Total liabilities
529,325
524,391
538,535
556,806
549,623
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
(436)
1,135
(1,541)
(381)
27,617
48,703
(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
Total GECS shareowner's equity
75,108
72,104
68,984
66,854
67,267
1,201
1,178
1,164
1,126
1,098
76,309
73,282
70,148
67,980
68,365
Noncontrolling interests
Total equity
Total liabilities and equity
$
605,634
$
597,673
$
608,683
$
624,786
$
617,988
6
GECC continuing operations (GE Capital)
June 30,
2011
(In millions)
Revenues
Less: Interest expense
Net revenues
$
March 31,
2011
11,626
(3,583)
8,043
$
12,211
(3,581)
8,630
For three months ending
December 31,
2010
$
11,746
(3,602)
8,144
September 30,
2010
$
11,101
(3,565)
7,536
June 30,
2010
$
11,782
(3,638)
8,144
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
2,771
1,792
616
5,179
2,687
1,775
729
5,191
2,909
1,971
984
5,864
2,572
2,016
841
5,429
2,645
1,848
1,018
5,511
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
2,864
(811)
3,439
(1,157)
2,280
(1,352)
2,107
(1,637)
2,633
(2,007)
Earnings before income taxes
Benefit (provision) for income taxes
2,053
(378)
2,282
(446)
928
124
470
366
626
95
Earnings from continuing operations before noncontrolling interests
Less: Net earnings (loss) attributable to noncontrolling interests
$
1,675
20
$
1,836
31
$
1,052
25
$
836
18
$
721
(22)
GE Capital segment profit
$
1,655
$
1,805
$
1,027
$
818
$
743
June 30,
2011
(In millions)
Segment profit
CLL
Consumer
Real Estate
EFS
GECAS
$
$
GECC corporate items and eliminations
GE Capital segment profit
$
March 31,
2011
701
1,020
(335)
139
321
1,846
(191)
$
1,655
$
$
For three months ending
December 31,
2010
554
1,219
(358)
112
306
1,833
(28)
$
1,805
$
$
September 30,
2010
567
546
(409)
33
432
1,169
(142)
$
1,027
$
$
June 30,
2010
443
773
(405)
55
158
1,024
(206)
$
818
$
312
649
(524)
126
288
851
(108)
$
743
7
GE Capital asset quality
8
GE Capital - Assets by region (a)
(In millions)
June 30,
2011
Property, plant and
equipment (net)
Financing
receivables (net)
140,941
$
U.S.
Europe
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other
$
Total
$
300,749
$
55,307
$
570,716
Total at March 31, 2011
$
303,365
$
54,286
$
559,716
Total at December 31, 2010
$
312,234
$
53,747
$
568,765
Total at September 30, 2010
$
314,573
$
53,415
$
574,436
Total at June 30, 2010
$
316,099
$
53,417
$
567,155
80,921
20,005
25,071
20,777
13,034
10,683
Total assets
$
5,312
274
2,650
1,331
35,057
297,988
$
109,909
29,561
48,023
32,114
53,121
At
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
Total assets
Total assets
Total assets
Total assets
290,485
$
108,912
28,067
46,516
32,725
53,011
$
559,716
296,366
$
108,728
30,215
47,174
32,738
53,544
$
568,765
299,546
$
110,563
31,000
47,049
32,848
53,430
$
574,436
301,830
106,001
27,515
45,151
33,224
53,434
$
567,155
(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)
$
9,588
5,876
3,507
18,971
June 30,
2011
Property, plant and
equipment (net)
$
140
59
47
246
Total assets
$
13,689
7,844
4,817
972
27,322
$
At
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
Total assets
Total assets
Total assets
Total assets
13,202
7,553
4,576
440
25,771
$
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
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
1,273
58
1,331
15
15
1,808
1,618
3,426
1,789
1,636
3,425
1,777
1,621
3,398
1,771
1,554
3,325
1,758
1,456
3,214
Americas
Mexico
Total Americas
5,382
5,382
809
809
8,344
8,344
8,406
8,406
8,411
8,411
8,047
8,047
7,982
7,982
Total
$
25,684
$
1,070
$
39,092
Total at March 31, 2011
$
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
$
37,602
$
39,203
$
38,926
$
36,618
(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
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
79,614
37,897
11,759
2,489
131,759
$
$
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
$
$
$
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
1,254
443
228
6
1,931
$
March 31,
2011
139
64
71
274
$
$
$
86,596
37,498
11,943
2,626
138,663
$
$
$
$
2,571
1,241
406
8
4,226
$
$
1,287
429
222
7
1,945
June 30,
2010
89,769
36,969
12,192
2,651
141,581
$
$
September 30,
2010
$
$
Allowance for losses (c)
December 31,
2010
March 31,
2011
1,123
433
180
7
1,743
$
September 30,
2010
Nonearning receivables (b)
December 31,
2010
2,395
1,209
346
8
3,958
$
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
82,876
37,093
11,545
2,568
134,082
March 31,
2011
2,060
1,156
266
6
3,488
$
Financing receivables (a)
December 31,
2010
March 31,
2011
June 30,
2010
2,777
1,095
429
7
4,308
$
$
September 30,
2010
$
$
$
$
314
71
56
1
442
$
$
3,076
902
422
24
4,424
June 30,
2010
1,356
411
252
8
2,027
$
$
Write-offs (net) - for three months ending
December 31,
September 30,
2010
2010
172
35
58
265
93,042
36,067
11,914
2,727
143,750
1,362
382
234
8
1,986
June 30,
2010
189
47
18
254
$
$
256
128
39
423
(a) Financing receivables include impaired loans of $5,638 million at June 30, 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)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
2.6 %
3.1
2.3
0.2
2.6
54.5 %
37.5
67.7
116.7
50.0
50.1 %
34.6
54.7
87.5
46.0
1.5 %
1.2
2.0
0.2
1.4
0.7 %
0.7
2.4
0.8
48.8 %
37.5
58.7
114.3
47.1
1.5 %
1.1
1.9
0.3
1.4
June 30,
2011
0.8 %
0.4
2.0
NM
0.8
1.94 %
2.03 %
June 30,
2010
1.5 %
1.1
2.0
0.3
1.4
June 30,
2010
0.8 %
0.5
0.6
NM
0.7
September 30,
2010
2.14 %
44.3 %
42.4
55.5
33.3
44.9
1.5 %
1.1
2.1
0.3
1.4
1.4 %
0.8
1.9
0.2
1.3
CLL
December 31,
2010
March 31,
2011
3.3 %
2.5
3.5
0.9
3.1
June 30,
2010
Write-offs as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Delinquency
52.4 %
36.6
65.9
75.0
48.8
1.4 %
1.1
1.5
0.3
1.3
CLL
Americas
Europe
Asia
Other
Total
3.1 %
3.0
3.5
0.3
3.0
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
3.0 %
3.3
3.4
0.3
3.0
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
CLL
Americas
Europe
Asia
Other
Total
2.9 %
3.3
3.0
0.3
3.0
June 30,
2010
1.1 %
1.3
1.3
NM
1.1
June 30,
2010
2.40 %
2.58 %
(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)
Financing receivables (a)
December 31,
2010
Balances
June 30,
2011
EFS
GECAS
Other
$
March 31,
2011
6,143
11,952
1,517
$
June 30,
2011
EFS
GECAS
Other
$
136
64
87
$
$
$
$
7,011
12,615
1,788
$
$
62
102
$
Allowance for losses (c)
December 31,
2010
36
12
55
$
22
20
58
7,291
12,227
2,087
June 30,
2010
$
September 30,
2010
163
90
$
September 30,
2010
$
85
25
53
(7)
3
8
$
4
8
$
71
6
$
7
-
7,472
12,337
2,272
June 30,
2010
77
77
105
June 30,
2010
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
EFS
GECAS
Other
162
16
99
March 31,
2011
35
15
54
$
Nonearning receivables (b)
December 31,
2010
March 31,
2011
June 30,
2011
EFS
GECAS
Other
6,662
12,104
1,640
September 30,
2010
53
50
50
June 30,
2010
$
18
-
(a) Financing receivables include $140 million, $94 million, and $181 million of impaired loans at EFS, GECAS, and Other, respectively, at June 30, 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)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
EFS
GECAS
Other
2.2 %
0.5
5.7
25.7 %
23.4
62.1
0.6 %
0.1
3.6
22.2 %
75.0
55.6
35.5 %
56.9
0.5 %
0.1
3.4
0.3 %
0.2
3.2
(0.4) %
0.1
2.0
0.2 %
1.9
4.0 %
NM
1.2
1.0 %
0.6
4.6
June 30,
2010
52.1 %
58.9
68.8 %
64.9
47.6
June 30,
2010
1.2 %
0.2
2.5
Write-offs (net) as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
EFS
GECAS
Other
2.2 %
4.3
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
EFS
GECAS
Other
0.9 %
5.7
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
EFS
GECAS
Other
2.4 %
0.1
6.0
June 30,
2010
0.7 %
0.4
2.2
June 30,
2010
NM %
0.2
NM
NM %
0.6
NM
(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
June 30,
2011
Real Estate
Debt (b)
Business Properties
Total
$
27,750
9,057
36,807
$
$
$
$
Real Estate
Debt
Business Properties
Total
$
$
$
$
$
$
$
$
961
386
1,347
$
$
1,292
196
1,488
June 30,
2010
32,167
10,314
42,481
$
$
September 30,
2010
$
$
1,037
388
1,425
$
$
September 30,
2010
$
$
91
27
118
$
$
240
40
280
$
$
332
33
365
$
$
33,388
10,618
44,006
June 30,
2010
1,211
407
1,618
June 30,
2010
1,649
208
1,857
$
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Real Estate
Debt
Business Properties
Total
1,118
181
1,299
$
30,249
9,962
40,211
Allowance for losses (d)
December 31,
2010
March 31,
2011
1,092
184
1,276
$
$
769
368
1,137
$
June 30,
2011
$
September 30,
2010
Nonearning receivables (c)
December 31,
2010
March 31,
2011
680
323
1,003
$
29,474
9,548
39,022
$
June 30,
2011
Real Estate
Debt
Business Properties
Total
Financing receivables (a)
December 31,
2010
March 31,
2011
1,590
207
1,797
June 30,
2010
195
27
222
$
$
157
28
185
(a) Financing receivables include $10,019 million of impaired loans at Real Estate at June 30, 2011.
(b) Financing receivables include $122 million of construction loans at June 30, 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)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Real Estate
Debt
Business Properties
Total
2.5 %
3.6
2.7
160.6 %
57.0
127.2
134.4 %
50.8
110.5
3.8 %
1.9
3.3
1.3 %
1.2
1.2
159.0 %
53.6
130.0
4.3 %
2.0
3.7
June 30,
2011
3.2 %
1.6
2.8
4.12 %
4.08 %
4.41 %
131.0 %
50.9
111.1
June 30,
2010
5.1 %
2.0
4.4
4.8 %
1.9
4.1
June 30,
2010
2.4 %
1.0
2.1
4.3 %
1.3
3.5
Real Estate
December 31,
2010
March 31,
2011
3.6 %
3.8
3.7
June 30,
2010
Write-offs as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Delinquency
145.4 %
49.2
114.2
3.9 %
2.0
3.5
Real Estate
Debt
Business Properties
Total
3.2 %
3.8
3.4
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Real Estate
Debt
Business Properties
Total
3.2 %
3.9
3.3
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Real Estate
Debt
Business Properties
Total
2.6 %
3.9
2.9
June 30,
2010
September 30,
2010
1.8 %
1.0
1.6
June 30,
2010
5.74 %
5.40 %
(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
June 30,
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
$
$
40,731
21,047
42,178
7,141
8,528
119,625
$
$
June 30,
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
$
$
$
$
$
$
$
$
$
$
$
$
3,738
289
1,201
46
478
5,752
813
930
2,141
152
239
4,275
$
$
803
937
2,333
168
259
4,500
40,127
20,966
40,052
8,155
8,488
117,788
June 30,
2010
$
$
September 30,
2010
$
$
3,966
317
1,144
41
481
5,949
$
$
September 30,
2010
$
$
867
974
2,551
198
244
4,834
64
196
652
27
43
982
$
$
55
182
777
36
61
1,111
$
$
112
251
891
13
70
1,337
$
$
62
243
853
42
59
1,259
38,588
20,046
40,077
8,124
8,248
115,083
June 30,
2010
3,932
371
1,223
49
460
6,035
June 30,
2010
$
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
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
$
40,011
20,132
43,974
7,558
8,304
119,979
Allowance for losses (c)
December 31,
2010
March 31,
2011
790
934
1,846
143
218
3,931
$
September 30,
2010
Nonearning receivables (b)
December 31,
2010
3,843
295
1,004
41
461
5,644
$
June 30,
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
40,421
20,235
41,282
7,295
8,231
117,464
March 31,
2011
3,804
308
790
39
490
5,431
$
Financing receivables (a)
December 31,
2010
March 31,
2011
828
954
2,635
223
246
4,886
June 30,
2010
$
$
57
298
1,014
54
85
1,508
(a) Financing receivables include impaired loans of $2,770 million at June 30, 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)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
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
9.3 %
1.5
1.9
0.5
5.7
4.5
20.8 %
303.2
233.7
366.7
44.5
72.4
21.5 %
324.2
194.3
365.2
54.2
78.2
2.0 %
4.6
5.2
2.1
2.9
3.6
0.6 %
3.8
6.2
1.5
2.1
3.3
21.9 %
307.3
223.0
482.9
50.7
81.3
2.0 %
4.7
5.3
2.2
3.1
3.8
June 30,
2011
0.5 %
3.6
7.3
1.9
3.0
3.7
7.59 %
7.89 %
June 30,
2010
2.1 %
4.8
6.6
2.7
3.0
4.2
June 30,
2010
0.6 %
4.7
8.5
2.1
2.8
4.3
September 30,
2010
8.09 %
21.1 %
257.1
215.5
455.1
53.5
81.0
2.2 %
4.6
6.4
2.4
2.9
4.1
1.1 %
4.9
8.5
0.7
3.3
4.5
Consumer
December 31,
2010
March 31,
2011
10.2 %
1.9
3.1
0.6
5.6
5.2
June 30,
2010
Write-offs as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
2011
Delinquency
21.2 %
315.3
213.2
370.7
51.8
75.7
1.9 %
4.4
4.4
2.0
2.6
3.3
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
9.9 %
1.5
2.9
0.5
5.7
5.1
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
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
9.3 %
1.4
2.7
0.6
5.8
4.8
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2011
2010
2010
June 30,
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
9.5 %
1.5
2.4
0.6
5.6
4.8
June 30,
2010
0.6 %
5.6
10.1
2.4
3.8
5.0 %
June 30,
2010
8.58 %
8.95 %
(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)
June 30, 2011
Commercial
CLL
EFS
GECAS
Other
Total Commercial
Nonearning
financing
receivables (a)
Nonaccrual
financing
receivables (b)
$
$
3,488
136
64
87
3,775
5,013
140
64
161
5,378
Real Estate
1,003
9,885
Consumer
5,431
5,666
Total
$
10,209
$
20,929
(a) Nonearning financing receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning financing 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 financing 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 financing 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 financing receivables of $20.9 billion includes $10.2 billion classified as nonearning financing receivables. Substantially all of this difference relates to loans which are classified as nonaccrual financing receivables but are paying on a cash basis,
and therefore are excluded from nonearning financing 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
June 30,
2011
Recoveries
$
803
937
2,333
168
259
$
66
311
941
26
59
$
40
64
1
12
4
$
(150)
(664)
(1,688)
(126)
(152)
$
31
286
259
63
48
$
790
934
1,846
143
218
$
4,500
$
1,403
$
121
$
(2,780)
$
687
$
3,931
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (a)
Other (b)
Gross writeoffs
Balance
June 30,
2010
Recoveries
$
892
1,106
1,551
292
292
$
1,602
-
$
892
1,106
3,153
292
292
$
170
615
1,570
73
163
$
(103)
(113)
(1)
(43)
(35)
$
(180)
(935)
(2,320)
(191)
(217)
$
49
281
233
92
43
$
828
954
2,635
223
246
$
4,133
$
1,602
$
5,735
$
2,591
$
(295)
$
(3,843)
$
698
$
4,886
(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)
June 30, 2011
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at June 30, 2011
$
-
$
31,240
8,783
245
51
412
December 31, 2010
40,731
$
Total at December 31, 2010
$
-
$
June 30, 2010
$
$
Total at June 30, 2010
$
-
$
$
43,974
64,106
$
40,077
7,141
$
60,123
$
$
7,558
$
-
$
$
877
$
8,304
44,851
46,186
19,249
8,886
326
481
$
119,979
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
234
74
427
September 30, 2010
40,421
$
Total at September 30, 2010
$
-
$
61,517
$
40,052
$
61,018
$
7,295
$
-
$
$
8,231
8,155
$
117,464
Total
939
$
2,971
4,283
295
$
42,131
46,359
19,697
8,550
280
447
Other (a)
5,112
1,389
1,647
7
$
Total
849
2,736
4,432
214
-
Auto
$
7,433
5,565
6,421
1,493
54
$
Other (a)
4,645
1,328
1,320
2
Installment and
revolving credit
31,317
7,957
246
139
468
40,127
Auto
$
7,665
5,564
6,782
206
18
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
41,282
8,488
40,991
46,833
19,194
8,609
1,632
529
$
117,788
Total
987
$
3,017
3,932
312
$
119,625
Total
Other (a)
8,124
43,067
46,324
20,461
9,103
247
423
2,853
4,321
253
-
5,075
1,315
1,726
8
$
8,528
$
Auto
$
889
Other (a)
-
$
Total
2,755
4,677
207
-
4,700
1,341
1,516
1
7,060
5,255
6,016
1,641
74
$
$
Auto
Installment and
revolving credit
30,426
7,247
239
176
500
38,588
-
7,533
5,479
6,868
221
31
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
63,225
Other (a)
4,547
1,326
1,267
1
Installment and
revolving credit
31,100
8,108
249
105
449
40,011
$
7,782
5,675
7,384
196
10
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
42,178
Auto
8,248
41,064
45,578
17,749
8,293
1,817
582
$
115,083
(a) Represents mainly small and medium enterprise loans.
21
GE Capital - Consumer mortgage portfolio by country (a)
(In millions)
Financing
receivables
June 30, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
March 31, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K. (b) (d)
France (d)
Poland
Czech Republic
Hungary
Spain
All other
$
18,452
9,581
6,189
1,295
1,160
1,059
2,995
45.3 %
23.5
15.2
3.2
2.8
2.6
7.4
13.2 %
3.2
1.1
2.0
10.8
16.8
21.7
21.3 %
3.6
2.2
2.7
15.0
25.6
21.6
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,574
9,497
5,854
1,257
1,091
1,061
3,087
46.0 %
23.5
14.5
3.1
2.7
2.6
7.6
13.7 %
3.1
1.0
1.9
10.0
17.3
20.3
20.3 %
3.6
2.1
2.7
14.8
28.1
19.7
Total at June 30, 2011 (c)
$
40,731
100.0 %
9.3 %
13.6 %
Total at March 31, 2011
$
40,421
100.0 %
9.5 %
13.2 %
Financing
receivables
December 31, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
September 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,487
9,379
5,694
1,186
1,054
1,047
3,164
46.2 %
23.4
14.2
3.0
2.6
2.6
8.0
13.7 %
2.9
0.9
1.6
9.2
15.0
19.1
21.7 %
3.6
2.0
2.5
14.4
25.5
18.3
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,858
9,302
5,545
1,210
1,020
1,074
3,118
47.0 %
23.2
13.8
3.0
2.5
2.7
7.8
15.0 %
2.4
0.9
1.4
8.4
18.1
18.7
23.4 %
3.5
2.0
2.2
13.6
27.4
17.6
Total at December 31, 2010
$
40,011
100.0 %
9.3 %
13.7 %
Total at September 30, 2010
$
40,127
100 %
9.9 %
14.6 %
Financing
receivables
June 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,327
9,015
5,007
1,124
929
1,053
3,133
47.5 %
23.4
13.0
2.9
2.4
2.7
8.1
15.9 %
2.1
0.9
1.2
7.0
19.3
16.4
24.9 %
3.4
1.9
1.9
12.0
29.4
15.8
Total at June 30, 2010
$
38,588
100.0 %
10.2 %
15.3 %
(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 June 30, 2011, we had in repossession stock approximately 600 houses in the U.K., which had a value of approximately $0.1 billion.
(c) At June 30, 2011, net of credit insurance, approximately 27% 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 13% and have a loan-to-value ratio at origination of 75%. At June 30, 2011, 5% (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 86% and 57%, 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)
219
73
77
-
$
(72)
30
10
-
$
Balance
June 30,
2011
Recoveries
(366)
(133)
(147)
-
$
55
34
18
-
$
1,123
433
180
7
EFS
22
11
(1)
(4)
7
35
GECAS
20
(2)
-
(3)
-
15
Other
58
11
1
(17)
1
54
Total Commercial
(In millions)
CLL
Americas
Europe
Asia
Other
$
Balance
December 31,
2009
$
EFS
1,179
575
244
11
$
66
(10)
-
$
389
$
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (b)
$
2,045
1,245
575
234
11
$
(32)
$
Gross
write-offs
Other (a)
630
137
108
(1)
$
(670)
(10)
(70)
(23)
(2)
$
$
115
$
Balance
June 30,
2010
Recoveries
(558)
(288)
(94)
-
$
1,847
55
28
9
-
$
1,362
382
234
8
28
-
28
24
1
-
-
53
GECAS
104
-
104
35
-
(89)
-
50
Other
34
-
34
18
-
(3)
1
50
Total Commercial
$
2,175
$
56
$
2,231
$
951
$
(104)
$
(1,032)
$
93
$
2,139
(a) Other primarily included transfers to held for sale and 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
June 30,
2011
Recoveries
Real Estate
Debt
Business Properties
$
1,292
196
$
122
54
$
9
1
$
(341)
(70)
$
10
3
$
1,092
184
Total Real Estate
$
1,488
$
176
$
10
$
(411)
$
13
$
1,276
Provision
charged to
operations
Balance
January 1,
2010
Balance
June 30,
2010
Balance
December 31,
2009
Adoption of ASU 200916 & 17 (b)
Real Estate
Debt
Business Properties
$
1,358
136
$
(3)
45
$
1,355
181
$
548
97
$
(4)
(7)
$
(310)
(64)
$
1
-
$
1,590
207
Total Real Estate
$
1,494
$
42
$
1,536
$
645
$
(11)
$
(374)
$
1
$
1,797
(In millions)
Gross
write-offs
Other (a)
Recoveries
(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)
June 30,
2011
Region
March 31,
2011
Financing receivables
December 31,
2010
September 30,
2010
June 30,
2010
U.S.
Europe
Pacific Basin
Americas
$
22,724
4,543
2,992
6,548
$
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
Total (a)
$
36,807
$
39,022
$
40,211
$
42,481
$
44,006
June 30,
2011
Vintage profile
Originated in
pre-2008
2008
2009
2010
2011
Total
June 30,
2011
Property type
March 31,
2011
Financing receivables
December 31,
2010
September 30,
2010
June 30,
2010
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
8,459
9,057
5,181
3,978
3,358
3,725
1,109
144
1,796
$
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
Total (a)
$
36,807
$
39,022
$
40,211
$
42,481
$
44,006
June 30,
2011
Contractual maturities
$
22,963
12,814
93
604
333
Due in
2011 and prior (b)
2012
2013
2014
2015 and later
$
36,807
Total
$
8,405
8,193
4,154
3,672
12,383
$
36,807
(a) Represents total gross financing receivables for Real Estate only.
(b) Includes $1,392 million relating to loans with contractual maturities prior to June 30, 2011.
25
GE Capital - Real Estate equity overview (a)
(In millions, unless otherwise noted)
June 30,
2011
Region
Equity
December 31,
2010
March 31,
2011
September 30,
2010
June 30,
2010
U.S.
Europe
Pacific Basin
Americas
$
8,120
9,236
7,197
2,865
$
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
Total
$
27,418
$
28,486
$
28,869
$
29,413
$
29,099
June 30,
2011
Vintage profile (e)
Originated in
pre-2008
2008
2009
2010
2011
Total
$
$
June 30,
2011
Property type
Equity
December 31,
2010
March 31,
2011
September 30,
2010
June 30,
2010
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
14,770
4,215
3,265
2,322
1,163
16
602
368
697
$
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
Total
$
27,418
$
28,486
$
28,869
$
29,413
$
29,099
June 30,
2011
Key metrics
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
24,547
1,974
136
282
479
End of period vacancies (d)
27,418
Foreclosed properties (f)
March 31,
2011
23,665
$
1,425
$
6.0 %
20.2 %
$
606
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
25,127
1,463
5.6 %
20.7 %
$
714
(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)
June 30, 2011
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at June 30, 2011
$
December 31, 2010
Collateral type
GECAS
3,003
9,324
2,932
1,687
2,088
1,182
$
20,216
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at December 31, 2010
$
June 30, 2010
Collateral type
$
Total at June 30, 2010
$
32,885
-
$
32,885
$
GECAS
3,130
9,072
2,960
1,452
1,924
927
$
19,465
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
EFS
$
31,535
$
GECAS
3,025
9,128
3,073
1,549
1,839
1,073
$
19,687
$
877
$
877
$
EFS
31,535
-
$
30,818
$
-
$
5
2
6
13
$
$
1,089
$
-
$
5
2
7
14
$
$
1,217
$
-
$
53,991
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
34,665
9,077
2,960
1,454
1,924
2,023
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
52,103
Total at September 30, 2010
$
$
33,843
9,135
3,073
1,549
1,840
2,298
$
51,738
7
1
8
16
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
EFS
32,144
-
$
32,144
$
GECAS
3,469
8,783
3,008
1,402
1,893
1,125
$
19,680
$
Consumer
886
$
886
$
$
30,842
$
Total
$
35,285
9,251
2,917
1,436
2,045
2,000
$
52,934
5
2
6
EFS
30,842
-
-
13
Consumer
1,198
$
1,198
$
-
Total
$
34,311
8,789
3,008
1,404
1,893
2,329
$
51,734
6
2
6
14
Total
Consumer
1,217
March 31, 2011
Collateral type
35,888
9,329
2,932
1,689
2,088
2,065
Total
Consumer
1,089
EFS
30,818
-
Total
Consumer
27
GE Capital - Commercial aircraft asset details
June 30,
2011
Collateral type (In millions)
March 31,
2011
Loans and leases
December 31,
2010
September 30,
2010
June 30,
2010
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
25,558
8,724
3,228
5,095
2,093
$
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
Total (a)
$
44,698
$
44,128
$
44,028
$
42,950
$
43,044
June 30,
2011
Airline regions (In millions)
March 31,
2011
Loans and leases
December 31,
2010
September 30,
2010
June 30,
2010
U.S.
Europe
Pacific Basin
Americas
Other
$
13,571
10,010
8,933
5,655
6,529
$
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
Total (a)
$
44,698
$
44,128
$
44,028
$
42,950
$
43,044
June 30,
2011
Aircraft vintage profile (In millions)
0-5 years
6-10 years
11 - 15 years
15+ years
$
19,886
14,235
4,964
3,520
Total (b)
$
42,605
(a) Includes loans and financing leases of $11,937 million, $12,104 million, $12,615 million, $12,227 million, and $12,337 million (less non-aircraft loans and financing leases of $124 million, $120 million, $122 million,
$119 million, and $111 million) and ELTO of $32,885 million, $32,144 million, $31,535 million, $30,842 million, and $30,818 million, at June 30, 2011, March 31, 2011, December 31, 2010,
September 30, 2010, and June 30, 2010, respectively, related to commercial aircraft at GECAS.
(b) Excludes aircraft engine loans and leases of $2,093 million at June 30, 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 (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
2,897
915
1,887
1,523
3,708
1,441
2,197
2,597
$
95
10
23
38
25
44
7
9
$
Estimated
fair value
(10)
(228)
(302)
(173)
(143)
(84)
(84)
-
$
$
Equity
$
At December 31, 2010
Gross
Gross
unrealized
unrealized
gains
losses
Amortized
cost
2,982
697
1,608
1,388
3,590
1,401
2,120
2,606
$
3,490
918
2,099
1,619
3,242
1,478
1,804
2,663
$
169
4
14
7
39
8
3
$
Estimated
fair value
(14)
(232)
(355)
(183)
(190)
(111)
(58)
(5)
$
3,645
690
1,758
1,436
3,059
1,406
1,754
2,661
32
16
(3)
45
55
10
(26)
39
1,287
475
204
-
(31)
-
1,460
475
902
417
194
-
(9)
-
1,087
417
18,959
$
471
$
(1,058)
$
18,372
$
At June 30, 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 June 30, 2011
Gross
Gross
unrealized
unrealized
gains
losses
151
93
282
767
58
116
1,105
-
$
(6)
(15)
(7)
(123)
(4)
(4)
(3)
-
$
169
447
853
621
875
731
128
-
$
18,687
$
448
$
(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
(4)
(213)
(295)
(50)
(139)
(80)
(81)
-
$
357
137
166
779
111
123
642
1,613
$
(5)
(16)
(3)
(103)
(5)
(2)
(6)
(5)
$
337
443
920
652
902
673
105
-
$
(9)
(216)
(352)
(80)
(185)
(109)
(52)
-
-
-
6
(3)
-
-
34
(26)
69
(31)
-
-
46
(9)
-
-
2,641
$
(193)
$
3,830
$
(865)
$
3,974
$
(154)
$
4,066
$
(1,029)
(a) Substantially collateralized by U.S. mortgages.
30
GE Capital - Investments measured at fair value in earnings (a)
Asset balances at
June 30,
2011
Investment type (In millions)
Equities - trading
$
Assets held for sale (LOCOM)
December 31,
2010
475
$
417
Net earnings impact for
six months ending June
30, 2011
$
38
3,286
3,538
(15)
Assets of businesses held for sale (LOCOM)
895
3,127
(1)
Other (Investment companies and loans)
595
390
3
Total
$
5,251
$
7,472
$
25
(a) Excludes derivatives portfolio.
31
GE Capital - Ending Net Investment (ENI)
June 30,
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
March 31,
2011
577.1
$
$
581.1
September 30,
2010
$
596.2
June 30,
2010
$
589.2
(6.4)
(10.1)
(12.4)
(21.7)
(22.1)
(36.1)
(36.6)
(38.7)
(39.2)
(38.9)
534.6
$
(77.3)
$
569.8
December 31,
2010
457.3
523.1
$
(66.5)
$
456.6
530.0
$
(59.5)
$
470.5
535.3
$
(63.6)
$
471.7
528.2
(59.4)
$
468.8
32
GECC - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
June 30,
2011
$
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
March 31,
2011
458.1
78.8
$
452.8
76.1
5.8:1
$
458.1
(7.7)
(77.4)
373.0
December 31,
2010
$
5.9:1
$
452.8
(7.7)
(66.6)
378.5
465.4
72.9
September 30,
2010
$
481.4
70.5
6.4:1
$
465.4
(7.7)
(59.7)
398.0
June 30,
2010
$
476.6
69.8
6.8:1
$
481.4
(7.7)
(65.4)
408.3
6.8:1
$
476.6
(7.7)
(61.3)
407.6
Equity (b)
Add: hybrid debt
Adjusted equity
78.8
7.7
86.5
76.1
7.7
83.8
72.9
7.7
80.6
70.5
7.7
78.2
69.8
7.7
77.5
Adjusted leverage ratio
4.3:1
4.5:1
4.9:1
5.2:1
5.3:1
Tangible common equity to tangible assets ratio
(In billions)
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
78.8
(30.0)
$
76.1
(29.6)
$
72.9
(29.5)
$
70.5
(30.1)
$
69.8
(29.5)
Tangible common equity
$
48.8
$
46.5
$
43.4
$
40.4
$
40.3
Total assets
Less: Goodwill and other intangibles
$
577.1
(30.0)
$
569.8
(29.6)
$
581.1
(29.5)
$
596.1
(30.1)
$
589.2
(29.5)
Tangible assets
$
547.1
$
540.2
$
551.6
$
566.0
$
559.7
Tangible common equity to tangible assets
Tier 1 common ratio (c)
8.9 %
8.6 %
7.9 %
7.1 %
7.2 %
10.4 %
9.8 %
8.9 %
8.2 %
8.1 %
(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 June 30, 2011
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
$
20,818
3,182
2,876
2,881
3,853
2,810
2,693
3,302
$
1,809
120
131
172
33
133
88
62
$
Estimated
fair value
(116)
(244)
(319)
(203)
(145)
(91)
(85)
(28)
$
At December 31, 2010
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
22,511
3,058
2,688
2,850
3,741
2,852
2,696
3,336
$
21,233
2,961
3,092
3,009
3,407
2,883
2,242
3,358
$
1,576
45
95
145
16
116
82
57
$
Estimated
fair value
(237)
(282)
(378)
(230)
(193)
(132)
(58)
(47)
$
22,572
2,724
2,809
2,924
3,230
2,867
2,266
3,368
Retained interests
32
16
(3)
45
55
10
(26)
39
Equity
Available-for-sale
Trading
886
475
224
-
(31)
-
1,079
475
500
417
213
-
(8)
-
705
417
Total
(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
$
$
2,788
$
(1,265)
$
45,331
$
At June 30, 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
43,808
$
1,341
322
318
962
65
339
1,115
-
$
(29)
(20)
(8)
(129)
(4)
(7)
(3)
-
$
992
586
943
705
882
788
129
224
$
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
(87)
(224)
(311)
(74)
(141)
(84)
(82)
(28)
$
2,375
949
188
831
113
448
661
1,822
$
(81)
(43)
(4)
(104)
(5)
(12)
(6)
(47)
$
1,519
570
1,024
817
910
804
107
-
$
(156)
(239)
(374)
(126)
(188)
(120)
(52)
-
-
-
6
(3)
-
-
34
(26)
71
(31)
-
-
49
(8)
-
-
4,533
$
(231)
$
5,255
$
(1,034)
$
7,436
$
(310)
$
5,785
$
(1,281)
(a) Substantially collateralized by U.S. mortgages.
35
GECS - Funding
June 30,
2011
(In billions)
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
Commercial paper
Long-term debt (a)
Deposits / CD's
Alternate funding / other
Non-recourse borrowings of consolidated securitization entities
$
40.7
326.5
41.5
25.4
29.1
$
40.6
324.1
39.4
24.7
29.3
$
42.0
336.0
37.3
25.2
30.0
$
41.3
347.4
36.4
24.2
30.5
$
45.9
337.7
31.9
26.1
33.3
Total debt
$
463.2
$
458.1
$
470.5
$
479.8
$
474.9
$
53.7
$
53.0
$
51.8
$
52.1
$
51.7
Metrics
Bank lines
Commercial paper coverage (b):
Bank lines
Bank lines and cash and equivalents
132 %
323 %
130 %
296 %
123 %
267 %
126 %
282 %
112 %
242 %
Cash and equivalents
$
78.0
$
67.3
$
60.3
$
64.3
$
59.8
LT debt < 1 year
$
72.9
$
59.2
$
65.6
$
62.7
$
63.0
(a) Includes $45 billion, $45 billion, $53 billion, $55 billion, and $58 billion of long term debt issued under the TLGP program at June 30, 2011, March 31, 2011, December 31, 2010,
September 30, 2010, and June 30, 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)
June 30,
2011
$
463.2
75.1
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
March 31,
2011
$
458.1
72.1
6.2:1
$
463.2
(7.7)
(78.1)
377.4
December 31,
2010
$
6.4:1
$
458.1
(7.7)
(67.4)
383.0
470.6
69.0
September 30,
2010
$
486.5
66.9
6.8:1
$
470.6
(7.7)
(60.4)
402.5
June 30,
2010
$
481.7
67.3
7.3:1
$
486.5
(7.7)
(66.0)
412.8
7.2:1
$
481.7
(7.7)
(61.7)
412.3
Equity (b)
Add: hybrid debt
Adjusted equity
75.1
7.7
82.8
72.1
7.7
79.8
69.0
7.7
76.7
66.9
7.7
74.6
67.3
7.7
75.0
Adjusted leverage ratio
4.6:1
4.8:1
5.2:1
5.5:1
5.5:1
Tangible common equity to tangible assets ratio
(In billions)
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
June 30,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
75.1
(30.0)
$
72.1
(29.6)
$
69.0
(29.5)
$
66.9
(30.1)
$
67.3
(29.9)
Tangible common equity
$
45.1
$
42.5
$
39.5
$
36.8
$
37.4
Total assets
Less: Goodwill and other intangibles
$
605.6
(30.0)
$
597.7
(29.6)
$
608.7
(29.5)
$
624.7
(30.1)
$
617.9
(29.9)
Tangible assets
$
575.6
$
568.1
$
579.2
$
594.6
$
588.0
Tangible common equity to tangible assets
7.8 %
7.5 %
6.8 %
6.2 %
6.3 %
Tier 1 common ratio (c)
9.1 %
8.6 %
7.8 %
7.3 %
7.1 %
(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.
39
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.
40
Similar pages