Download GE Capital Second Quarter 2012

GE Capital
Second quarter 2012 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; potential market disruptions or other impacts arising in the United States or Europe from developments in the European
sovereign debt situation; 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 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 excess interest refund claims (GE Money Japan); pending and future mortgage securitization
claims and litigation in connection with WMC, which may affect our estimates of liability, including possible loss estimates; 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 adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our
quarterly dividend at the planned level; GECC’s ability to pay dividends to GE at the planned level; 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, joint ventures and dispositions and our success in completing announced transactions
and integrating acquired businesses; the impact of potential information technology or data security breaches; 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 2012 supplemental information
Table of Contents
Page #
1. GE Capital structure
a) GE Capital structure
1
2. Financial statements
a) GE Capital - Condensed statement of earnings
3
b) GE Capital - Condensed statement of comprehensive income
4
c) GE Capital - Condensed statement of financial position
5
d) GE Capital - Continuing operations
6
3. GE Capital asset quality
a) Assets by region
8
b) Assets in selected emerging markets
9
c) Portfolio overview and ratios
10-17
d) Nonearning and nonaccrual financing receivables
18
e) Consumer allowance for losses on financing receivables
19
f) Consumer financing receivables by region
20
g) Consumer mortgage portfolio by country
21
h) Commercial allowance for losses on financing receivables
22
i) Real estate allowance for losses on financing receivables
23
j) Commercial real estate debt and equity overview
24-25
k) Equipment leased to others overview
26
l) Commercial aircraft asset details
27
4. GE Capital other key areas
a) Investment securities
29
b) Investments measured at fair value in earnings
30
c) Ending net investment
31
d) Net interest margin
32
e) GE Capital ratios
33
f) Funding
34
5. Appendix
a) Glossary
36-37
GE Capital structure
General Electric Company
General Electric Capital
Corporation (GECC) (a)
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
Corporate
- Treasury operations
- Run-off insurance operations
(a- On February 22, 2012, General Electric Company (“GE”) merged its wholly-owned subsidiary, General Electric Capital Services, Inc. (“GECS”), with and into GECS’ wholly-owned subsidiary, General Electric Capital Corporation
(“GECC”). The merger simplified GE’s financial services’ corporate structure by consolidating financial services entities and assets within our organization and simplifying Securities and Exchange Commission and regulatory
reporting. Upon the merger, GECC became the surviving corporation and assumed all of GECS’ rights and obligations and became wholly-owned directly by General Electric. GE’s financial services segment, GE Capital, will continue
to comprise the continuing operations of GECC, which now includes the run-off insurance operations previously held and managed in GECS. The directors and officers of GECC remain the same.
1
Financial statements
2
GE Capital - Condensed statement of earnings (a)
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
June 30,
2012
$
11,432
26
11,458
March 31,
2012
$
11,412
30
11,442
For three months ending
December 31,
2011
$
11,545
32
11,577
September 30,
2011
$
11,983
32
12,015
For six months ending
June 30,
June 30,
2012
2011
June 30,
2011
$
12,398
42
12,440
$
22,844
56
22,900
$
25,392
84
25,476
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 19, 22-24)
Depreciation and amortization
Total costs and expenses
2,988
3,090
23
702
743
1,674
9,220
3,196
2,901
25
771
863
1,695
9,451
3,128
3,144
27
745
1,058
1,712
9,814
3,556
3,260
30
755
961
1,837
10,399
3,598
3,449
38
790
792
1,792
10,459
6,184
5,991
48
1,473
1,606
3,369
18,671
7,182
6,926
78
1,559
1,932
3,568
21,245
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
2,238
(102)
1,991
(187)
1,763
(65)
1,616
(59)
1,981
(346)
4,229
(289)
4,231
(775)
Earnings from continuing operations
Earnings (loss) from discontinued operations, net of taxes
2,136
(553)
1,804
(217)
1,698
(240)
1,557
(64)
1,635
195
3,940
(770)
3,456
230
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,583
14
1,587
12
1,458
38
1,493
38
1,830
20
3,170
26
3,686
51
Net earnings (loss) attributable to GE Capital
$
1,569
$
1,575
$
1,420
$
1,455
$
1,810
$
3,144
$
3,635
(a) On February 22, 2012, our former parent GECS, merged with and into GECC, in a transaction among entities under common control. Prior period results are retrospectively adjusted to furnish
comparative information.
3
GE Capital - Condensed statement of comprehensive income (a)
June 30,
2012
(In millions)
Net Earnings
Less: Net earnings attributable to noncontrolling interests
Net earnings attributable to GECC
Other comprehensive income (loss), net of tax
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Other comprehensive income (loss), net of tax
Less: Other comprehensive income (loss) attributable to noncontrolling interests
Other comprehensive income (loss) attributable to GECC
Comprehensive income, net of tax
Less: Other comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to GECC
For three months ending
December 31,
2011
March 31,
2012
1,583
14
1,569
$
1,587
12
1,575
$
1,458
38
1,420
$
1,493
38
1,455
$
1,830
20
1,810
$
3,170
26
3,144
$
3,686
51
3,635
$
$
$
510
(274)
112
(5)
343
1
342
$
$
390
984
(190)
1,184
(10)
1,194
$
$
248
(810)
(49)
29
(582)
21
(603)
$
$
155
(690)
476
(210)
(269)
1
(270)
$
$
330
116
72
(24)
494
(10)
504
$
$
180
(390)
40
19
(151)
11
(162)
$
202
2,540
(262)
(1)
2,479
(9)
2,488
$
1,432
25
1,407
$
2,081
2
2,079
$
1,189
39
1,150
$
911
59
852
$
3,014
10
3,004
$
3,513
27
3,486
$
6,165
42
6,123
June 30,
2012
(In millions)
$
Dividends and other transactions with shareowners
Other comprehensive income (loss) - net
Increase / (decrease) from net earnings attributable to the Company
Balance at end of period
For six months ending
June 30,
June 30,
2012
2011
June 30,
2011
$
GE Capital - Condensed statement of changes in shareowners' equity (a)
Changes in GE Capital shareowners' equity
Balance at beginning of period
September 30,
2011
79,192
March 31,
2012
$
(772)
(162)
1,569
$
79,827
77,110
For three months ending
December 31,
2011
$
3
504
1,575
$
79,192
75,959
September 30,
2011
$
1
(270)
1,420
$
77,110
75,108
$
(1)
(603)
1,455
$
75,959
For six months ending
June 30,
June 30,
2012
2011
June 30,
2011
72,104
$
1,194
1,810
$
75,108
77,110
$
(769)
342
3,144
$
79,827
68,984
1
2,488
3,635
$
75,108
(a) On February 22, 2012, our former parent GECS, merged with and into GECC, in a transaction among entities under common control. Prior period results are retrospectively adjusted to furnish
comparative information.
4
GE Capital - Condensed statement of financial position (a)
(In millions)
Assets
Cash and equivalents
Investment securities (see page 29)
Inventories
Financing receivables - net (see pages 10 - 17)
Other receivables
Property, plant & equipment, less accumulated amortization
of $23,671, $23,864, $23,615, $24,307 and $24,977
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 34)
Accounts payable
Non-recourse borrowings of consolidated securitization entities (see page 34)
Bank deposits (see page 34)
Long-term borrowings (see page 34)
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,
2012
$
March 31,
2012
66,252
47,906
60
273,984
13,701
$
December 31,
2011
76,165
47,814
42
281,383
14,000
$
51,520
27,326
1,468
71,672
640
1,332
51,969
27,072
1,443
71,897
3,039
1,481
76,702
47,359
51
288,847
13,390
September 30,
2011
$
51,419
27,230
1,546
75,612
711
1,669
83,278
46,442
44
293,204
13,689
June 30,
2011
$
52,328
27,726
1,710
79,536
3,050
2,055
77,983
45,331
52
300,131
14,263
55,326
28,173
1,851
74,590
895
7,039
$
558,804
$
573,362
$
584,536
$
603,062
$
605,634
$
119,796
7,700
30,696
41,942
225,539
28,328
14,759
7,392
283
1,783
$
132,028
8,150
29,544
41,106
229,195
30,227
14,354
7,268
305
1,226
$
136,333
7,239
29,258
43,115
234,391
30,198
17,334
7,052
345
1,471
$
126,866
7,995
29,022
41,515
259,404
30,405
22,886
4,440
1,813
1,552
$
123,643
7,870
29,075
41,548
268,962
29,854
23,130
2,759
527
1,957
Total liabilities
478,218
493,403
506,736
525,898
529,325
Capital stock
Accumulated other comprehensive income - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Additional paid-in-capital
Retained earnings
-
-
-
-
-
476
(673)
(989)
(568)
29,859
51,722
298
(274)
(1,029)
(587)
27,631
53,153
(33)
(399)
(1,101)
(563)
27,628
51,578
(188)
303
(1,588)
(353)
27,627
50,158
(436)
1,135
(1,541)
(381)
27,628
48,703
Total GE Capital shareowners' equity
79,827
79,192
77,110
75,959
75,108
759
767
690
1,205
1,201
80,586
79,959
77,800
77,164
76,309
Noncontrolling interests
Total equity
Total liabilities and equity
$
558,804
$
573,362
$
584,536
$
603,062
$
605,634
(a) On February 22, 2012, our former parent GECS, merged with and into GECC, in a transaction among entities under common control. Prior period results are retrospectively adjusted to furnish
comparative information.
5
GE Capital continuing operations (a)
June 30,
2012
(In millions)
Revenues
Less: Interest expense
Net revenues
$
11,458
(2,988)
8,470
March 31,
2012
$
11,442
(3,196)
8,246
For three months ending
December 31,
2011
$
11,577
(3,128)
8,449
September 30,
2011
$
12,015
(3,556)
8,459
For six months ending
June 30,
June 30,
2012
2011
June 30,
2011
$
12,440
(3,598)
8,842
$
22,900
(6,184)
16,716
$
25,476
(7,182)
18,294
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
2,804
1,674
1,011
5,489
2,739
1,695
958
5,392
2,876
1,712
1,040
5,628
2,811
1,837
1,234
5,882
2,802
1,792
1,475
6,069
5,543
3,369
1,969
10,881
5,533
3,568
3,030
12,131
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
2,981
(743)
2,854
(863)
2,821
(1,058)
2,577
(961)
2,773
(792)
5,835
(1,606)
6,163
(1,932)
Earnings before income taxes
Benefit (provision) for income taxes
2,238
(102)
1,991
(187)
1,763
(65)
1,616
(59)
1,981
(346)
4,229
(289)
4,231
(775)
Earnings from continuing operations before noncontrolling interests
Less: Net earnings (loss) attributable to noncontrolling interests
$
2,136
14
$
1,804
12
$
1,698
38
$
1,557
38
$
1,635
20
$
3,940
26
$
3,456
51
GE Capital segment profit
$
2,122
$
1,792
$
1,660
$
1,519
$
1,615
$
3,914
$
3,405
June 30,
2012
(In millions)
Segment profit
CLL
Consumer
Real Estate
EFS
GECAS
$
$
GE Capital corporate items and eliminations
GE Capital segment profit
$
March 31,
2012
626
907
221
122
308
2,184
(62)
$
2,122
$
$
For three months ending
December 31,
2011
685
829
56
71
318
1,959
(167)
$
1,792
$
$
September 30,
2011
777
617
(153)
110
315
1,666
(6)
$
1,660
$
$
For six months ending
June 30,
June 30,
2012
2011
June 30,
2011
688
803
(82)
79
208
1,696
(177)
$
1,519
$
$
701
1,042
(335)
139
321
1,868
(253)
$
1,615
$
$
1,311
1,736
277
193
626
4,143
(229)
$
3,914
$
$
1,255
2,283
(693)
251
627
3,723
(318)
3,405
(a) On February 22, 2012, our former parent GECS, merged with and into GECC, in a transaction among entities under common control. Prior period results are retrospectively adjusted to furnish
comparative information.
6
GE Capital asset quality
7
GE Capital - Assets by region (a)
(In millions)
June 30,
2012
Property, plant and
equipment (net)
Financing
receivables (net)
135,986
$
$
316,812
U.S. (b)
Europe (c)
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other (d)
$
Total
$
273,984
$
51,969
$
557,323
Total at March 31, 2012
$
281,383
$
51,520
$
572,030
Total at December 31, 2011
$
288,847
$
51,419
$
582,867
Total at September 30, 2011
$
293,204
$
52,328
$
601,007
Total at June 30, 2011
$
300,131
$
55,326
$
598,595
69,207
16,143
23,630
16,792
12,226
10,533
Total assets
4,469
194
2,640
1,447
32,686
$
92,671
23,413
45,627
27,043
51,757
At
March 31,
2012
December 31,
2011
September 30,
2011
June 30,
2011
Total assets
Total assets
Total assets
Total assets
327,085
$
96,735
25,136
45,733
26,981
50,360
$
572,030
331,967
$
98,651
24,509
46,749
30,400
50,591
$
582,867
337,868
$
103,999
26,666
47,997
31,814
52,663
$
601,007
326,441
109,310
29,561
48,023
32,141
53,119
$
598,595
(a) Excludes assets of discontinued operations.
(b) Total assets include our global Treasury operations, including both U.S. and non U.S. cash and equivalents.
(c) Total assets include non-financing assets (cash, goodwill, and property, plant and equipment) of approximately $10,500 million at June 30, 2012.
(d) Includes total assets of $49,927 million at GECAS, approximately $12,400 million of which relates to European airlines and other investments at June 30, 2012.
8
GE Capital - Assets in selected emerging markets
(In millions)
Selected emerging markets (a)
Eastern Europe
Poland
Czech Republic
Hungary
Total Eastern Europe
June 30,
2012
Property, plant and
equipment (net)
Financing
receivables (net)
$
7,723
4,829
2,680
15,232
$
101
48
34
183
Total assets
$
10,598
6,815
3,916
21,329
$
At
March 31,
2012
December 31,
2011
September 30,
2011
June 30,
2011
Total assets
Total assets
Total assets
Total assets
11,367
7,546
4,016
22,929
$
10,942
7,195
4,043
22,180
$
12,376
7,305
4,497
24,178
$
13,689
7,844
4,817
26,350
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
1,131
117
1,248
14
14
1,475
1,737
3,212
1,501
1,699
3,200
1,495
1,619
3,114
1,682
1,636
3,318
1,808
1,618
3,426
Americas
Mexico
Total Americas
5,212
5,212
799
799
7,618
7,618
7,732
7,732
8,215
8,215
8,253
8,253
8,344
8,344
Total
$
21,692
$
996
$
32,159
Total at March 31, 2012
$
22,549
$
974
$
33,861
Total at December 31, 2011
$
22,209
$
999
$
33,509
Total at September 30, 2011
$
24,196
$
992
$
35,749
Total at June 30, 2011
$
25,684
$
1,070
$
38,120
$
33,861
$
33,509
$
35,749
$
38,120
(a) We have disclosed here selected emerging markets where our total assets at June 30, 2012 exceed $1 billion. Assets of discontinued operations are excluded.
9
GE Capital - CLL portfolio overview (a) (b)
(In millions, unless otherwise noted)
Financing receivables (c)
December 31,
2011
Balances
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
$
$
March 31,
2012
77,241
34,722
11,313
711
123,987
$
$
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
$
$
1,739
1,390
232
9
3,370
$
$
$
662
484
87
1
1,234
$
$
$
802
458
112
2
1,374
$
$
80,505
36,899
11,635
436
129,475
$
$
$
$
1,862
1,167
269
11
3,309
$
$
889
400
157
4
1,450
81,072
37,130
11,914
469
130,585
June 30,
2011
$
$
September 30,
2011
$
$
Allowance for losses (e)
December 31,
2011
March 31,
2012
1,967
1,086
230
16
3,299
$
$
995
403
150
5
1,553
121
33
29
183
$
$
133
26
51
2
212
$
$
120
50
14
2
186
$
$
153
70
40
263
2,060
1,156
266
6
3,488
$
September 30,
2011
$
81,518
37,897
11,759
585
131,759
June 30,
2011
June 30,
2011
$
1,124
433
180
6
1,743
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
1,664
1,354
245
9
3,272
$
$
Nonearning receivables (d)
December 31,
2011
March 31,
2012
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
79,645
35,613
11,048
382
126,688
September 30,
2011
June 30,
2011
$
$
139
64
71
274
(a) During the third quarter of 2011, we transferred our Railcar lending and leasing portfolio from CLL Other to CLL Americas. Prior-period amounts were reclassified to conform to the current-period presentation.
(b) Local currency exposure includes amounts payable to the Corporation by borrowers with a country of residence other than the one in which the credit is booked.
(c) Financing receivables include impaired loans of $5,811 million at June 30, 2012.
(d) 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.
(e) 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.
10
GE Capital - CLL portfolio overview (a)
Ratios
Nonearning receivables as a percent of financing receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
2.3 %
4.0
2.1
1.3
2.7
38.1 %
34.8
37.5
11.1
36.6
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
2.4 %
2.9
1.9
3.4
2.5
47.7 %
34.3
58.4
36.4
43.8
50.6 %
37.1
65.2
31.3
47.1
Allowance for losses as a percent of total financing receivables (c)
March 31,
December 31,
September 30,
2012
2011
2011
1.0 %
1.3
1.0
0.5
1.1
1.1 %
1.1
1.3
0.9
1.1
0.6 %
0.4
1.0
0.6
June 30,
2012
0.7 %
0.3
1.8
2.0
0.7
March 31,
2012
1.90 %
2.05 %
0.6 %
0.5
0.5
1.8
0.6
CLL
December 31,
2011
1.99 %
2.5 %
3.1
2.3
1.0
2.6
June 30,
2011
54.6 %
37.5
67.7
100.0
50.0
June 30,
2011
1.2 %
1.1
1.3
1.1
1.2
Write-offs as a percent of financing receivables (d)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
Delinquency
48.2 %
33.8
45.7
22.2
42.0
0.9 %
1.4
0.8
0.1
1.0
CLL
Americas
Europe
Asia
Other
Total
2.3 %
3.2
2.3
2.5
2.6
Allowance for losses as a percent of nonearning receivables (c)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
CLL
Americas
Europe
Asia
Other
Total
2.1 %
3.8
2.2
2.4
2.6
June 30,
2011
1.4 %
1.1
1.5
1.0
1.3
June 30,
2011
0.8 %
0.7
1.4
0.8
September 30,
2011
1.99 %
0.7 %
0.7
2.4
0.8
June 30,
2011
1.94 %
(a) During the third quarter of 2011, we transferred our Railcar lending and leasing portfolio from CLL Other to CLL Americas. Prior-period amounts were reclassified to conform to the current-period presentation.
(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 judgmen
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 lev
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.
(d) 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.
11
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Balances
June 30,
2012
EFS
GECAS
Other
$
5,159
12,046
587
$
June 30,
2012
EFS
GECAS
Other
$
2
56
22
$
$
12
32
12
$
29
17
42
$
$
5,912
11,901
1,282
$
5,977
11,841
1,388
June 30,
2011
$
Nonearning receivables (b)
December 31,
September 30,
2011
2011
$
22
55
65
Allowance for losses (c)
December 31,
2011
March 31,
2012
25
14
20
$
26
17
37
$
135
62
71
$
September 30,
2011
$
36
14
43
24
11
10
$
-
$
(1)
1
16
$
(1)
(1)
12
6,143
11,952
1,517
June 30,
2011
136
64
87
June 30,
2011
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
EFS
GECAS
Other
5,287
11,721
681
March 31,
2012
June 30,
2012
EFS
GECAS
Other
Financing receivables (a)
December 31,
September 30,
2011
2011
March 31,
2012
35
15
54
June 30,
2011
$
(7)
3
8
(a) Financing receivables include $2 million, $21 million, and $46 million of impaired loans at EFS, GECAS, and Other, respectively, at June 30, 2012.
(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.
12
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
EFS
GECAS
Other
%
0.5
3.7
F %
57.1
54.5
0.2 %
0.3
2.0
86.2 %
82.4
47.6
118.2 %
30.9
56.9
0.5 %
0.1
2.9
0.4 %
0.1
2.9
1.8 %
0.4
6.3
-
%
(0.1) %
4.8
2.2 %
0.5
5.7
June 30,
2011
26.7 %
22.6
60.6
25.7 %
23.4
62.1
June 30,
2011
0.6 %
0.1
3.1
Write-offs (net) as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
EFS
GECAS
Other
2.3 %
0.5
5.1
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
EFS
GECAS
Other
0.4 %
0.5
5.1
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
EFS
GECAS
Other
0.5 %
0.1
6.2
June 30,
2011
(0.1) %
3.3
0.6 %
0.1
3.6
June 30,
2011
(0.4) %
0.1
2.0
(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.
13
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Financing receivables (a)
December 31,
2011
Balances
June 30,
2012
Real Estate
Debt (b)
Business Properties (e)
Total
$
$
March 31,
2012
22,409
5,301
27,710
$
$
June 30,
2012
Real Estate
Debt
Business Properties
Total
$
$
Real Estate
Debt
Business Properties
Total
$
$
$
$
$
$
$
541
249
790
$
$
949
140
1,089
25,748
8,630
34,378
June 30,
2011
$
$
September 30,
2011
$
$
714
314
1,028
$
$
978
163
1,141
123
23
146
$
$
153
33
186
$
$
105
35
140
$
$
151
36
187
680
323
1,003
$
September 30,
2011
$
27,750
9,057
36,807
June 30,
2011
June 30,
2011
$
1,092
184
1,276
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
Real Estate
Debt
Business Properties
Total
$
812
117
929
$
24,501
8,248
32,749
Allowance for losses (d)
December 31,
2011
March 31,
2012
682
105
787
$
$
522
239
761
$
June 30,
2012
$
Nonearning receivables (c)
December 31,
2011
March 31,
2012
403
227
630
$
23,518
8,013
31,531
September 30,
2011
June 30,
2011
$
$
91
27
118
(a) Financing receivables include $7,466 million of impaired loans at Real Estate at June 30, 2012.
(b) Financing receivables include $55 million of construction loans at June 30, 2012.
(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.
(e) Transferred $2.4 billion of financing receivables to assets held for sale reflecting our commitment to sell a portion of the Business Property business in Real Estate.
14
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
Real Estate
Debt
Business Properties
Total
1.8 %
4.3
2.3
169.2 %
46.3
124.9
175.4 %
56.2
137.8
3.5 %
1.5
2.9
3.9 %
1.7
3.3
2.1 %
1.4
2.0
June 30,
2012
2.5 %
1.6
2.3
Real Estate
December 31,
2011
March 31,
2012
2.81 %
1.7 %
1.7
1.7
3.08 %
2.76 %
2.5 %
3.6
2.7
June 30,
2011
137.0 %
51.9
111.0
160.6 %
57.0
127.2
June 30,
2011
3.8 %
1.9
3.3
Write-offs as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
Delinquency
155.6 %
49.0
122.1
3.0 %
2.0
2.8
Real Estate
Debt
Business Properties
Total
2.8 %
3.6
3.0
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
Real Estate
Debt
Business Properties
Total
2.2 %
3.0
2.4
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
Real Estate
Debt
Business Properties
Total
2.2 %
3.0
2.4
June 30,
2011
3.9 %
2.0
3.5
June 30,
2011
2.3 %
1.6
2.1
September 30,
2011
4.18 %
1.3 %
1.2
1.2
June 30,
2011
4.12 %
(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.
15
GE Capital - Consumer portfolio overview
(In millions, unless otherwise noted)
Balances
June 30,
2012
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
$
$
33,826
17,960
45,531
4,740
7,643
109,700
$
$
$
2,720
243
773
28
380
4,144
$
$
$
481
665
1,724
79
179
3,128
$
$
$
498
726
1,845
88
195
3,352
$
$
35,550
18,544
46,689
5,691
7,244
113,718
$
$
$
$
2,870
263
990
43
419
4,585
$
$
546
717
2,008
101
199
3,571
38,018
19,801
43,249
6,462
8,017
115,547
June 30,
2011
$
$
September 30,
2011
$
$
Allowance for losses (c)
December 31,
2011
March 31,
2012
3,098
299
882
35
441
4,755
$
$
September 30,
2011
$
$
622
816
1,953
123
211
3,725
43
121
575
11
37
787
$
$
85
143
641
17
46
932
$
$
116
130
601
15
33
895
$
$
47
172
537
15
45
816
39,990
21,047
42,178
7,141
8,528
118,884
June 30,
2011
3,266
308
790
39
490
4,893
June 30,
2011
$
$
Write-offs (net) - for three months ending
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
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
2,863
253
876
30
381
4,403
$
$
September 30,
2011
Nonearning receivables (b)
December 31,
2011
March 31,
2012
June 30,
2012
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
35,257
18,963
44,283
5,166
7,520
111,189
$
June 30,
2012
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
Financing receivables (a)
December 31,
2011
March 31,
2012
667
934
1,846
143
218
3,808
June 30,
2011
$
$
45
195
652
27
43
962
(a) Financing receivables include impaired loans of $3,003 million at June 30, 2012.
(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.
16
GE Capital - Consumer portfolio overview
Nonearning receivables as a percent of financing receivables (a)
March 31,
December 31,
September 30,
2012
2011
2011
Ratios
June 30,
2012
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
8.0 %
1.4
1.7
0.6
5.0
3.8
17.7 %
273.7
223.0
282.1
47.1
75.5
19.0 %
272.6
202.8
234.9
47.5
77.9
20.1 %
272.9
221.4
351.4
47.8
78.3
1.4 %
3.8
4.2
1.7
2.6
3.0
1.5 %
3.9
4.3
1.8
2.7
3.1
1.6 %
4.1
4.5
1.9
2.6
3.2
Write-offs as a percent of financing receivables (c)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
0.5 %
2.6
5.1
0.9
2.0
2.9
June 30,
2012
Delinquency
17.4 %
287.0
210.6
293.3
51.2
76.1
1.4 %
3.7
3.8
1.7
2.3
2.9
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
8.1 %
1.5
2.0
0.5
5.5
4.1
Allowance for losses as a percent of total financing receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
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
8.1 %
1.4
2.1
0.8
5.8
4.0
Allowance for losses as a percent of nonearning receivables (b)
March 31,
December 31,
September 30,
2012
2011
2011
June 30,
2012
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
8.1 %
1.3
2.0
0.6
5.1
4.0
1.0 %
3.1
5.6
1.3
2.5
3.3
Consumer
December 31,
2011
March 31,
2012
6.74 %
1.3 %
2.7
5.3
1.0
1.7
3.1
6.67 %
6.93 %
0.5 %
3.4
5.0
0.9
2.2
2.8
September 30,
2011
7.22 %
June 30,
2011
8.2 %
1.5
1.9
0.5
5.7
4.1
June 30,
2011
20.4 %
303.2
233.7
366.7
44.5
77.8
June 30,
2011
1.7 %
4.4
4.4
2.0
2.6
3.2
June 30,
2011
0.5 %
3.8
6.2
1.5
2.1
3.3 %
June 30,
2011
7.23 %
(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.
17
GE Capital - Nonearning and nonaccrual financing receivables
($ millions)
June 30, 2012
Commercial
CLL
EFS
GECAS
Other
Total Commercial
Nonearning
financing
receivables (a)
Nonaccrual
financing
receivables (b)
$
$
Real Estate
Consumer
Total
$
3,370
2
56
22
3,450
4,792
52
344
46
5,234
630
5,380
4,144
4,373
8,224
$
14,987
(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 $15.0 billion includes $8.2 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.
18
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
credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
Balance
January 1,
2012
Provision charged
to operations
Gross
write-offs (b)
Other (a)
Balance
June 30,
2012
Recoveries (b)
$
546
717
2,008
101
199
$
65
220
937
15
55
$
(2)
(8)
(5)
(9)
8
$
(165)
(543)
(1,488)
(77)
(124)
$
37
279
272
49
41
$
481
665
1,724
79
179
$
3,571
$
1,292
$
(16)
$
(2,397)
$
678
$
3,128
Balance
January 1,
2011
Provision charged
to operations
Gross
write-offs (b)
Other (a)
Balance
June 30,
2011
Recoveries (b)
$
689
937
2,333
168
259
$
30
311
941
26
59
$
32
64
1
12
4
$
(112)
(664)
(1,688)
(126)
(152)
$
28
286
259
63
48
$
667
934
1,846
143
218
$
4,386
$
1,367
$
113
$
(2,742)
$
684
$
3,808
(a) Other primarily included the effects of currency exchange.
(b) Net write-offs (write-offs less recoveries) in certain portfolios may exceed the beginning allowance for losses as our revolving credit portfolios turn over more than once per year or, in all portfolios, can reflect losses that are
incurred subsequent to the beginning of the fiscal year due to information becoming available during the current year, which may identify further deterioration on existing financing receivables.
19
GE Capital - Consumer financing receivables by region
(In millions)
June 30, 2012
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at June 30, 2012
$
-
$
26,270
7,094
190
272
December 31, 2011
33,826
$
Total at December 31, 2011
$
-
$
June 30, 2011
$
$
Total at June 30, 2011
$
-
$
$
46,689
65,233
$
42,178
4,740
$
63,225
$
$
5,691
$
-
$
$
838
$
7,244
47,527
40,259
17,289
8,179
152
312
$
113,718
March 31, 2012
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at March 31, 2012
$
-
$
27,242
7,493
208
314
September 30, 2011
35,257
$
Total at September 30, 2011
$
-
$
63,246
$
43,249
$
63,050
$
5,166
$
-
$
$
7,520
6,462
$
111,189
Total
885
$
2,542
4,418
172
$
45,111
39,647
17,485
8,490
141
315
Other (a)
4,187
1,195
1,079
1
$
Total
828
2,044
4,493
151
4
-
Auto
$
7,438
5,154
7,033
171
5
$
Other (a)
3,592
696
878
-
Installment and
revolving credit
29,031
8,363
225
34
365
38,018
Auto
$
6,769
4,803
7,253
137
1
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
44,283
8,017
44,134
43,198
19,130
8,509
205
371
$
115,547
Total
889
$
2,755
4,677
207
$
109,700
Total
Other (a)
7,141
46,894
38,004
16,461
7,939
129
273
2,111
4,137
155
3
-
4,547
1,326
1,267
1
$
7,643
$
Auto
$
1,363
Other (a)
-
$
Total
1,870
4,301
104
5
-
3,759
997
935
-
7,782
5,675
7,384
196
10
$
$
Auto
Installment and
revolving credit
30,499
8,783
245
51
412
39,990
-
6,850
4,658
6,884
149
3
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
63,491
Other (a)
3,364
630
746
-
Installment and
revolving credit
27,539
7,497
205
309
35,550
$
6,500
4,436
6,899
124
1
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
45,531
Auto
8,528
43,067
45,583
20,461
9,103
247
423
$
118,884
(a) Represents mainly small and medium enterprise loans.
20
GE Capital - Consumer mortgage portfolio by country (a)
(In millions)
Financing
receivables
June 30, 2012
As a % of total
Nonearning
receivables
Delinquent more than
30 days
Financing
receivables
March 31, 2012
As a % of total
Nonearning
receivables
Delinquent more than
30 days
U.K. (b) (d)
France (d)
Poland
Czech Republic
Netherlands
Hungary
Spain
All other
$
16,344
8,025
5,162
1,042
839
781
833
800
48.3 %
23.7
15.3
3.1
2.5
2.3
2.5
2.4
12.2 %
3.4
1.3
2.5
1.6
17.8
14.2
9.4
19.9 %
3.8
2.6
3.2
2.0
22.4
26.6
11.2
U.K.
France
Poland
Czech Republic
Netherlands
Hungary
Spain
All other
$
16,768
8,418
5,423
1,126
916
827
894
885
47.6 %
23.9
15.4
3.2
2.6
2.3
2.5
2.5
12.7 %
3.3
1.2
2.4
1.5
16.6
14.7
8.4
19.1 %
3.7
2.5
3.1
1.8
21.3
27.0
12.7
Total at June 30, 2012 (c)
$
33,826
100.0 %
8.0 %
12.5 %
Total at March 31, 2012
$
35,257
100.0 %
8.1 %
12.0 %
Financing
receivables
December 31, 2011
U.K.
France
Poland
Czech Republic
Netherlands
Hungary
Spain
All other
$
16,898
8,520
5,396
1,095
945
883
920
893
Total at December 31, 2011
$
35,550
Financing
receivables
June 30, 2011
As a % of total
Nonearning
receivables
47.5 %
24.0
15.2
3.1
2.7
2.5
2.6
2.5
100.0
As a % of total
Delinquent more than
30 days
Financing
receivables
September 30, 2011
As a % of total
Nonearning
receivables
Delinquent more than
30 days
12.5 %
3.4
1.2
2.1
1.5
13.5
17.1
11.1
20.0 %
3.6
2.5
3.0
1.7
18.4
27.3
10.0
U.K.
France
Poland
Czech Republic
Netherlands
Hungary
Spain
All other
$
17,607
9,101
5,895
1,228
1,033
1,109
1,003
1,042
46.3 %
23.9
15.5
3.2
2.7
2.9
2.6
2.7
13.0 %
3.2
1.1
2.0
1.3
12.1
17.3
8.5
20.9 %
3.5
2.7
2.7
1.7
16.1
27.8
11.3
8.1 %
12.3 %
Total at September 30, 2011
$
38,018
100.0 %
8.1 %
12.6 %
Nonearning
receivables
Delinquent more than
30 days
U.K.
France
Poland
Czech Republic
Netherlands
Hungary
Spain
All other
$
18,452
9,581
6,189
1,295
1,098
1,160
1,059
1,156
46.1 %
24.0
15.5
3.2
2.7
2.9
2.6
2.9
13.2 %
3.2
1.1
2.0
1.5
10.8
16.8
10.7
21.3 %
3.6
2.2
2.7
1.6
15.0
25.6
11.2
Total at June 30, 2011
$
39,990
100.0 %
8.2 %
12.6 %
(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, 2012, we had in repossession stock 474 houses in the U.K., which had a value of approximately $0.1 billion.
(c) At June 30, 2012, 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. 84% of these loans are in our U.K. and France portfolios, which comprise mainly loans with
interest-only payments, high loan-to-value ratios at inception and introductory below market rates, have a delinquency rate of 15% and have a loan-to-value ratio at origination of 78%. At June 30, 2012, 8% (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 57%, respectively.
21
GE Capital - Commercial allowance for losses on financing receivables
Balance
January 1,
2012
(In millions)
CLL
Americas
Europe
Asia
Other
$
Provision charged
to operations
889
400
157
4
$
57
158
13
-
Gross
write-offs (b)
Other (a)
$
(30)
(15)
(3)
(1)
$
Balance
June 30,
2012
Recoveries (b)
(306)
(95)
(89)
(2)
$
52
36
9
$
-
662
484
87
1
EFS
26
10
-
(24)
-
12
GECAS
17
26
-
(11)
-
32
Other
37
5
(20)
(10)
-
12
Total Commercial
$
Balance
January 1,
2011
(In millions)
CLL
Americas
Europe
Asia
Other
1,530
$
$
269
Provision charged
to operations
1,288
429
222
6
$
219
73
77
-
EFS
22
11
GECAS
20
(2)
Other
58
11
Total Commercial
$
$
2,045
$
389
(69)
$
(72)
30
10
-
$
(1)
1
(366)
(133)
(147)
-
$
(670)
55
34
18
$
7
1,124
433
180
6
35
-
15
1
$
1,290
Balance
June 30,
2011
-
(17)
$
$
Recoveries (b)
(3)
(32)
97
(4)
-
$
$
Gross
write-offs (b)
Other (a)
$
(537)
115
54
$
1,847
(a) Other primarily included transfers to held for sale and the effects of currency exchange.
(b) Net write-offs (write-offs less recoveries) in certain portfolios may exceed the beginning allowance for losses as our revolving credit portfolios turn over more than once per year or, in all portfolios, can reflect losses that are
incurred subsequent to the beginning of the fiscal year due to information becoming available during the current year, which may identify further deterioration on existing financing receivables.
22
GE Capital - Real Estate allowance for losses on financing receivables
Provision
charged to
operations
Balance
January 1,
2012
(In millions)
Gross
write-offs
Other (a) (b)
Balance
June 30,
2012
Recoveries
Real Estate
Debt
Business Properties
$
949
140
$
17
28
$
(8)
(7)
$
(281)
(58)
$
5
2
$
682
105
Total Real Estate
$
1,089
$
45
$
(15)
$
(339)
$
7
$
787
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
(a) Other primarily included the effects of currency exchange.
(b) Includes $7 million of allowance for losses transferred to assets held for sale reflecting our commitment to sell a portion of the Business Property business in Real Estate.
23
GE Capital - Real Estate debt overview
(In millions)
June 30,
2012
Region
March 31,
2012
Financing receivables
December 31,
2011
September 30,
2011
June 30,
2011
U.S.
Europe
Pacific Basin
Americas
$
16,687
3,802
2,117
5,104
$
19,779
3,973
2,441
5,338
$
20,622
4,073
2,686
5,368
$
21,335
4,392
2,953
5,698
$
22,724
4,543
2,992
6,548
Total (a)
$
27,710
$
31,531
$
32,749
$
34,378
$
36,807
June 30,
2012
Property type
March 31,
2012
Financing receivables
December 31,
2011
September 30,
2011
June 30,
2011
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
6,043
5,301
3,828
3,490
3,393
3,112
738
71
1,734
$
6,659
8,020
4,315
3,603
3,091
3,247
850
134
1,612
$
7,152
8,248
4,466
3,752
3,156
3,246
940
139
1,650
$
7,291
8,630
4,820
3,853
3,317
3,458
1,082
142
1,785
$
8,459
9,057
5,181
3,978
3,358
3,725
1,109
144
1,796
Total (a)
$
27,710
$
31,531
$
32,749
$
34,378
$
36,807
June 30,
2012
Vintage profile
Originated in
pre-2009
2009
2010
2011
2012
Total
Contractual
maturities
$
23,295
57
503
1,955
1,900
Due in
2012 and prior (b)
2013
2014
2015
2016 and later
$
27,710
Total
June 30,
2012
$
6,406
4,483
5,076
3,226
8,519
$
27,710
(a) Represents total gross financing receivables for Real Estate only.
(b) Includes $662 million relating to loans with contractual maturities prior to June 30, 2012.
24
GE Capital - Real Estate equity overview (a)
(In millions, unless otherwise noted)
June 30,
2012
Region
Equity
December 31,
2011
March 31,
2012
September 30,
2011
June 30,
2011
U.S.
Europe
Pacific Basin
Americas
$
6,849
7,278
7,196
2,624
$
7,060
7,532
6,842
2,709
$
7,268
7,553
6,955
2,635
$
7,889
8,590
7,193
2,756
$
8,120
9,236
7,197
2,865
Total
$
23,947
$
24,143
$
24,411
$
26,428
$
27,418
June 30,
2012
Property type
Equity
December 31,
2011
March 31,
2012
September 30,
2011
June 30,
2011
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
12,943
3,463
2,823
2,036
1,092
8
579
306
697
$
13,154
3,428
2,929
2,066
953
13
613
315
672
$
13,117
3,644
2,949
2,110
997
13
601
333
647
$
14,163
4,168
3,091
2,222
1,139
15
607
348
675
$
14,770
4,215
3,265
2,322
1,163
16
602
368
697
Total
$
23,947
$
24,143
$
24,411
$
26,428
$
27,418
June 30,
2012
Key metrics
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
20,384
18.0 %
$
Total
966
20,664
December 31,
2011
$
1,212
$
5.8 %
19.0 %
$
734
21,007
September 30,
2011
$
1,238
$
5.7 %
18.9 %
$
692
22,753
June 30,
2011
$
1,351
$
5.8 %
19.5 %
$
745
23,665
1,425
6.0 %
20.2 %
$
606
June 30,
2012
Vintage profile (f)
Originated in
pre-2009
2009
2010
2011
2012
$
1,239
$
6.0 %
End of period vacancies (d)
Foreclosed properties (e)
March 31,
2012
$
22,368
88
156
655
680
$
23,947
(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) Excludes foreclosed properties related to loans acquired at a discount with an expectation to foreclose.
(f) Includes foreclosed properties based on date of foreclosure.
25
GE Capital - Equipment leased to others (ELTO), net of depreciation and amortization overview
(In millions)
June 30, 2012
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
$
Total at June 30, 2012
$
December 31, 2011
Collateral type
GECAS
3,033
8,222
2,796
1,829
1,663
$
17,543
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
$
Total at December 31, 2011
$
June 30, 2011
Collateral type
$
Total at June 30, 2011
$
32,387
-
$
32,387
$
GECAS
3,125
8,769
2,853
1,669
1,492
$
17,908
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
EFS
$
31,146
$
GECAS
3,003
9,324
2,932
1,687
3,270
$
20,216
$
825
$
825
$
EFS
31,146
-
$
32,885
$
-
$
2
4
6
$
857
$
857
$
-
$
3
1
5
9
$
$
877
$
-
$
50,761
Total at March 31, 2012
$
September 30, 2011
Collateral type
GECAS
2,935
8,656
2,822
1,688
1,768
$
17,869
$
CLL
34,271
8,772
2,853
1,670
2,354
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
$
49,920
Total at September 30, 2011
$
$
35,888
9,329
2,932
1,689
4,153
$
53,991
5
2
6
13
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
EFS
31,557
-
$
31,557
$
GECAS
3,083
8,970
2,892
1,674
1,415
$
18,034
$
Consumer
851
$
851
$
$
31,846
$
Total
$
34,492
8,658
2,822
1,688
2,624
$
50,284
2
5
EFS
31,846
-
-
7
Consumer
867
$
867
$
-
Total
$
34,929
8,973
2,892
1,676
2,288
$
50,758
3
2
6
11
Total
Consumer
877
March 31, 2012
Collateral type
35,420
8,224
2,796
1,829
2,492
Total
Consumer
EFS
32,885
-
Total
Consumer
26
GE Capital - Commercial aircraft asset details
June 30,
2012
Collateral type (In millions)
Loans and leases
December 31,
2011
March 31,
2012
September 30,
2011
June 30,
2011
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
25,141
8,989
3,422
4,695
2,074
$
24,336
8,497
3,561
4,802
1,970
$
24,030
8,375
3,599
4,889
2,042
$
24,036
8,659
3,677
5,025
2,171
$
25,170
8,863
3,499
5,092
2,089
Total (a)
$
44,321
$
43,166
$
42,935
$
43,568
$
44,713
June 30,
2012
Airline regions (In millions)
Loans and leases
December 31,
2011
March 31,
2012
September 30,
2011
June 30,
2011
U.S.
Europe
Pacific Basin
Americas
Other
$
13,992
10,789
7,830
5,083
6,627
$
13,917
9,893
7,988
5,043
6,325
$
13,760
9,665
7,945
5,072
6,493
$
14,317
9,724
7,848
5,344
6,335
$
14,311
9,910
8,399
5,635
6,458
Total (a)
$
44,321
$
43,166
$
42,935
$
43,568
$
44,713
June 30,
2012
Aircraft vintage profile (In millions)
0-5 years
6-10 years
11 - 15 years
15+ years
$
17,284
10,348
10,832
3,783
Total (b)
$
42,247
(a) Includes loans and financing leases of $12,046 million, $11,721 million, $11,901 million, $11,841 million, and $11,952 million (less non-aircraft loans and financing leases of of $112 million, $112million, $112 million,
$119 million and $124 million) and ELTO of $32,387 million, $31,557 million, $31,146 million, $31,846 million, and $32,885 million at, June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011,
and June 30, 2011 respectively, related to commercial aircraft at GECAS.
(b) Excludes aircraft engine loans and leases of $2,074 million at June 30, 2012.
27
GE Capital other key areas
28
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
At June 30, 2012
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
$
20,994
3,436
2,440
3,060
5,269
2,592
1,792
3,412
$
4,003
463
195
171
8
140
137
90
$
Estimated
fair value
(327)
(130)
(198)
(180)
(148)
(168)
(30)
-
$
At December 31, 2011
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
24,670
3,769
2,437
3,051
5,129
2,564
1,899
3,502
$
20,748
3,027
2,711
2,913
5,102
2,414
2,488
3,974
$
3,432
350
184
162
32
126
129
84
$
Estimated
fair value
(410)
(143)
(286)
(247)
(164)
(207)
(86)
-
$
23,770
3,234
2,609
2,828
4,970
2,333
2,531
4,058
Retained interests
28
3
-
31
25
10
-
35
Equity
Available-for-sale
Trading
502
260
98
-
(6)
-
594
260
713
241
75
-
(38)
-
750
241
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
$
$
5,308
$
(1,187)
$
47,906
$
At June 30, 2012 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses (b)
losses (b)
fair value
fair value
$
Retained interests
Equity
Total
43,785
$
365
71
26
268
4,136
488
196
-
$
(16)
(1)
(7)
(27)
(31)
(1)
-
$
1,121
233
752
1,057
792
571
171
-
$
44,356
$
4,584
$
(1,581)
$
47,359
At December 31, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses (b)
losses (b)
fair value
fair value
(311)
(129)
(198)
(173)
(121)
(137)
(29)
-
$
1,435
87
219
244
100
330
906
502
$
(241)
(1)
(9)
(23)
(7)
(28)
(5)
-
$
836
307
825
1,320
850
607
203
-
$
(169)
(142)
(277)
(224)
(157)
(179)
(81)
-
2
-
-
-
-
-
-
-
64
(5)
7
(1)
440
(38)
-
-
5,616
$
(88)
$
4,704
$
(1,099)
$
4,263
$
(352)
$
4,948
$
(1,229)
(a) Substantially collateralized by U.S. mortgages. Of our total residential mortgage-backed securities (RMBS) portfolio at June 30, 2012,$1,626 million relates to securities issued by
government sponsored entities and $811 million relates to securities of private label issuers.Securities issued by private label issuers are collateralized primarily by pools of individual
direct mortgage loans of financial institutions.
(b) Includes gross unrealized losses at June 30, 2012 of $(200) million related to securities that had other-than-temporary impairments previously recognized.
29
GE Capital - Investments measured at fair value in earnings (a)
Asset balances at
June 30,
2012
Investment type (In millions)
Equities - trading
$
Net earnings impact for
six months ending
June 30,2012
December 31,
2011
260
$
241
$
33
Assets held for sale (LOCOM)
4,556
4,525
(26)
Assets of businesses held for sale (LOCOM) (b)
3,039
711
(5)
409
388
4
Other (Investment companies and loans)
Total
$
8,264
$
5,865
$
6
(a) Excludes derivatives portfolio.
(b) Includes $2.4 billion of financing receivables transferred to assets held for sale reflecting our commitment to sell a portion of the Business Property business in Real Estate
30
GE Capital - Ending Net Investment (ENI)
June 30,
2012
(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,
2012
558.8
$
573.4
$
584.5
September 30,
2011
$
603.1
June 30,
2011
$
605.6
(1.5)
(1.3)
(1.7)
(2.1)
(7.0)
(58.4)
(60.1)
(61.4)
(65.3)
(62.9)
498.9
$
(66.3)
$
December 31,
2011
432.6
512.0
$
(76.2)
$
435.8
521.4
$
(76.7)
$
444.7
535.7
$
(83.3)
$
452.4
535.7
(78.0)
$
457.7
31
GE Capital - Net interest margin (a)
For six
months ending
June 30,
2012
(In billions)
For three
months ending
June 30,
2011
March 31,
2012
Interest income from Loans and Leases
6.0 %
6.0 %
6.0 %
Yield Adjustors (Fees, Tax equivalency adjustment) (b)
0.8 %
0.7 %
0.8 %
Investment Income (c)
0.2 %
0.1 %
0.2 %
Operating Lease Income (net of depreciation)
1.4 %
1.3 %
1.4 %
Total Interest Income
8.4 %
8.2 %
8.4 %
Total Interest Expense (d)
3.5 %
3.8 %
3.6 %
Net Interest Margin (e)
4.9 %
4.4 %
4.8 %
Average Gross Financing Receivables
$
Average Investment Securities (f)
287
$
17
Average ELTO (net of depreciation)
312
$
17
50
291
17
53
50
Average Earning Assets (AEA) (g)
$
354
$
382
$
358
Average Total Assets (f)
$
535
$
560
$
542
AEA / Average Total Assets
66 %
68 %
66 %
(a) YTD net interest margin % annualized (annualized net interest margin $ = 1Q * 4, 2Q YTD * 2, 3Q YTD * 4/3, 4Q YTD * 1); average asset balances
calculated using average of quarter end balances (1Q = 2-point average, 2Q = 3-point average, 3Q = 4-point average, 4Q = 5-point average).
%s calculated based on average earning assets (AEA) total.
(b) Excludes non-yield fees
(c) Excludes legacy insurance business, income on cash, realized gains and losses on sale of investment securities
(d) Includes total GECC interest expense
(e) Excludes items in footnotes (b) and (c) and income from associated companies, Real Estate investment income, sale of goods, intercompany income
with GE and other income
(f) Excludes legacy insurance business
(g) Excludes Real Estate Owned, investments in associated companies, cash, goodwill and other assets
32
GE Capital - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
June 30,
2012
$
418.2
79.8
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
March 31,
2012
$
5.2:1
$
418.2
(7.7)
(66.5)
344.0
December 31,
2011
432.1
79.2
$
5.5:1
$
432.1
(7.7)
(76.4)
348.0
443.4
77.1
September 30,
2011
$
458.4
76.0
5.7:1
$
443.4
(7.7)
(77.0)
358.7
June 30,
2011
$
463.2
75.1
6.0:1
$
458.4
(7.7)
(83.6)
367.1
6.2:1
$
463.2
(7.7)
(78.1)
377.4
Equity (b)
Add: hybrid debt
Adjusted equity
79.8
7.7
87.6
79.2
7.7
86.9
77.1
7.7
84.8
76.0
7.7
83.7
75.1
7.7
82.8
Adjusted leverage ratio
3.9:1
4.0:1
4.2:1
4.4:1
4.6:1
Tangible common equity to tangible assets ratio
(In billions)
June 30,
2012
March 31,
2012
December 31,
2011
September 30,
2011
June 30,
2011
Total equity (b)
Less: Preferred equity
Less: Goodwill and other intangibles
$
79.8
(2.3)
(28.5)
$
79.2
(28.8)
$
77.1
(28.8)
$
76.0
(29.4)
$
75.1
(30.0)
Tangible common equity
$
49.1
$
50.4
$
48.3
$
46.6
$
45.1
Total assets
Less: Goodwill and other intangibles
$
558.8
(28.5)
$
573.4
(28.8)
$
584.5
(28.8)
$
603.1
(29.4)
$
605.6
(30.0)
Tangible assets
$
530.3
$
544.6
$
555.7
$
573.7
$
575.6
Tangible common equity to tangible assets
Tier 1 common ratio (c)
9.3 %
9.3 %
8.7 %
8.1 %
7.8 %
10.1 %
10.4 %
9.9 %
9.6 %
9.1 %
(a) Includes discontinued operations.
(b) Excluding noncontrolling interests.
(c) Based on Basel One RWA estimates.
33
GE Capital - Funding
June 30,
2012
(In billions)
March 31,
2012
December 31,
2011
September 30,
2011
June 30,
2011
Commercial paper
Long-term debt (a)
Deposits / CD's
Alternate funding / other
Non-recourse borrowings of consolidated securitization entities
$
43.1
278.5
41.9
23.8
30.7
$
43.1
294.2
41.1
24.0
29.5
$
44.2
302.8
43.1
23.7
29.3
$
40.7
321.6
41.5
24.0
29.0
$
40.7
326.5
41.5
25.4
29.1
Total debt
$
418.0
$
431.9
$
443.1
$
456.8
$
463.2
$
48.8
$
51.6
$
52.4
$
53.6
$
53.7
Metrics
Bank lines
Commercial paper coverage (b):
Bank lines
Bank lines and cash and equivalents
113 %
267 %
120 %
297 %
119 %
292 %
132 %
336 %
132 %
323 %
Cash and equivalents
$
66.3
$
76.2
$
76.7
$
83.3
$
78.0
LT debt < 1 year
$
67.1
$
79.3
$
82.7
$
76.4
$
72.9
(a) Includes $17 billion, $28 billion, $35 billion, $45 billion, and $45 billion of long term debt issued under the TLGP program at June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011,
and June 30, 2011, 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.
34
Appendix
35
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.
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,
Statement of Financial Position and Statement of Cash Flows, respectively, 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 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.
36
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 interest margin
A measure of the yield on interest earning assets relative to total interest expense. It is the amount of interest income less interest
expense, divided by average interest earning assets.
Net operating income
Represents operating income less operating expenses for owned real estate properties.
Other comprehensive income
Changes in assets and liabilities that do not result from transactions with shareowners and are not included in net income but are
recognized in a separate component of shareowners' equity. Other comprehensive income includes the following components:
- Investment securities - unrealized gains and losses on securities classified as available for sale
- Currency translation adjustments - the result of translating into U.S. dollars those amounts denominated or measured in a different
currency
- Cash flow hedges - the effective portion of the fair value of cash flow hedges. Such hedges relate to an exposure to variability in the cash
flows of recognized assets, liabilities or forecasted transactions that are attributable to a specific risk
- Benefit plans - unamortized prior service costs and net actuarial losses (gains) related to pension and retiree health and life benefits
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)
An entity that must be consolidated by its primary beneficiary, the party that holds a controlling financial interest. 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) the power to direct the activities that most significantly affect the economic performance of the entity, (b) obligation to
obasorb expected losses, or (c) right to receive expected residual returns.
37
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