Download 3Q'10 GECS Supplement

GE Capital
Third quarter 2010 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.
Third quarter 2010 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
11-16
d)
Consumer allowance for losses on financing receivables
e) Consumer financing receivables by region
17
18
f) Consumer mortgage portfolio by country
19
g) Commercial allowance for losses on financing receivables
20
h) Commercial real estate debt and equity overview
21-22
i) Equipment leased to others overview
23
j) Commercial aircraft asset details
24
4. GE Capital other key areas
a) Investment securities
26
b) Investments measured at fair value in earnings
27
c) Ending net investment
28
d) GECC ratios
29
5. GECS supplemental information
a) Assets by region
31
b) Investment securities
32
c) Funding
33
d) Ratios
34
6. Appendix
a) Glossary
36-37
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
September 30,
2010
$
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
Depreciation and amortization
Total costs and expenses
Earnings (loss) from continuing operations before income taxes
Benefit for income taxes
Earnings from continuing operations (a)
Earnings (loss) from discontinued operations, net of taxes
Net earnings
Less: net earnings (loss) attributable to noncontrolling interests
Net earnings attributable to GECC
$
11,576
40
11,616
June 30,
2010
$
12,129
168
12,297
Changes in GECC shareowner's equity
Balance at beginning of period
Accounting changes (b)
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Balance at end of period
$
$
12,456
279
12,735
$
11,792
213
12,005
3,929
3,677
265
35
2,263
1,924
12,093
4,228
3,948
239
45
2,907
2,128
13,495
4,135
3,673
181
47
2,868
2,068
12,972
527
367
741
76
238
372
(760)
856
(967)
1,116
894
(1,104)
817
(187)
610
(387)
96
(11)
149
84
(210)
23
630
(13)
223
3
85
(40)
233
8
(233)
$
643
69,823
-
June 30,
2010
$
163
1,036
(278)
(14)
907
(238)
669
Increases from net earnings attributable to the Company
Comprehensive income
12,050
281
12,331
3,863
3,636
154
38
2,009
1,856
11,556
September 30,
2010
$
$
September 30,
2009
3,782
3,509
39
36
1,696
2,027
11,089
GECC - statement of changes in shareowner's equity
(In millions)
For three months ending
March 31,
December 31,
2010
2009
70,492
71,650
(6)
$
69,823
$
125
For three months ending
March 31,
December 31,
2010
2009
$
41
(2,618)
63
23
(2,491)
670
(1,821)
$
220
73,718
(1,565)
(4)
$
143
(1,312)
413
42
(714)
215
(499)
$
71,650
73,193
(12)
$
September 30,
2009
$
401
(38)
138
(60)
441
96
537
$
73,718
225
71,720
(24)
420
896
(17)
2
1,301
171
1,472
$
73,168
(a) Effective January 1, 2010, GE Captial segment earnings are equal to the earnings from continuing operations for GECC.
(b) March 31, 2010 reflects the impact of adoption of FAS 167 (ASU 2009-17).
3
GECC - condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 26)
Inventories
Financing receivables - net
Other receivables
Property, plant & equipment, less accumulated amortization of $26,062, $25,612,
$26,387, $26,307 and $26,471
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
September 30,
2010
$
65,359
18,506
62
331,343
12,787
June 30,
2010
$
March 31,
2010
61,188
15,800
71
333,262
12,560
$
53,669
27,143
2,347
81,317
599
1,203
53,670
27,828
2,268
82,206
786
1,283
December 31,
2009
59,614
16,237
77
356,185
13,917
$
55,905
28,499
2,786
83,043
949
1,034
63,696
27,509
71
336,926
17,876
September 30,
2009
$
56,695
28,961
3,018
86,355
125
1,470
56,254
27,613
79
348,518
17,698
58,690
28,184
3,371
87,040
1,263
1,533
$
596,098
$
589,159
$
618,246
$
622,702
$
630,243
$
110,717
8,227
30,497
41,928
298,210
6,663
20,711
5,067
446
2,014
$
116,015
8,043
33,411
37,471
289,699
7,430
19,658
5,279
261
971
$
119,568
8,019
36,780
38,310
307,032
8,389
19,601
5,908
30
801
$
128,329
11,162
3,883
38,923
326,321
8,687
22,736
5,831
55
853
$
128,577
10,378
4,402
36,836
335,275
9,640
20,458
8,394
143
843
Total liabilites
524,480
518,238
544,438
546,780
554,946
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
(539)
(1,714)
(1,618)
(383)
28,421
46,269
(702)
(2,750)
(1,340)
(369)
28,421
46,507
(743)
(132)
(1,403)
(392)
28,427
45,837
(676)
1,228
(1,816)
(434)
28,431
46,929
(1,077)
1,266
(1,954)
(374)
28,418
46,833
Total GECC shareowner's equity
70,492
69,823
71,650
73,718
73,168
1,126
1,098
2,158
2,204
2,129
71,618
70,921
73,808
75,922
75,297
Noncontrolling interests
Total equity
Total liabilities and equity
$
596,098
$
589,159
$
618,246
$
622,702
$
630,243
4
GECS - condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
September 30,
2010
$
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 17 and 20)
Depreciation and amortization
Total costs and expenses
Earnings (loss) from continuing operations before income taxes
Benefit for income taxes
Earnings from continuing operations
Earnings (loss) from discontinued operations, net of taxes
Net earnings
Less: net earnings (loss) attributable to noncontrolling interests
Net earnings attributable to GECS
$
12,429
40
12,469
For three months ending
March 31,
December 31,
2010
2009
June 30,
2010
$
12,980
168
13,148
Changes in GECS shareowner's equity
Balance at beginning of period
Accounting changes (a)
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Balance at end of period
$
13,224
279
13,503
$
12,533
213
12,746
3,938
3,808
265
787
2,263
1,925
12,986
4,225
3,991
239
812
2,907
2,128
14,302
4,128
3,712
181
785
2,868
2,069
13,743
468
387
708
101
185
357
(799)
870
(997)
1,138
855
(1,104)
809
(188)
542
(387)
71
(18)
141
40
(249)
23
621
(13)
155
3
53
(40)
181
8
(272)
$
634
67,267
-
June 30,
2010
$
(906)
1,044
(261)
(14)
(137)
(277)
(414)
Increases from net earnings attributable to the Company
Comprehensive income
$
3,870
3,781
154
770
2,009
1,856
12,440
September 30,
2010
$
12,890
281
13,171
3,790
3,652
39
796
1,696
2,028
12,001
GECS - statement of changes in shareowner's equity
(In millions)
$
September 30,
2009
66,853
68,517
(5)
$
67,267
$
93
$
For three months ending
March 31,
December 31,
2010
2009
$
632
(2,649)
88
23
(1,906)
661
(1,245)
$
152
70,833
(1,910)
(3)
$
310
(1,311)
413
42
(546)
143
(403)
$
68,517
70,720
(50)
September 30,
2009
$
42
(37)
125
(60)
70
93
163
$
70,833
173
67,904
(24)
1,698
915
(10)
2
2,605
173
2,778
$
70,658
(a) March 31, 2010 reflects the impact of adoption of FAS 167 (ASU 2009-17).
5
GECS - condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 32)
Inventories
Financing receivables - net (see pages 11 - 16)
Other receivables
Property, plant & equipment, less accumulated amortization of $26,078, $25,627,
$26,402, $26,322 and $26,485(see page 23)
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 33)
Accounts payable
Non-recourse borrowings of consolidated securitization entities
Bank deposits
Long-term borrowings (see page 33)
Investment contracts, insurance liabilities and insurance annuity benefits
Other liabilities
Deferred income taxes
Liabilities of businesses held for sale
Liabilities of discontinued operations
September 30,
2010
$
66,016
45,674
62
331,343
13,324
June 30,
2010
$
March 31,
2010
61,547
42,083
71
333,262
13,093
$
53,690
27,143
2,793
82,432
599
1,203
53,690
27,828
2,277
82,440
786
1,283
December 31,
2009
60,039
41,523
77
356,185
14,527
$
55,926
28,499
3,238
84,145
949
1,035
64,356
51,913
71
336,926
18,752
September 30,
2009
$
56,717
28,961
3,479
87,471
125
1,470
56,898
52,723
79
348,518
18,625
58,712
28,184
3,838
87,941
1,263
1,533
$
624,723
$
617,916
$
646,143
$
650,241
$
658,314
$
115,750
8,335
30,497
41,928
298,277
31,688
21,646
5,919
446
2,258
$
121,011
8,184
33,411
37,471
289,768
31,015
20,565
6,651
261
1,214
$
124,457
8,261
36,780
38,310
307,102
31,990
20,566
6,900
30
1,072
$
131,137
13,275
3,883
38,923
326,391
32,009
23,756
6,793
55
1,138
$
131,768
12,501
4,402
36,836
335,347
32,948
21,021
9,434
143
1,279
Total liabilites
556,744
549,551
575,468
577,360
585,679
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
(617)
(1,592)
(1,529)
(383)
27,573
43,390
289
(2,636)
(1,268)
(369)
27,573
43,667
(343)
13
(1,356)
(392)
27,578
43,006
(436)
1,372
(1,769)
(434)
27,581
44,508
(478)
1,409
(1,894)
(374)
27,568
44,416
Total GECS shareowner's equity
66,853
67,267
68,517
70,833
70,658
1,126
1,098
2,158
2,048
1,977
67,979
68,365
70,675
72,881
72,635
Noncontrolling interests
Total equity
Total liabilities and equity
$
624,723
$
617,916
$
646,143
$
650,241
$
658,314
6
GECC continuing operations (GE Capital)
September 30,
2010
(In millions)
Revenues
Less: Interest expense
Net revenues
$
11,616
(3,782)
7,834
June 30,
2010
$
12,297
(3,863)
8,434
For three months ending
March 31,
December 31,
2010
2009
$
12,331
(3,929)
8,402
$
12,735
(4,228)
8,507
September 30,
2009
$
12,005
(4,135)
7,870
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
2,736
2,027
848
5,611
2,808
1,856
1,020
5,684
2,826
1,924
1,151
5,901
3,108
2,128
1,124
6,360
2,875
2,068
1,026
5,969
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
2,223
(1,696)
2,750
(2,009)
2,501
(2,263)
2,147
(2,907)
1,901
(2,868)
527
367
741
76
238
372
(760)
856
(967)
1,116
Earnings (loss) before income taxes
Benefit for income taxes
Earnings from continuing operations before noncontrolling interests
Less: Net earnings (loss) attributable to noncontrolling interests
$
894
23
$
817
(13)
$
610
3
$
96
(40)
$
149
8
GE Capital segment profit
$
871
$
830
$
607
$
136
$
141
September 30,
2010
(In millions)
Segment profit
CLL
Consumer
Real Estate
EFS
GECAS
$
$
GECC corporate items and eliminations
GE Capital segment profit
$
June 30,
2010
443
826
(405)
55
158
1,077
(206)
$
871
$
$
For three months ending
March 31,
December 31,
2010
2009
312
735
(524)
126
288
937
(107)
$
830
$
$
232
593
(403)
153
317
892
(285)
$
607
$
$
September 30,
2009
352
262
(593)
31
283
335
(199)
$
136
$
$
130
443
(538)
41
187
263
(122)
141
7
GE Capital asset quality
8
GE Capital - assets by region (a), (b)
At
(In millions)
September 30,
2010
Property, plant and
equipment (net)
Financing
receivables (net)
155,659
$
U.S.
Europe
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other
$
Total
$
331,343
$
53,670
$
594,815
Total at June 30, 2010
$
333,262
$
53,669
$
587,956
Total at March 31, 2010
$
356,185
$
55,905
$
617,212
Total at December 31, 2009
$
336,926
$
56,695
$
621,232
Total at September 30, 2009
$
348,518
$
58,690
$
628,710
80,697
18,697
31,293
30,920
14,077
10,644
Total assets
$
5,723
308
2,776
1,444
32,775
300,602
$
110,645
31,000
54,490
44,648
53,430
June 30,
2010
March 31,
2010
December 31,
2009
September 30,
2009
Total assets
Total assets
Total assets
Total assets
303,482
$
106,001
27,515
52,749
44,774
53,435
$
587,956
312,015
$
617,212
$
130,822
31,499
60,233
42,313
54,239
118,722
30,616
57,670
44,143
54,046
$
302,126
$
621,232
300,639
136,093
32,044
62,986
42,899
54,049
$
628,710
(a) Excludes assets of discontinued operations.
(b) Prior period amounts have been reclassified to conform to current-period's presentation.
9
GE Capital - assets in selected emerging markets
(In millions)
Selected emerging markets (a) (b)
Eastern Europe
Poland
Czech Republic
Hungary
Turkey
Total Eastern Europe
Financing
receivables (net)
$
9,192
5,359
3,188
17,739
September 30,
2010
Property, plant and
equipment (net)
$
164
57
48
269
Total assets
$
13,058
7,304
4,115
3,077
27,554
$
At
June 30,
2010
March 31,
2010
December 31,
2009
September 30,
2009
Total assets
Total assets
Total assets
Total assets
11,995
6,607
4,026
2,794
25,422
$
13,274
7,636
4,625
2,801
28,336
$
13,421
8,221
4,816
2,684
29,142
$
13,622
8,165
5,165
2,590
29,542
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
1,142
69
1,211
16
16
1,771
1,554
3,325
1,758
1,456
3,214
2,225
1,455
3,680
1,765
1,386
3,151
2,032
2,524
4,556
Americas
Mexico
Central America (ex-Mexico)
Total Americas
7,516
4,992
12,508
727
253
980
10,034
9,437
19,471
10,075
9,457
19,532
10,000
9,361
19,361
10,155
9,371
19,526
9,930
9,035
18,965
Total
$
31,458
$
1,265
$
50,350
Total at June 30, 2010
$
30,324
$
1,128
$
48,168
Total at March 31, 2010
$
32,955
$
1,199
$
51,377
Total at December 31, 2009
$
34,750
$
1,230
$
51,819
Total at September 30, 2009
$
35,681
$
1,135
$
53,063
$
48,168
$
51,377
$
51,819
$
53,063
(a) We have disclosed here selected emerging markets where our total assets at September 30, 2010, exceed $1 billion. Assets of discontinued operations are excluded.
(b) Prior period amounts have been reclassified to conform to current-period's presentation.
10
GE Capital - CLL portfolio overview
(In millions, unless otherwise noted)
Balances (a)
September 30,
2010
CLL
Americas
Europe
Asia
Other
Total (c)
$
$
89,769
36,969
12,192
2,651
141,581
$
$
$
2,777
1,095
429
7
4,308
$
$
1,356
411
252
8
2,027
$
$
$
189
47
18
254
$
$
$
1,362
382
234
8
1,986
$
$
$
99,666
43,403
13,159
2,836
159,064
$
$
3,210
1,126
467
26
4,829
$
$
3,437
1,441
559
24
5,461
$
$
1,319
484
236
12
2,051
$
$
1,245
575
234
11
2,065
256
128
39
423
$
$
247
132
46
425
87,496
41,455
13,202
2,836
144,989
September 30,
2009
$
$
$
3,155
1,441
576
24
5,196
September 30,
2009
$
$
1,179
575
244
11
2,009
September 30,
2009
$
$
344
102
62
(1)
507
1,098
533
242
6
1,879
$
December 31,
2009
$
3,471
1,296
595
31
5,393
$
December 31,
2009
$
92,263
42,499
14,096
2,896
151,754
$
December 31,
2009
Write-offs (net) - for three months ending
March 31,
2010
June 30,
2010
$
$
Allowance for losses (e)
March 31,
January 1,
2010
2010 (b)
June 30,
2010
$
96,553
39,980
12,664
2,791
151,988
December 31,
2009
Nonearning receivables (d)
March 31,
January 1,
2010
2010 (b)
3,076
902
422
24
4,424
$
September 30,
2010 (f)
CLL
Americas
Europe
Asia
Other
Total
$
June 30,
2010
September 30,
2010
CLL
Americas
Europe
Asia
Other
Total
93,042
36,067
11,914
2,727
143,750
$
September 30,
2010
CLL
Americas
Europe
Asia
Other
Total
Financing receivables
March 31,
January 1,
2010
2010 (b)
June 30,
2010
September 30,
2009
$
$
266
89
39
3
397
(a) During the first quarter of 2010, we transferred the Transportation Financial Services business from GECAS to CLL and the Consumer business in Italy from Consumer to CLL. Prior-period amounts were reclassified to conform to current-period's presentation.
(b) Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
(c) Financing receivables include impaired loans of $5,340 million at September 30, 2010.
(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 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.
(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.
(f) Includes $17 million of net write-offs, for three months ending September 30, 2010, related to VIEs consolidated with the adoption of ASU 2009-17, amendment to ASC 810, Consolidation.
11
GE Capital - CLL portfolio overview
Nonearning receivables as as percent of financing receivables (b)
June 30,
March 31,
January 1,
2010
2010
2010 (c)
Ratios (a)
September 30,
2010
CLL
Americas
Europe
Asia
Other
Total
3.1 %
3.0
3.5
0.3
3.0 %
September 30,
2010
CLL
Americas
Europe
Asia
Other
Total
June 30,
2010
48.8 %
37.5
58.7
114.3
47.1 %
CLL
Americas
Europe
Asia
Other
Total
3.4 %
3.3
4.2
0.8
3.4 %
Allowance for losses as a percent of nonearning receivables (d)
March 31,
January 1,
2010
2010 (c)
44.3 %
42.4
55.5
33.3
44.9 %
1.5 %
1.1
2.1
0.3
1.4 %
September 30,
2010
CLL
Americas
Europe
Asia
Other
Total
3.3 %
2.8
3.7
0.9
3.2 %
41.1 %
43.0
50.5
46.2
42.5 %
3.6 %
3.5
4.4
0.8
3.6 %
December 31,
2009
36.2 %
39.9
41.9
45.8
37.8 %
37.4 %
39.9
42.4
50.0
38.7 %
Allowance for losses as a percent of total financing receivables (d)
June 30,
March 31,
January 1,
December 31,
2010
2010
2010 (c)
2009
September 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
Managed delinquency
3.3 %
2.5
3.5
0.9
3.1 %
December 31,
2009
1.2 %
1.3
1.8
0.4
1.3 %
Write-offs as a percent of financing receivables (e)
March 31,
2010
1.1 %
1.3
1.3
NM
1.1 %
1.3 %
1.4
1.8
0.4
1.4 %
December 31,
2009
1.0 %
1.3
1.4
NM
1.1 %
Equipment financing
March 31,
2010
June 30,
2010
2.26 %
1.4 %
1.2
1.9
0.4
1.3 %
2.50 %
1.5 %
1.0
1.8
NM
1.4 %
December 31,
2009
2.71 %
2.81 %
September 30,
2009
3.8
3.0
4.2
1.1
3.6
September 30,
2009
31.6
41.1
40.7
19.4
34.8
September 30,
2009
1.2
1.3
1.7
0.2
1.2
September 30,
2009
1.1
0.8
1.1
0.4
1.0
September 30,
2009
3.01
(a) During the first quarter of 2010, we transferred the Transportation Financial Services business from GECAS to CLL and the Consumer business in Italy from Consumer to CLL. Prior-period amounts were reclassified to conform to current-period's 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 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.
(c) Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
(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) 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 - Consumer portfolio overview
(In millions, unless otherwise noted)
Financing receivables
March 31,
January 1,
2010
2010 (b)
Balances (a)
September 30,
2010
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 (c)
$
$
49,239
22,729
42,782
10,038
10,035
134,823
June 30,
2010
$
$
September 30,
2010
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
$
$
4,248
352
1,149
45
497
6,291
$
$
922
1,043
2,672
208
255
5,100
$
$
$
77
268
880
42
61
1,328
$
$
$
$
58,345
24,976
47,171
13,344
11,688
155,524
$
$
$
$
4,515
451
1,633
72
625
7,296
$
$
913
1,139
3,125
294
308
5,779
$
$
949
1,181
3,300
308
300
6,038
58
310
1,035
55
83
1,541
$
$
78
389
1,114
47
91
1,719
58,345
24,976
23,190
13,344
11,688
131,543
September 30,
2009
$
$
$
4,515
451
841
72
625
6,504
September 30,
2009
$
$
949
1,181
1,698
308
300
4,436
September 30,
2009
$
$
128
416
602
31
89
1,266
973
1,108
1,568
296
258
4,203
$
December 31,
2009
$
4,736
447
749
74
457
6,463
$
December 31,
2009
$
60,812
24,963
22,324
14,196
11,975
134,270
$
December 31,
2009
Write-offs (net) - for three months ending
March 31,
2010
June 30,
2010
$
$
Allowance for losses (e)
March 31,
January 1,
2010
2010 (b)
892
1,020
2,754
234
257
5,157
$
4,341
427
1,453
64
518
6,803
$
June 30,
2010
$
52,722
24,256
43,330
12,025
10,898
143,231
Nonearning receivables (d)
March 31,
January 1,
2010
2010 (b)
4,187
408
1,228
54
473
6,350
$
September 30,
2010 (f)
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
$
June 30,
2010
September 30,
2010
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
48,013
21,783
42,946
10,012
9,764
132,518
December 31,
2009
September 30,
2009
$
$
122
452
645
91
98
1,408
(a) During the first quarter of 2010, we transferred the Consumer business in Italy from Consumer to CLL. Prior-period amounts were reclassified to conform to current-period's presentation.
(b) Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
(c) Financing receivables include impaired loans of $2,418 million at September 30, 2010.
(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 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.
(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.
(f) Includes $477 million of net write-offs, for three months ending September 30, 2010, related to VIE assets consolidated with the adoption of ASU 2009-17, amendment to ASC 810, Consolidation,
and sellers interest included in the VIE that was on-book prior to January 1, 2010.
13
GE Capital - Consumer portfolio overview
Ratios (a)
Nonearning receivables as as percent of financing receivables (b)
June 30,
March 31,
January 1,
December 31,
2010
2010
2010 (c)
2009
September 30,
2010
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
8.6 %
1.5
2.7
0.4
5.0
4.7 %
21.7 %
296.3
232.6
462.2
51.3
81.1 %
September 30,
2010
21.0 %
266.7
215.1
459.4
59.5
84.9 %
1.9 %
4.7
6.4
2.3
2.6
3.9 %
June 30,
2010
0.6 %
4.8
8.2
1.7
2.5
4.0 %
September 30,
2010
Managed delinquency
21.3 %
250.0
224.3
433.3
54.3
81.2 %
1.9 %
4.6
6.2
2.1
2.5
3.8 %
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
7.7 %
1.8
3.5
0.5
5.3
4.7 %
7.7 %
1.8
3.6
0.5
5.3
4.9 %
21.0 %
261.9
202.1
427.8
48.0
82.8 %
8.34 %
1.7 %
4.7
7.2
2.4
2.8
4.0 %
1.6 %
4.7
7.0
2.3
2.6
3.9 %
Write-offs as a percent of financing receivables (e)
March 31,
2010
0.5 %
5.4
9.6
2.0
3.2
4.5 %
8.66 %
September 30,
2009
20.5 %
247.9
209.3
400.0
56.5
65.0 %
September 30,
2009
1.6 %
4.7
7.3
2.3
2.6
3.4 %
December 31,
2009
0.6 %
6.3
13.4
1.5
3.2
5.0 %
Consumer
March 31,
2010
June 30,
2010
7.8 %
1.8
3.4
0.5
3.8
4.8 %
21.0 %
261.9
201.9
427.8
48.0
68.2 %
Allowance for losses as a percent of total financing receivables (d)
June 30,
March 31,
January 1,
December 31,
2010
2010
2010 (c)
2009
September 30,
2010
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
8.2 %
1.8
3.4
0.5
4.8
4.7 %
Allowance for losses as a percent of nonearning receivables (d)
June 30,
March 31,
January 1,
December 31,
2010
2010
2010 (c)
2009
September 30,
2010
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
8.7 %
1.9
2.9
0.5
4.8
4.8 %
September 30,
2009
1.6 %
4.4
7.0
2.1
2.2
3.1 %
September 30,
2009
0.9 %
6.7
10.6
0.9
3.0
3.8 %
December 31,
2009
8.72 %
0.8 %
7.2
11.2
2.5
3.3
4.1 %
September 30,
2009
8.85 %
8.82 %
(a) During the first quarter of 2010, we transferred the Consumer business in Italy from Consumer to CLL. Prior-period amounts were reclassified to conform to current-period's 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 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.
(c) Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
(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) 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
September 30,
2010
Real Estate (c)
EFS
GECAS (f)
Other
$
42,481
7,291
12,227
2,087
$
September 30,
2010
Real Estate
EFS
GECAS (f)
Other
$
1,425
163
90
$
1,857
85
25
53
$
$
222
7
-
$
1,618
77
77
105
$
47,586
7,854
12,615
2,445
$
48,673
7,790
13,254
2,614
December 31,
2009
$
Nonearning receivables (d)
March 31,
January 1,
2010
2010 (b)
$
1,748
80
77
100
$
1,358
78
153
72
1,797
53
50
50
$
1,557
47
54
46
$
1,536
28
104
34
185
18
-
$
188
71
2
44,841
7,790
13,254
2,614
$
$
1,252
78
153
72
$
1,320
360
194
78
September 30,
2009
1,494
28
104
34
$
December 31,
2009
$
45,471
8,362
12,926
3,095
September 30,
2009
December 31,
2009
Write-offs (net) - for three months ending
March 31,
2010
June 30,
2010
$
$
September 30,
2009
December 31,
2009
Allowance for losses (e)
March 31,
January 1,
2010
2010 (b)
June 30,
2010
September 30,
2010
Real Estate (c)
EFS
GECAS (f)
Other
44,006
7,472
12,337
2,272
June 30,
2010
September 30,
2010
Real Estate
EFS
GECAS (f)
Other
Financing receivables (a)
March 31,
January 1,
2010
2010 (b)
June 30,
2010
1,028
101
126
23
September 30,
2009
73
67
15
2
$
104
1
7
(a) Financing receivables include $9,089 million, $180 million, $25 million and $117 million of impaired loans at Real Estate, EFS, GECAS, and Other, respectively, at September 30, 2010.
(b) Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
(c) Financing receivables include $224 million of construction loans at September 30, 2010.
(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 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.
(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.
(f) During the first quarter of 2010, we transferred the Transportation Financial Services business from GECAS to CLL. Prior-period amounts were reclassified to conform to current-period's presentation.
15
GE Capital - portfolio overview
Ratios
Nonearning receivables as as percent of financing receivables (a)
June 30,
March 31,
January 1,
December 31,
2010
2010
2010 (b)
2009
September 30,
2010
Real Estate
EFS
GECAS (e)
Other
3.4 %
2.2
4.3
September 30,
2010
Real Estate
EFS
GECAS (e)
Other
June 30,
2010
130.3 %
52.1
58.9
Real Estate
EFS
GECAS (e)
Other
2.8 %
1.0
1.2
2.8
Allowance for losses as a percent of nonearning receivables (c)
March 31,
January 1,
2010
2010 (b)
111.1 %
68.8
64.9
47.6
4.4 %
1.2
0.2
2.5
September 30,
2010
Real Estate
EFS
GECAS (e)
Other
3.7 %
1.0
0.6
4.1
89.1 %
58.8
70.1
46.0
113.1 %
35.9
68.0
47.2
2.8 %
1.0
1.2
2.8
December 31,
2009
119.3 %
35.9
68.0
47.2
Allowance for losses as a percent of total financing receivables (c)
June 30,
March 31,
January 1,
December 31,
2010
2010
2010 (b)
2009
September 30,
2010
4.1 %
0.7
0.4
2.2
June 30,
2010
2.1 %
NM
0.2
NM
September 30,
2010
Managed delinquency
3.7 %
1.0
0.6
4.6
5.74 %
3.3 %
0.6
0.4
1.9
3.2 %
0.4
0.8
1.3
Write-offs as a percent of financing receivables (d)
March 31,
2010
1.6 %
NM
0.6
NM
5.40 %
December 31,
2009
1.6 %
NM
2.2
0.3
Real Estate
March 31,
2010
June 30,
2010
3.3 %
0.4
0.8
1.3
0.6 %
3.3
0.5
0.3
December 31,
2009
4.97 %
4.22 %
September 30,
2009
2.9 %
4.3
1.5
2.5
September 30,
2009
77.9 %
28.1
64.9
29.5
September 30,
2009
2.3 %
1.2
1.0
0.7
September 30,
2009
0.9 %
NM
NM
0.9
September 30,
2009
4.09 %
(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) Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
(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.
(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.
(e) During the first quarter of 2010, we transferred the Transportation Financial Services business from GECAS to CLL. Prior-period amounts were reclassified to conform to current-period's presentation.
16
GE Capital - Consumer allowance for losses on financing receivables
(In millions)
Consumer (d)
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
Balance
December 31,
2009
Adoption of ASU
2009-17 (a)
Provision
charged to
operations (b)
Balance
January 1,
2010
Other (c)
Gross writeoffs
Recoveries
Balance
September 30,
2010
$
949
1,181
1,698
308
300
$
1,602
-
$
949
1,181
3,300
308
300
$
243
874
2,405
78
213
$
(57)
(44)
(4)
(34)
(24)
$
(281)
(1,401)
(3,401)
(286)
(298)
$
68
433
372
142
64
$
922
1,043
2,672
208
255
$
4,436
$
1,602
$
6,038
$
3,813
$
(163)
$
(5,667)
$
1,079
$
5,100
(In millions)
Consumer (d)
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
Provision
charged to
operations
Balance
January 1,
2009
Other (e)
Gross writeoffs
Recoveries
Balance
September 30,
2009
$
381
1,049
1,700
203
226
$
804
1,335
2,631
346
257
$
82
40
(761)
45
9
$
(423)
(1,691)
(2,134)
(435)
(273)
$
129
375
132
137
39
$
973
1,108
1,568
296
258
$
3,559
$
5,373
$
(585)
$
(4,956)
$
812
$
4,203
(a) On January 1, 2010, we adopted ASU 2009-17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
(b) Includes $1,034 million of provisions for VIEs consolidated on January 1, 2010.
(c) Other primarily included the effects of currency exchange.
(d) During the first quarter of 2010, we transferred the Consumer business in Italy from Consumer to CLL. Prior-period amounts were reclassified to conform to current-period's presentation.
(e) Other primarily included the effects of securitization activity and currency exchange.
17
GE Capital - Consumer financing receivables by region
(In millions)
September, 2010
Installment and
revolving credit (b)
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at September 30, 2010
$
-
$
31,317
7,957
5,979
3,517
469
March 31, 2010
49,239
$
Total at March 31, 2010
$
-
$
September 30, 2009
$
$
Total at September 30, 2009
$
-
$
$
43,330
67,586
$
22,324
10,038
$
$
47,287
$
-
10,035
$
$
12,025
$
$
$
14,196
924
$
10,898
1,040
11,975
44,254
50,766
20,300
18,130
9,101
680
$
143,231
June 30, 2010
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at June 30, 2010
$
-
$
30,426
7,247
6,233
3,607
500
December 31, 2009
48,013
$
Total at December 31, 2009
$
-
$
64,729
$
23,190
$
-
48,166
$
10,012
$
$
987
$
9,764
-
$
13,344
$
132,518
Total
981
$
4,014
4,799
361
1,533
$
43,933
45,578
17,749
15,838
8,838
582
Other (a)
6,799
1,728
4,087
691
39
$
Total
3,017
3,932
313
1,515
-
Auto
8,298
6,350
6,731
3,450
147
$
Other (a)
5,075
1,315
3,067
547
8
Installment and
revolving credit
36,503
8,297
9,284
3,672
589
58,345
$
7,060
5,255
6,225
3,169
74
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
42,946
Auto
11,688
24,171
55,614
21,174
20,463
9,346
775
$
131,543
Total
$
4,157
4,953
354
1,471
$
134,823
Total
Other (a)
-
43,721
46,833
19,194
15,919
8,627
529
3,632
4,529
342
1,471
-
7,215
1,877
4,321
727
56
$
939
Other (a)
Auto
$
Total
2,971
4,283
296
1,546
-
6,051
1,572
3,728
649
25
8,624
6,509
6,274
3,361
195
$
$
Auto
Installment and
revolving credit
37,791
8,412
10,302
3,689
618
60,812
-
8,009
6,145
6,684
3,311
107
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
65,511
Other (a)
5,112
1,389
2,996
534
7
Installment and
revolving credit
33,074
8,054
7,376
3,670
548
52,722
$
7,433
5,565
6,648
3,030
53
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
42,782
Auto
23,364
57,787
21,751
21,251
9,248
869
$
134,270
(a) Represents mainly small and medium enterprise loans.
(b) Balance at September 30, 2010, includes $21,010 million of consolidated VIE loans and leases consolidated on January 1, 2010.
18
GE Capital - Consumer mortgage portfolio by country (a)
(In millions)
Financing
receivables
September 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
June 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K. (b) (d)
Australia
France (d)
Poland
Mexico
Spain
Hungary
All other
$
18,858
5,081
9,302
5,545
1,877
1,074
1,020
6,482
38.3 %
10.3
18.9
11.3
3.8
2.2
2.1
13.2
15.0 %
1.2
2.4
0.9
10.7
18.1
8.4
9.1
23.4 %
9.9
3.5
2.0
14.3
27.4
13.6
10.7
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
18,327
5,253
9,015
5,007
1,961
1,053
929
6,468
38.2 %
10.9
18.8
10.4
4.1
2.2
1.9
13.5
15.9 %
1.3
2.1
0.9
9.6
19.3
7.0
7.8
24.9 %
9.9
3.4
1.9
13.3
29.4
12.0
10.1
Total at September 30, 2010 (c)
$
49,239
100.0 %
8.6 %
13.7 %
Total at June 30, 2010 (c)
$
48,013
100.0 %
8.7 %
14.2 %
Financing
receivables
March 31, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
December 31, 2009
As a % of
total
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
19,236
6,328
10,280
5,518
2,019
1,211
1,025
7,105
36.5 %
12.0
19.5
10.5
3.8
2.3
1.9
13.5
16.1 %
1.1
2.0
0.8
8.7
20.3
6.1
6.0
24.4 %
8.7
3.2
1.8
12.7
29.4
10.0
10.3
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
21,146
7,319
11,455
5,652
2,033
1,316
1,059
8,365
36.2 %
12.5
19.6
9.7
3.5
2.3
1.8
14.3
Total at March 31, 2010
$
52,722
100.0 %
8.2 %
13.5 %
Total at December 31, 2009
$
58,345
100.0 %
Financing
receivables
September 30, 2009
As a % of
total
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
22,135
8,159
11,710
5,698
1,973
1,317
1,073
8,747
36.4 %
13.4
19.3
9.4
3.2
2.2
1.8
14.4
Total at September 30, 2009
$
60,812
100.0 %
Nonearning
receivables
16.1
0.6
1.8
0.4
7.7
21.6
3.8
4.8
Nonearning
receivables
15.6
0.6
1.9
0.7
8.3
19.6
4.6
5.0
Delinquent more
than 30 days
%
7.7 %
25.2
6.5
2.9
1.6
12.8
29.4
8.6
9.5
%
13.3 %
Delinquent more
than 30 days
%
7.8 %
25.8
5.7
3.0
1.5
11.7
31.8
8.2
9.1
%
13.4 %
(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 September 30, 2010, we had in repossession stock approximately 700 houses in the U.K., which had a value of approximately $0.1 billion.
(c) At September 30, 2010, net of credit insurance, approximately 24% of this portfolio comprised loans with introductory, below market rates that are scheduled to adjust at future dates; with high loan-to-value ratios at inception; 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. 80% 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 16.1% and have loan-to-value at origination of 75%. At September 30, 2010, 3% (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 82% and 65%, respectively.
19
GE Capital - Commercial allowance for losses on financing receivables
(In millions)
CLL (d)
Americas
Europe
Asia
Other
Balance
December 31,
2009
$
Real Estate
1,179
575
244
11
66
(10)
-
$
1,245
575
234
11
$
823
190
131
(3)
Gross
write-offs
Other (c)
$
(20)
(47)
(10)
-
$
Balance
September 30,
2010
Recoveries
(787)
(348)
(118)
-
$
95
41
15
-
$
1,356
411
252
8
42
1,536
918
(2)
(597)
2
1,857
28
-
28
56
1
-
-
85
104
-
104
17
-
(96)
-
25
GECAS (d)
$
$
Provision
charged to
operations (b)
1,494
EFS
Total
Balance
January 1,
2010
Adoption of ASU
2009-17 (a)
3,635
(In millions)
CLL (d)
Americas
Europe
Asia
Other
$
98
$
3,733
$
Real Estate
843
311
163
4
$
Provision
charged to
operations
Balance
January 1,
2009
$
2,132
$
969
458
188
4
(78)
$
Gross
write-offs
Other (c)
$
(1,946)
(34)
10
8
3
$
$
153
$
66
53
19
-
301
903
13
(190)
1
EFS
58
42
1
-
-
GECAS (d)
58
69
(1)
-
-
Total
$
1,738
$
2,633
$
-
$
(1,376)
$
3,994
Balance
September 30,
2009
Recoveries
(746)
(299)
(136)
(5)
$
139
$
1,098
533
242
6
1,028
101
126
$
3,134
(a) On January 1, 2010, we adopted ASU 2009-17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
(b) Includes $94 million and $34 million of provisions for CLL and Real Estate, respectively, related to VIEs consolidated on January 1, 2010.
(c) Other primarily included the effects of currency exchange.
(d) During the first quarter of 2010, we transferred the Transportation Financial Services business from GECAS to CLL and the Consumer business in Italy from Consumer to CLL.
Prior-period amounts were reclassified to conform to current-period's presentation.
20
GE Capital - Real Estate debt overview
(In millions)
Region
September 30,
2010
June 30,
2010
Financing receivables
March 31,
2010
December 31,
2009
September 30,
2009
U.S. (a)
Europe
Pacific Basin
Americas
$
27,628
4,719
2,974
7,160
$
28,804
4,700
3,001
7,501
$
30,505
5,103
3,135
8,843
$
27,008
5,807
3,235
8,791
$
27,542
5,986
3,133
8,810
Total (b)
$
42,481
$
44,006
$
47,586
$
44,841
$
45,471
Vintage profile
Originated in
pre-2007
2007
2008
2009
2010
Total
September 30,
2010
Property type
September 30,
2010
June 30,
2010
Financing receivables
March 31,
2010
December 31,
2009
September 30,
2009
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
10,028
10,314
6,467
4,683
3,775
3,937
1,192
121
1,964
$
10,201
10,620
7,010
4,911
3,966
3,981
1,225
120
1,972
$
10,923
12,227
7,418
5,117
4,231
4,229
1,304
124
2,013
$
11,121
8,276
7,649
5,152
4,349
4,302
1,395
122
2,475
$
11,171
8,431
7,932
5,153
4,383
4,377
1,389
128
2,507
Total (b)
$
42,481
$
44,006
$
47,586
$
44,841
$
45,471
Contractual maturities
September 30,
2010
$
14,552
12,418
15,228
138
145
Due in
2010 and prior (c)
2011
2012
2013
2014 and later
$
42,481
Total
$
6,368
10,418
6,961
3,639
15,095
$
42,481
(a) Balance at September 30, 2010, includes $3,905 million of consolidated VIE loans and leases consolidated on January 1, 2010.
(b) Represents total gross financing receivables for Real Estate only.
(c) Includes $2,038 million relating to loans with contractual maturities prior to September 30, 2010.
21
GE Capital - Real Estate equity overview (a)
(In millions, unless otherwise noted)
Region
September 30,
2010
Equity
March 31,
2010
June 30,
2010
December 31,
2009
September 30,
2009
U.S.
Europe
Pacific Basin
Americas
$
9,254
9,905
7,327
2,927
$
9,446
9,477
7,177
2,999
$
9,531
10,864
7,523
3,053
$
9,892
11,705
7,966
3,027
$
10,067
12,384
7,902
3,031
Total
$
29,413
$
29,099
$
30,971
$
32,590
$
33,384
Vintage profile (e)
Originated in
pre-2007
2007
2008
2009
2010
Total
September 30,
2010
$
$
13,787
12,848
2,036
293
449
29,413
Property type
September 30,
2010
Equity
March 31,
2010
June 30,
2010
December 31,
2009
September 30,
2009
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
14,695
4,340
3,579
2,803
1,459
817
724
334
662
$
14,406
4,204
3,617
2,758
1,468
819
733
341
753
$
15,602
4,334
3,775
2,993
1,622
824
745
347
729
$
16,340
4,747
3,869
3,194
1,723
787
724
421
785
$
16,714
4,708
4,054
3,244
1,829
841
714
424
856
Total
$
29,413
$
29,099
$
30,971
$
32,590
$
33,384
Key metrics
September 30,
2010
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
End of period vacancies (d)
Foreclosed properties (f)
25,549
June 30,
2010
$
1,384
$
5.5 %
21.0 %
$
707
March 31,
2010
25,127
$
1,463
$
5.6 %
20.7 %
$
714
26,915
December 31,
2009
$
1,488
$
5.4 %
20.6 %
$
718
28,365
September 30,
2009
$
1,628
$
5.7 %
20.6 %
$
779
29,005
1,621
5.6 %
20.7 %
$
729
(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.
22
GE Capital - equipment leased to others (ELTO), net of depreciation and amortization overview (a)
(In millions)
September 30, 2010
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at September 30, 2010
$
March 31, 2010
Collateral type
GECAS
3,469
8,783
3,008
1,402
1,893
1,125
$
19,680
$
CLL
EFS
30,842
-
$
30,842
$
GECAS
Total
Consumer
1,198
$
1,198
$
EFS
-
$
6
2
6
14
$
CLL
34,311
8,789
3,008
1,404
1,893
2,329
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
51,734
Total at June 30, 2010
$
Total
Consumer
June 30, 2010
Collateral type
December 31, 2009
Collateral type
GECAS
3,025
9,128
3,073
1,549
1,839
1,073
$
19,687
$
CLL
EFS
30,818
-
$
30,818
$
GECAS
Consumer
1,217
$
-
1,217
$
Total
$
33,843
9,135
3,073
1,549
1,840
2,298
$
51,738
7
1
8
EFS
16
Consumer
Total
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
3,179
10,256
2,870
1,687
1,801
979
$
30,207
-
$
1,232
$
10
1
2
14
$
33,386
10,266
2,870
1,688
1,803
2,225
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
3,246
11,509
2,887
1,696
1,892
985
$
29,737
-
$
952
$
10
1
2
15
$
32,983
11,519
2,887
1,697
1,894
1,952
Total at March 31, 2010
$
20,772
$
30,207
$
1,232
$
27
$
52,238
Total at December 31, 2009
$
22,215
$
29,737
$
952
$
28
$
52,932
September 30, 2009
Collateral type
CLL
GECAS
EFS
Total
Consumer
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
3,245
12,762
2,903
1,813
1,890
1,235
$
30,287
-
$
793
$
12
1
3
15
$
33,532
12,774
2,903
1,814
1,893
2,043
Total at September 30, 2009
$
23,848
$
30,287
$
793
$
31
$
54,959
(a) During the first quarter of 2010, we transferred the Transportation Financial Services business from GECAS to CLL. Prior-period amounts were reclassified to conform to current-period's presentation.
23
GE Capital - commercial aircraft asset details (a)
Collateral type (In millions)
September 30,
2010
June 30,
2010
Loans and leases
March 31,
2010
December 31,
2009
September 30,
2009
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
23,083
8,249
3,855
5,322
2,441
$
23,040
7,763
4,211
5,521
2,509
$
22,692
9,044
2,899
5,601
2,467
$
22,882
8,532
3,030
5,931
2,480
$
22,927
8,710
2,991
6,023
2,385
Total
$
42,950
$
43,044
$
42,703
$
42,855
$
43,036
Airline regions (In millions)
September 30,
2010
June 30,
2010
Loans and leases
March 31,
2010
December 31,
2009
September 30,
2009
U.S.
Europe
Pacific Basin
Americas
Other
$
14,659
9,290
7,791
5,258
5,952
$
14,456
9,527
7,769
5,814
5,478
$
14,321
9,552
7,657
5,882
5,291
$
14,700
9,642
6,481
6,099
5,933
$
14,514
9,858
7,554
5,708
5,402
Total
$
42,950
$
43,044
$
42,703
$
42,855
$
43,036
Aircraft vintage profile (In millions)
September 30,
2010
0-5 years
6-10 years
11 - 15 years
15+ years
Total (b)
16,390
14,574
5,230
4,315
$
40,509
(a) Includes loans and financing leases of $12,227 million, $12,337 million, $12,615 million, $13,254 million and $12,926 million (less non-aircraft loans and financing leases of $119 million, $111 million,
$119 million, $136 million and $178 million) and ELTO of $30,842 million, $30,818 million, $30,207 million, $29,737 million and $30,287 million, at September 30, 2010, June 30, 2010,
March 31, 2010, December 31, 2009 and September 30, 2009, respectively, related to commercial aircraft at GECAS.
(b) Excludes aircraft engine loans and leases of $2441 million at September 30, 2010.
24
GE Capital other key areas
25
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 (b)
Equity
Available-for-sale
Trading
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
4,287
865
2,311
1,512
2,807
1,657
2,000
2,343
$
82
11
22
27
53
33
16
5
$
(67)
(162)
(417)
(131)
(230)
(72)
(48)
-
Estimated
fair value
$
4,302
714
1,916
1,408
2,630
1,618
1,968
2,348
Amortized
cost
$
$
Equity
$
5,215
887
2,999
1,599
2,468
994
2,461
1,865
At December 31, 2009
Gross
Gross
unrealized
unrealized
losses
gains
$
83
3
21
5
29
18
15
-
$
(236)
(216)
(722)
(302)
(298)
(26)
(25)
-
Estimated
fair value
$
5,062
674
2,298
1,302
2,199
986
2,451
1,865
56
10
(25)
41
8,479
392
(40)
8,831
958
458
171
-
(26)
-
1,103
458
897
720
227
-
(3)
-
1,121
720
19,254
$
430
$
(1,178)
$
18,506
$
At September 30, 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
Retained interests
Total
At September 30, 2010
Gross
Gross
unrealized
unrealized
losses
gains
26
100
30
24
71
281
663
-
$
(1)
(7)
(2)
(1)
(16)
(28)
(3)
-
$
894
394
1,119
668
931
632
135
-
$
(66)
(155)
(415)
(130)
(214)
(44)
(45)
-
28,584
$
793
$
(1,868)
$
27,509
At December 31, 2009 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
$
611
237
74
68
310
370
-
$
(20)
(120)
(4)
(7)
(14)
(3)
-
$
1,365
421
1,561
1,015
1,312
346
195
-
$
(216)
(96)
(718)
(302)
(291)
(12)
(22)
-
-
-
14
(25)
208
(16)
27
(24)
162
(25)
5
(1)
23
(1)
8
(2)
1,357
$
(83)
$
4,792
$
(1,095)
$
1,901
$
(185)
$
6,250
$
(1,683)
(a) Substantially collateralized by U.S. mortgages.
(b) Included $1,918 million of retained interests at December 31, 2009 accounted for at fair value in accordance with ASC 815, Derivatives and Hedging.
Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
26
GE Capital - investments measured at fair value in earnings (a)
Asset balances at
September 30,
2010
Investment type (In millions)
Equities - trading
$
December 31,
2009
458
$
720
Net earnings impact for
nine months ending
September 30, 2010
$
37
-
1,939
-
3,142
3,708
(92)
Assets of businesses held for sale (LOCOM)
786
125
(45)
Investment companies
385
477
4
Retained interests
Assets held for sale (LOCOM)
Total
$
4,771
$
6,969
$
(96)
(a) Excludes derivatives portfolio.
27
GE Capital - ending net investment (ENI)
September 30,
2010
(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
596.1
June 30,
2010
$
$
618.2
January 1,
2010 (a)
$
653.6
December 31,
2009
$
622.7
(1.3)
(1.2)
(1.0)
(1.5)
(1.5)
(40.0)
(39.8)
(42.0)
(42.2)
(48.1)
554.8
$
(65.4)
$
589.2
March 31,
2010
489.4
548.2
$
(61.2)
$
487.0
575.2
$
(59.6)
$
515.6
609.9
$
(63.9)
$
546.0
573.1
(63.7)
$
509.4
(a) Includes impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
28
GECC - ratios
Leverage ratio
(In billions)
Debt
Equity (a)
September 30,
2010
$
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
481.4
70.5
June 30,
2010
$
476.6
69.8
6.8:1
$
481.4
(7.7)
(65.4)
408.3
March 31,
2010
$
6.8:1
$
476.6
(7.7)
(61.2)
407.7
January 1,
2010
501.7
71.7
$
7.0:1
$
501.7
(7.7)
(59.6)
434.4
December 31,
2009
535.7
72.2
$
497.5
73.7
7.4:1
$
535.7
(7.7)
(63.7)
464.2
September 30,
2009
$
6.7:1
$
497.5
(7.7)
(63.7)
426.0
505.1
73.2
6.9:1
$
505.1
(7.7)
(56.3)
441.1
Equity (a)
Add: hybrid debt
Adjusted equity
70.5
7.7
78.2
69.8
7.7
77.5
71.7
7.7
79.4
72.2
7.7
79.9
73.7
7.7
81.4
73.2
7.7
80.9
Adjusted leverage ratio
5.2:1
5.3:1
5.5:1
5.8:1
5.2:1
5.5:1
Tangible common equity to tangible assets ratio
(In billions)
September 30,
2010
June 30,
2010
March 31,
2010
January 1,
2010
December 31,
2009
September 30,
2009
Total equity (a)
Less: Goodwill and other intangibles
$
70.5
(30.1)
$
69.8
(29.5)
$
71.7
(31.3)
$
72.2
(32.0)
$
73.7
(32.0)
$
73.2
(31.6)
Tangible common equity
$
40.4
$
40.3
$
40.4
$
40.2
$
41.7
$
41.6
Total assets
Less: Goodwill and other intangibles
$
596.1
(30.1)
$
589.2
(29.5)
$
618.2
(31.3)
$
653.6
(32.0)
$
622.7
(32.0)
$
630.2
(31.6)
Tangible assets
$
566.0
$
559.7
$
587.0
$
621.7
$
590.7
$
598.7
Tangible common equity to tangible assets
7.1 %
7.2 %
6.9 %
6.5 %
7.1 %
7.0
Tier 1 common ratio (b)
8.2 %
8.1 %
7.8 %
7.5 %
7.6 %
7.5
(a) Equity represents amounts available to GECC shareholders, excluding noncontrolling interests.
(b) Estimated based on SCAP requirements.
29
GECS supplemental information
30
GECS - assets by region (a), (b)
At
(In millions)
September 30,
2010
Property, plant and
equipment (net)
Financing
receivables (net)
155,659
$
U.S.
Europe
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other
$
Total
$
331,343
$
53,690
$
623,440
Total at June 30, 2010
$
333,262
$
53,690
$
616,713
Total at March 31, 2010
$
356,185
$
55,926
$
645,108
Total at December 31, 2009
$
336,926
$
56,717
$
648,771
Total at September 30, 2009
$
348,518
$
58,712
$
656,781
80,697
18,697
31,293
30,920
14,077
10,664
Total assets
$
329,180
$
110,669
31,000
54,490
44,672
53,429
5,723
308
2,776
1,444
32,775
June 30,
2010
March 31,
2010
December 31,
2009
September 30,
2009
Total assets
Total assets
Total assets
Total assets
332,193
$
106,024
27,515
52,749
44,797
53,435
$
616,713
339,862
$
118,749
30,616
57,670
44,167
54,044
$
645,108
329,622
$
130,845
31,499
60,233
42,333
54,239
$
648,771
328,662
136,119
32,044
62,986
42,921
54,049
$
656,781
(a) Excludes assets of discontinued operations.
(b) Prior period amounts have been reclassified to conform to current-period's presentation.
31
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
Amortized
cost
$
Retained interests (b)
Equity
Available-for-sale
Trading
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
22,194
2,960
3,335
2,834
3,360
2,369
2,482
3,086
$
2,357
185
138
193
99
91
101
73
$
Estimated
fair value
(199)
(176)
(460)
(182)
(233)
(82)
(48)
(9)
$
24,352
2,969
3,013
2,845
3,226
2,378
2,535
3,150
$
Equity
$
At December 31, 2009
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
$
22,778
2,638
4,005
3,053
2,994
1,831
2,902
2,628
$
973
42
79
89
48
59
63
46
$
(724)
(278)
(766)
(440)
(305)
(50)
(29)
-
Estimated
fair value
$
23,027
2,402
3,318
2,702
2,737
1,840
2,936
2,674
56
10
(25)
41
8,479
392
(40)
8,831
550
458
183
-
(26)
-
707
458
489
720
242
-
(5)
-
726
720
43,684
$
3,430
$
(1,440)
$
45,674
$
At September 30, 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
Retained interests
Total
At September 30, 2010
Gross
Gross
unrealized
unrealized
losses
gains
216
165
32
25
81
333
682
272
$
(7)
(11)
(2)
(1)
(16)
(30)
(3)
(9)
$
2,324
548
1,353
784
944
722
137
-
$
(192)
(165)
(458)
(181)
(217)
(52)
(45)
-
52,517
$
2,033
$
(2,637)
$
51,913
At December, 31 2009 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
$
2,818
920
118
167
126
374
399
-
$
(78)
(139)
(14)
(5)
(11)
(18)
(4)
-
$
4,801
614
1,678
1,293
1,342
481
224
-
$
(646)
(139)
(752)
(435)
(294)
(32)
(25)
-
-
-
14
(25)
208
(16)
27
(24)
169
(25)
5
(1)
92
(2)
10
(3)
1,975
$
(104)
$
6,831
$
(1,336)
$
5,222
$
(287)
$
10,470
$
(2,350)
(a) Substantially collateralized by U.S. mortgages.
(b) Includes $1,918 million of retained interests at December 31, 2009 accounted for at fair value in accordance with ASC 815, Derivatives and Hedging.
Change from December 31, 2009, reflects the impact of adoption of ASU 2009-17, amendments to ASC 810, Consolidation.
32
GECS - funding
(In billions)
September 30,
2010
June 30,
2010
March 31,
2010
December 31,
2009
September 30,
2009
Commercial paper
Long-term debt (a)
Deposits/brokered CD's
Alternate funding / other
Non-recourse borrowings of consolidated securitization entities
$
41.3
347.5
41.9
25.2
30.5
$
46.0
339.9
37.5
24.9
33.4
$
46.0
358.7
38.3
26.8
36.8
$
47.3
384.4
38.9
25.8
3.9
$
50.0
393.7
36.8
23.5
4.4
Total debt
$
486.5
$
481.7
$
506.6
$
500.3
$
508.4
$
52.1
$
51.7
$
51.6
$
51.7
$
52.3
Metrics
Bank lines
Commercial paper coverage (b)
126.2 %
112.4 %
112.0 %
109.0 %
104.6 %
Cash and equivalents
$
66.0
$
61.5
$
60.0
$
64.4
$
56.9
LT debt < 1 year
$
62.8
$
63.0
$
64.6
$
70.2
$
68.9
(a) Includes $55 billion, $58 billion, $59 billion, $59 billion and $55 billion of long term debt issued under the TLGP program at September 30, 2010, June 30, 2010,
March 31, 2010, December 31, 2009 and September 30, 2009, respectively.
(b) Commercial paper coverage represents bank lines as a percentage of the commercial paper balance as of the end of the relevant period.
33
GECS - ratios
Leverage ratio
(In billions)
Debt
Equity (a)
September 30,
2010
$
486.5
66.9
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
June 30,
2010
$
481.7
67.3
7.3:1
$
486.5
(7.7)
(66.0)
412.7
March 31,
2010
$
7.2:1
$
481.7
(7.7)
(61.5)
412.4
January 1,
2010
506.6
68.5
$
7.4:1
$
506.6
(7.7)
(60.0)
438.9
December 31,
2009
538.5
68.9
$
500.3
70.8
7.8:1
$
538.5
(7.7)
(64.4)
466.4
September 30,
2009
$
508.4
70.7
7.1:1
$
500.3
(7.7)
(64.4)
428.3
7.2:1
$
508.4
(7.7)
(56.9)
443.7
Equity (a)
Add: hybrid debt
Adjusted equity
66.9
7.7
74.6
67.3
7.7
75.0
68.5
7.7
76.2
68.9
7.7
76.6
70.8
7.7
78.6
70.7
7.7
78.4
Adjusted leverage ratio
5.5:1
5.5:1
5.8:1
6.1:1
5.5:1
5.7:1
Tangible common equity to tangible assets ratio
(In billions)
September 30,
2010
June 30,
2010
March 31,
2010
January 1,
2010
December 31,
2009
September 30,
2009
Total equity (a)
Less: Goodwill and other intangibles
$
66.9
(30.1)
$
67.3
(29.9)
$
68.5
(31.7)
$
68.9
(32.4)
$
70.8
(32.4)
$
70.7
(32.0)
Tangible common equity
$
36.7
$
37.3
$
36.8
$
36.5
$
38.4
$
38.6
Total assets
Less: Goodwill and other intangibles
$
624.7
(30.1)
$
617.9
(29.9)
$
646.1
(31.7)
$
680.8
(32.4)
$
650.2
(32.4)
$
658.3
(32.0)
Tangible assets
$
594.6
$
588.0
$
614.4
$
648.4
$
617.8
$
626.3
Tangible common equity to tangible assets
6.2 %
6.3 %
6.0 %
5.6 %
6.2 %
6.2
Tier 1 common ratio (b)
7.3 %
7.1 %
6.8 %
6.6 %
6.6 %
6.5
(a) Equity represents amounts available to GECS shareholders, excluding noncontrolling interests.
(b) Estimated based on SCAP requirements.
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 equivalents
Highly liquid debt instruments with original maturities of three months or less, such as commercial paper. Typically included with cash
for reporting purposes, unless designated as available-for-sale and included with investment securities.
Cash flow hedges
Qualifying derivative instruments that we use to protect ourselves against exposure to variability in future cash flows. The exposure may
be associated with an existing asset or liability, or with a forecasted transaction. See "Hedge."
Commercial paper
Unsecured, unregistered promise to repay borrowed funds in a specified period ranging from overnight to 270 days.
Derivative instrument
A financial instrument or contract with another party (counterparty) that is designed to meet any of a variety of risk management
objectives, including those related to fluctuations in interest rates, currency exchange rates or commodity prices. Options, forwards and
swaps are the most common derivative instruments we employ. See "Hedge."
Discontinued operations
Certain businesses we have sold or committed to sell within the next year and therefore will no longer be part of our ongoing operations.
The net earnings, assets and liabilities, and cash flows of such businesses are separately classified on our Statement of Earnings and
Statement of Financial Position for all periods presented.
Ending Net Investment (ENI)
The total capital we have invested in the financial services business. It is the sum of short-term borrowings, long-term borrowings and
equity (excluding noncontrolling interests) adjusted for unrealized gains and losses on investment securities and hedging instruments.
Alternatively, it is the amount of assets of continuing operations less the amount of non-interest bearing liabilities.
Equipment leased to others
Rental equipment we own that is available to rent and is stated at cost less accumulated depreciation.
Fair value hedge
Qualifying derivative instruments that we use to reduce the risk of changes in the fair value of assets, liabilities or certain types of firm
commitments. Changes in the fair values of derivative instruments that are designated and effective as fair value hedges are recorded in
earnings, but are offset by corresponding changes in the fair values of the hedged items. See "Hedge."
Financing receivables
Investment in contractual loans and financing leases due from customers (not investment securities).
Goodwill
The premium paid for acquisition of a business. Calculated as the purchase price less the fair value of net assets acquired (net assets are
identified tangible and intangible assets, less liabilities assumed).
Hedge
A technique designed to eliminate risk. Often refers to the use of derivative financial instruments to offset changes in interest rates,
currency exchange rates or commodity prices, although many business positions are "naturally hedged" - for example, funding a U.S.
fixed-rate investment with U.S. fixed-rate borrowings is a natural interest rate hedge.
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Glossary
Term
Definition
Intangible asset
A non-financial asset lacking physical substance, such as goodwill, patents, licenses, trademarks and customer relationships.
Interest rate swap
Agreement under which two counterparties agree to exchange one type of interest rate cash flow for another. In a typical
arrangement, one party periodically will pay a fixed amount of interest, in exchange for which that party will receive variable
payments computed using a published index. See "Hedge."
Investment securities
Generally, an instrument that provides an ownership position in a corporation (a stock), a creditor relationship with a corporation or
governmental body (a bond), rights to contractual cash flows backed by pools of financial assets or rights to ownership such as those
represented by options, subscription rights and subscription warrants.
Managed receivables
Total receivable amounts on which we continue to perform billing and collection activities, including receivables that have been sold
with and without credit recourse and are no longer reported on our Statement of Financial Position.
Net operating income
Represents operating income less operating expenses for owned real estate properties.
Retained interest
A portion of a transferred financial asset retained by the transferor that provides rights to receive portions of the cash inflows from
that asset.
Securitization
A process whereby loans or other receivables are packaged, underwritten and sold to investors. In a typical transaction, assets are
sold to a special purpose entity, which purchases the assets with cash raised through issuance of beneficial interests (usually debt
instruments) to third-party investors. Whether or not credit risk associated with the securitized assets is retained by the seller depends
on the structure of the securitization. See "Variable interest entity."
Variable interest entity (VIE)
Entity defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810 (FASB Interpretation 46
(Revised)), and that must be consolidated by its primary beneficiary. A variable interest entity has one or both of the following
characteristics: (1) its equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated
financial support from other parties, or (2) as a group, the equity investors lack one or more of the following characteristics: (a)
direct/indirect ability to make decisions, (b) obligation to absorb expected losses, or (c) right to receive expected residual returns.
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