Download GE Capital Fourth Quarter 2011

GE Capital
Fourth quarter 2011 supplement
Results are unaudited. This document contains “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking statements often
address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be
materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates,
commodity and equity prices and the value of financial assets; 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 grey zone claims; potential financial implications from the Japanese natural disaster; 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, joint ventures, and dispositions and our success in completing
announced transactions and integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and
competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to
update our forward-looking statements.
This document may also contain non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be
informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons.
Prior period amounts have been recasted for discontinued operations.
Fourth quarter 2011 supplemental information
Table of Contents
Page #
1. GE Capital structure
a) GE Capital structure
1
b) GE Capital structure - post GECC/GECS merger
2
2. Financial statements
a) GECC
4-5
b) GECS
6-7
c) GECC continuing operations (GE Capital)
8
3. GE Capital asset quality
a) Assets by region
10
b) Assets in selected emerging markets
11
c) Portfolio overview and ratios
12-19
d) Nonearning and nonaccrual financing receivables
20
e) Consumer allowance for losses on financing receivables
21
f) Consumer financing receivables by region
22
g) Consumer mortgage portfolio by country
23
h) Commercial allowance for losses on financing receivables
24
i) Real estate allowance for losses on financing receivables
25
j) Commercial real estate debt and equity overview
26-27
k) Equipment leased to others overview
28
l) Commercial aircraft asset details
29
4. GE Capital other key areas
a) Investment securities
31
b) Investments measured at fair value in earnings
32
c) Ending net investment
33
d) GECC ratios
34
5. GECS supplemental information
a) Investment securities
36
b) Funding
37
c) Ratios
38
6. GECC/GECS Merger
39
7. Appendix
a) Glossary
41-42
GE Capital structure
General Electric Company
General Electric Capital Services,
Inc. (GECS) (a)
General Electric Capital
Corporation (GECC) (a)
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
(a- On January 20, 2012, General Electric Company ("GE") announced that its wholly-owned subsidiary, General Electric Capital Services, Inc. ("GECS"), intends to merge (the "Merger") with and into GECS’s wholly-owned subsidiary,
GECC. The Merger will simplify GE’s financial services' corporate structure by consolidating financial services entities and assets within the GE organization and simplify Securities and Exchange Commission and regulatory reporting.
The Merger will be implemented pursuant to the Agreement and Plan of Merger, dated as of January 19, 2012, by and between GECS and GECC (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, GECC will
be the surviving corporation and will succeed to and assume all GECS’s rights and obligations and GECC will be wholly-owned directly by GE. Upon completion of the Merger, GECS’s subsidiaries, other than GECC (into which GECS will
be merged), will become subsidiaries of GECC. The directors and officers of GECC before and after the Merger will be the same.
1
GE Capital structure - post GECC/GECS merger
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 January 20, 2012, General Electric Company ("GE") announced that its wholly-owned subsidiary, General Electric Capital Services, Inc. ("GECS"), intends to merge (the "Merger") with and into GECS’s wholly-owned subsidiary,
GECC. The Merger will simplify GE’s financial services' corporate structure by consolidating financial services entities and assets within the GE organization and simplify Securities and Exchange Commission and regulatory reporting.
The Merger will be implemented pursuant to the Agreement and Plan of Merger, dated as of January 19, 2012, by and between GECS and GECC (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, GECC will be
the surviving corporation and will succeed to and assume all GECS’s rights and obligations and GECC will be wholly-owned directly by GE. Upon completion of the Merger, GECS’s subsidiaries, other than GECC (into which GECS will
be merged), will become subsidiaries of GECC. The directors and officers of GECC before and after the Merger will be the same.
2
Financial statements
3
GECC - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
December 31,
2011
$
September 30,
2011
10,713
32
10,745
$
11,116
32
11,148
For three months ending
June 30,
2011
$
11,584
42
11,626
March 31,
2011
$
For twelve months ending
December 31,
December 31,
2011
2010
December 31,
2010
12,169
42
12,211
$
11,702
44
11,746
$
45,582
148
45,730
$
45,889
533
46,422
Costs and expenses
Interest
Operating and administrative
Cost of goods sold
Investment contracts, insurance losses and insurance annuity benefits
Provision for losses on financing receivables (see pages 20, 23-24)
Depreciation and amortization
Total costs and expenses
3,124
3,007
27
27
1,095
1,711
8,991
3,557
3,107
30
27
1,020
1,836
9,577
3,583
3,319
38
30
811
1,792
9,573
3,581
3,352
40
24
1,157
1,775
9,929
3,602
3,815
43
35
1,352
1,971
10,818
13,845
12,785
135
108
4,083
7,114
38,070
14,494
14,133
501
144
7,176
7,749
44,197
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
1,754
(94)
1,571
(66)
2,053
(378)
2,282
(446)
928
124
7,660
(984)
2,225
949
Earnings from continuing operations (a)
Earnings (loss) from discontinued operations, net of taxes
1,660
(260)
1,505
2
1,675
218
1,836
57
1,052
634
6,676
17
3,174
(867)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,400
38
1,507
38
1,893
20
1,893
31
1,686
25
6,693
127
2,307
16
Net earnings (loss) attributable to GECC
$
1,362
$
1,469
GECC - statement of changes in shareowner's equity
December 31,
2011
(In millions)
Changes in GECC shareowner's equity
Balance at beginning of period
Accounting changes
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
$
September 30,
2011
$
For three months ending
June 30,
2011
March 31,
2011
$
(1)
5
(683)
484
(210)
(404)
1,362
958
(300)
(848)
(105)
28
(1,225)
1,469
244
38
985
(195)
828
1,873
2,701
(77)
1,542
(64)
(1)
1,400
1,862
3,262
202
172
271
3
648
1,661
2,309
(334)
996
120
(183)
599
6,566
7,165
549
(2,721)
469
54
(1,649)
2,291
642
$
76,143
$
70,493
2,291
79
78,844
$
$
For twelve months ending
December 31,
December 31,
2011
2010
December 31,
2010
72,881
6,566
-
$
$
1,661
-
79,087
76,143
$
(1)
$
$
1,862
-
80,045
78,844
1,873
73,718
(1,565)
86
79,087
$
$
72,881
$
$
72,881
80,045
$
$
$
72,881
(a) Effective January 1, 2010, GE Capital segment earnings are equal to the earnings from continuing operations for GECC.
4
GECC - Condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 30)
Inventories
Financing receivables - net (see pages 11 - 18)
Other receivables
Property, plant & equipment, less accumulated amortization
of $23,600, $24,291, $24,961, $25,125, and $25,390
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
December 31,
2011
$
75,722
17,821
51
289,307
12,915
September 30,
2011
$
82,391
17,362
44
293,737
13,211
June 30,
2011
$
52,309
27,726
1,702
79,743
3,050
1,461
51,399
27,230
1,539
75,819
711
1,148
March 31,
2011
77,258
18,372
52
300,749
13,657
$
55,307
28,173
1,843
74,410
895
6,407
December 31,
2010
66,497
18,666
63
303,365
13,313
$
54,286
27,759
1,874
72,306
1,587
10,106
59,538
17,952
66
312,234
12,289
53,747
27,508
1,874
77,002
3,127
12,375
$
553,662
$
572,736
$
577,123
$
569,822
$
577,712
$
131,292
7,059
29,258
43,115
234,320
4,443
17,983
3,865
345
1,247
$
121,733
7,835
29,022
41,515
259,332
4,859
21,983
3,091
1,813
1,261
$
118,599
7,739
29,075
41,548
268,830
5,054
22,283
1,717
527
1,706
$
105,393
8,271
29,300
39,397
278,732
5,554
19,246
4,057
550
2,001
$
113,646
6,839
30,018
37,298
284,346
5,779
16,859
6,109
592
2,181
Total liabilities
472,927
492,444
497,078
492,501
503,667
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
(671)
(545)
(1,227)
(563)
28,462
54,533
(676)
138
(1,711)
(353)
28,462
53,171
(376)
986
(1,606)
(381)
28,463
51,702
(414)
1
(1,411)
(381)
28,463
49,829
(337)
(1,541)
(1,347)
(380)
28,463
47,967
Total GECC shareowner's equity
80,045
79,087
78,844
76,143
72,881
690
1,205
1,201
1,178
1,164
80,735
80,292
80,045
77,321
74,045
Noncontrolling interests
Total equity
Total liabilities and equity
$
553,662
$
572,736
$
577,123
$
569,822
$
577,712
5
GECS - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
December 31,
2011
$
September 30,
2011
11,547
32
11,579
$
11,986
32
12,018
For three months ending
June 30,
2011
$
12,401
42
12,443
March 31,
2011
$
For twelve months ending
December 31,
December 31,
2011
2010
December 31,
2010
12,999
42
13,041
$
12,618
44
12,662
$
48,933
148
49,081
$
49,348
533
49,881
Costs and expenses
Interest
Operating and administrative
Cost of goods sold
Investment contracts, insurance losses and insurance annuity benefits
Provision for losses on financing receivables (see pages 20, 23-24)
Depreciation and amortization
Total costs and expenses
3,133
3,147
27
745
1,095
1,712
9,859
3,560
3,268
30
755
1,020
1,837
10,470
3,601
3,454
38
790
811
1,792
10,486
3,589
3,483
40
769
1,157
1,776
10,814
3,610
3,946
43
844
1,352
1,971
11,766
13,883
13,352
135
3,059
4,083
7,117
41,629
14,526
14,681
501
3,197
7,176
7,752
47,833
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
1,720
(64)
1,548
(57)
1,957
(344)
2,227
(428)
896
136
7,452
(893)
2,048
991
Earnings from continuing operations
Earnings (loss) from discontinued operations, net of taxes
1,656
(198)
1,491
2
1,613
217
1,799
57
1,032
634
6,559
78
3,039
(868)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,458
38
1,493
38
1,830
20
1,856
31
1,666
25
6,637
127
2,171
16
Net earnings (loss) attributable to GECS
$
1,420
$
1,455
GECS - statement of changes in shareowner's equity
December 31,
2011
(In millions)
Changes in GECS shareowner's equity
Balance at beginning of period
Accounting changes
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
$
September 30,
2011
75,959
$
For three months ending
June 30,
2011
March 31,
2011
$
1
155
(702)
487
(210)
(270)
1,420
1,150
248
(832)
(47)
28
(603)
1,455
852
391
993
(190)
1,194
1,810
3,004
(188)
1,553
(70)
(1)
1,294
1,825
3,119
(22)
180
248
3
409
1,641
2,050
606
1,012
180
(183)
1,615
6,510
8,125
14
(2,735)
488
54
(2,179)
2,155
(24)
72,104
$
66,854
2,155
80
$
$
$
For twelve months ending
December 31,
December 31,
2011
2010
December 31,
2010
68,984
6,510
1
75,108
$
1,641
-
$
72,104
$
(1)
75,959
$
1,825
1
$
75,108
1,810
70,833
(1,910)
85
77,110
$
$
68,984
$
$
68,984
77,110
$
$
$
68,984
6
GECS - Condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 35)
Inventories
Financing receivables - net (see pages 11 - 18)
Other receivables
Property, plant & equipment, less accumulated amortization
of $23,615, $24,307, $24,977, $25,140, and $25,404
Goodwill
Other intangible assets - net
Other assets
Assets of businesses held for sale
Assets of discontinued operations
Total assets
Liabilities and equity
Short-term borrowings (see page 36)
Accounts payable
Non-recourse borrowings of consolidated securitization entities (see page 36)
Bank deposits (see page 36)
Long-term borrowings (see page 36)
Investment contracts, insurance liabilities and insurance annuity benefits
Other liabilities
Deferred income taxes
Liabilities of businesses held for sale
Liabilities of discontinued operations
December 31,
2011
$
76,702
47,359
51
289,307
13,390
September 30,
2011
$
83,278
46,442
44
293,737
13,689
June 30,
2011
$
52,328
27,726
1,710
79,542
3,050
1,516
51,419
27,230
1,546
75,618
711
1,203
March 31,
2011
77,983
45,331
52
300,749
14,263
$
55,326
28,173
1,851
74,598
895
6,413
December 31,
2010
67,253
44,872
63
303,365
14,009
$
54,306
27,759
1,882
72,471
1,587
10,106
60,257
43,921
66
312,234
12,919
53,768
27,508
1,883
77,197
3,127
12,375
$
584,536
$
603,062
$
605,634
$
597,673
$
605,255
$
136,333
7,239
29,258
43,115
234,391
30,198
19,062
5,318
345
1,477
$
126,866
7,995
29,022
41,515
259,404
30,405
22,881
4,440
1,813
1,557
$
123,643
7,870
29,075
41,548
268,962
29,854
23,127
2,759
527
1,960
$
110,603
8,372
29,300
39,397
278,792
30,363
19,903
4,864
550
2,247
$
118,797
7,035
30,018
37,298
284,407
29,993
17,554
6,990
592
2,423
Total liabilities
506,736
525,898
529,325
524,391
535,107
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
(33)
(399)
(1,101)
(563)
27,617
51,578
(188)
303
(1,588)
(353)
27,616
50,158
(436)
1,135
(1,541)
(381)
27,617
48,703
(827)
142
(1,351)
(381)
27,617
46,893
(639)
(1,411)
(1,281)
(380)
27,616
45,068
Total GECS shareowner's equity
77,110
75,959
75,108
72,104
68,984
690
1,205
1,201
1,178
1,164
77,800
77,164
76,309
73,282
70,148
Noncontrolling interests
Total equity
Total liabilities and equity
$
584,536
$
603,062
$
605,634
$
597,673
$
605,255
7
GECC continuing operations (GE Capital)
(In millions)
Revenues
Less: Interest expense
Net revenues
December 31,
2011
$
10,745
(3,124)
7,621
September 30,
2011
$
11,148
(3,557)
7,591
For three months ending
June 30,
2011
$
11,626
(3,583)
8,043
March 31,
2011
$
12,211
(3,581)
8,630
For twelve months ending
December 31,
December 31,
2011
2010
December 31,
2010
$
11,746
(3,602)
8,144
$
45,730
(13,845)
31,885
$
46,422
(14,494)
31,928
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
2,835
1,711
226
4,772
2,759
1,836
405
5,000
2,771
1,792
616
5,179
2,687
1,775
729
5,191
2,909
1,971
984
5,864
11,052
7,114
1,976
20,142
10,794
7,749
3,984
22,527
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
2,849
(1,095)
2,591
(1,020)
2,864
(811)
3,439
(1,157)
2,280
(1,352)
11,743
(4,083)
9,401
(7,176)
Earnings before income taxes
Benefit (provision) for income taxes
1,754
(94)
1,571
(66)
2,053
(378)
2,282
(446)
928
124
7,660
(984)
2,225
949
Earnings from continuing operations before noncontrolling interests
Less: Net earnings (loss) attributable to noncontrolling interests
$
1,660
38
$
1,505
38
$
1,675
20
$
1,836
31
$
1,052
25
$
6,676
127
$
3,174
16
GE Capital segment profit
$
1,622
$
1,467
$
1,655
$
1,805
$
1,027
$
6,549
$
3,158
(In millions)
Segment profit
CLL
Consumer
Real Estate
EFS
GECAS
December 31,
2011
$
$
GECC corporate items and eliminations
GE Capital segment profit
$
September 30,
2011
777
575
(153)
110
315
1,624
(2)
$
1,622
$
$
For three months ending
June 30,
2011
688
737
(82)
79
208
1,630
(163)
$
1,467
$
$
March 31,
2011
701
1,020
(335)
139
321
1,846
(191)
$
1,655
$
$
For twelve months ending
December 31,
December 31,
2011
2010
December 31,
2010
554
1,219
(358)
112
306
1,833
(28)
$
1,805
$
$
567
546
(409)
33
432
1,169
(142)
$
1,027
$
$
2,720
3,551
(928)
440
1,150
6,933
(384)
$
6,549
$
$
1,554
2,523
(1,741)
367
1,195
3,898
(740)
3,158
8
GE Capital asset quality
9
GE Capital - Assets by region (a)
(In millions)
December 31,
2011
Property, plant and
equipment (net)
Financing
receivables (net)
143,083
$
U.S. (b)
Europe (c)
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other (d)
$
Total
$
289,307
$
51,399
$
552,514
Total at September 30, 2011
$
293,737
$
52,309
$
571,275
Total at June 30, 2011
$
300,749
$
55,307
$
570,716
Total at March 31, 2011
$
303,365
$
54,286
$
559,716
Total at December 31, 2010
$
312,234
$
53,747
$
565,337
74,601
16,908
24,628
17,986
12,101
10,985
Total assets
$
4,695
211
2,675
1,382
31,451
301,192
$
99,098
24,509
46,749
30,374
50,592
At
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
Total assets
Total assets
Total assets
Total assets
307,647
$
104,516
26,666
47,997
31,788
52,661
$
571,275
297,988
$
109,909
29,561
48,023
32,114
53,121
$
570,716
290,485
$
108,912
28,067
46,516
32,725
53,011
$
559,716
292,938
108,728
30,215
47,174
32,738
53,544
$
565,337
(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 $10,400 million at December 31, 2011.
(d) Includes total assets of $48,821 million at GECAS, approximately $11,500 million of which relates to European airlines and other investments at December 31, 2011.
10
GE Capital - Assets in selected emerging markets
(In millions)
Selected emerging markets (a)
Eastern Europe
Poland
Czech Republic
Hungary
Turkey
Total Eastern Europe
December 31,
2011
Property, plant and
equipment (net)
Financing
receivables (net)
$
8,043
5,046
2,864
15,953
$
106
51
35
192
Total assets
$
10,942
7,195
4,043
316
22,496
$
At
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
Total assets
Total assets
Total assets
Total assets
12,376
7,305
4,497
403
24,581
$
13,689
7,844
4,817
972
27,322
$
13,202
7,553
4,576
440
25,771
$
13,236
6,657
4,427
3,074
27,394
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
1,066
92
1,158
12
12
1,495
1,619
3,114
1,682
1,636
3,318
1,808
1,618
3,426
1,789
1,636
3,425
1,777
1,621
3,398
Americas
Mexico
Total Americas
5,098
5,098
795
795
8,215
8,215
8,253
8,253
8,344
8,344
8,406
8,406
8,411
8,411
Total
$
22,209
$
999
$
33,825
Total at September 30, 2011
$
24,196
$
992
$
36,152
Total at June 30, 2011
$
25,684
$
1,070
$
39,092
Total at March 31, 2011
$
24,934
$
1,061
$
37,602
Total at December 31, 2010
$
24,524
$
1,077
$
39,203
$
36,152
$
39,092
$
37,602
$
39,203
(a) We have disclosed here selected emerging markets where our total assets at December 31, 2010, exceed $1 billion. Assets of discontinued operations are excluded.
11
GE Capital - CLL portfolio overview (a) (b)
(In millions, unless otherwise noted)
Balances
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
September 30,
2011
80,505
36,899
11,635
436
129,475
$
$
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
September 30,
2011
1,862
1,167
269
11
3,309
$
$
$
September 30,
2011
889
400
157
4
1,450
$
$
$
995
403
150
5
1,553
$
$
$
81,518
37,897
11,759
585
131,759
March 31,
2011
$
$
Nonearning receivables (d)
June 30,
2011
$
$
2,060
1,156
266
6
3,488
$
1,124
433
180
6
1,743
120
50
14
2
186
$
$
153
70
40
263
$
$
139
64
71
274
84,825
37,093
11,545
619
134,082
$
$
$
$
$
March 31,
2011
$
$
$
2,573
1,241
406
6
4,226
December 31,
2010
1,254
443
228
6
1,931
$
88,558
37,498
11,943
664
138,663
December 31,
2010
2,397
1,209
346
6
3,958
$
Allowance for losses (e)
June 30,
2011
$
December 31,
2010
March 31,
2011
Write-offs (net) - for three months ending
September 30,
June 30,
2011
2011
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
1,967
1,086
230
16
3,299
$
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
81,072
37,130
11,914
469
130,585
Financing receivables (c)
June 30,
2011
$
$
March 31,
2011
1,288
429
222
6
1,945
December 31,
2010
172
35
58
265
$
$
314
71
56
1
442
(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 $5,475 million at December 31, 2011.
(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. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
12
GE Capital - CLL portfolio overview (a)
Ratios
Nonearning receivables as a percent of financing receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
2.3 %
3.2
2.3
2.5
2.6
47.7 %
34.3
58.4
36.4
43.8
54.6 %
37.5
67.7
100.0
50.0
1.2 %
1.1
1.3
1.1
1.2
0.6 %
0.5
0.5
1.8
0.6
52.3 %
36.6
65.9
100.0
48.8
1.4 %
1.1
1.5
1.0
1.3
December 31,
2011
0.8 %
0.7
1.4
0.8
1.99 %
1.99 %
December 31,
2010
1.5 %
1.1
1.9
0.9
1.4
December 31,
2010
0.8 %
0.4
2.0
NM
0.8
March 31,
2011
1.94 %
50.1 %
34.6
54.7
100.0
46.0
1.5 %
1.2
2.0
1.0
1.4
0.7 %
0.7
2.4
0.8
CLL
June 30,
2011
September 30,
2011
2.9 %
3.3
3.4
0.9
3.0
December 31,
2010
Write-offs (net) as a percent of financing receivables (d)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Delinquency
50.6 %
37.1
65.2
31.3
47.1
1.1 %
1.1
1.3
0.9
1.1
CLL
Americas
Europe
Asia
Other
Total
2.8 %
3.3
3.0
1.0
3.0
Allowance for losses as a percent of total financing receivables (c)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
2.5 %
3.1
2.3
1.0
2.6
Allowance for losses as a percent of nonearning receivables (c)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
CLL
Americas
Europe
Asia
Other
Total
2.4 %
2.9
1.9
3.4
2.5
December 31,
2010
1.4 %
0.8
1.9
0.6
1.3
December 31,
2010
2.03 %
2.14 %
(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. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
(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.
13
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Balances
December 31,
2011
EFS
GECAS
Other
$
5,912
11,901
1,282
September 30,
2011
$
December 31,
2011
EFS
GECAS
Other
$
22
55
65
September 30,
2011
$
December 31,
2011
EFS
GECAS
Other
$
26
17
37
$
(1)
1
16
135
62
71
September 30,
2011
$
36
14
43
$
6,143
11,952
1,517
March 31,
2011
$
Nonearning receivables (b)
June 30,
2011
$
136
64
87
$
Allowance for losses (c)
June 30,
2011
$
35
15
54
December 31,
2010
6,662
12,104
1,640
$
March 31,
2011
162
16
99
$
March 31,
2011
$
$
(1)
(1)
12
$
(7)
3
8
$
7,011
12,615
1,788
December 31,
2010
62
102
December 31,
2010
36
12
55
$
Write-offs (net) - for three months ending
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
EFS
GECAS
Other
5,977
11,841
1,388
Financing receivables (a)
June 30,
2011
22
20
58
December 31,
2010
4
8
$
71
6
(a) Financing receivables include $22 million, $28 million, and $137 million of impaired loans at EFS, GECAS, and Other, respectively, at December 31, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under FASB ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans which
are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
14
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
EFS
GECAS
Other
0.4 %
0.5
5.1
118.2 %
30.9
56.9
0.4 %
0.1
2.9
26.7 %
22.6
60.6
25.7 %
23.4
62.1
0.6 %
0.1
3.1
0.6 %
0.1
3.6
(0.1) %
4.8
(0.1) %
3.3
(0.4) %
0.1
2.0
0.9 %
5.7
December 31,
2010
22.2 %
75.0
55.6
35.5 %
56.9
December 31,
2010
0.5 %
0.1
3.4
Write-offs (net) as a percent of financing receivables (c)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
EFS
GECAS
Other
2.4 %
0.1
6.0
Allowance for losses as a percent of total financing receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
EFS
GECAS
Other
2.2 %
0.5
5.7
Allowance for losses as a percent of nonearning receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
EFS
GECAS
Other
2.3 %
0.5
5.1
December 31,
2010
0.3 %
0.2
3.2
December 31,
2010
0.2 %
1.9
4.0 %
NM
1.2
(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. The method for calculating the best estimate of losses depends on the size, type and risk characteri
the related financing receivable. Such an 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 delinquen
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. The underlying assumptions, estimates and assessments we use to provide for lo
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. Our risk management
includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, or on a portfolio basis, as appropriate.
(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 - Portfolio overview
(In millions, unless otherwise noted)
Balances
December 31,
2011
Real Estate
Debt (b)
Business Properties
Total
$
$
September 30,
2011
24,501
8,248
32,749
$
$
December 31,
2011
Real Estate
Debt
Business Properties
Total
$
September 30,
2011
541
249
790
$
$
$
$
September 30,
2011
949
140
1,089
$
$
$
978
163
1,141
$
$
$
27,750
9,057
36,807
March 31,
2011
$
$
Nonearning receivables (c)
June 30,
2011
$
$
680
323
1,003
$
1,092
184
1,276
105
35
140
$
$
151
36
187
$
$
91
27
118
29,474
9,548
39,022
$
$
$
$
$
March 31,
2011
$
$
$
961
386
1,347
December 31,
2010
1,118
181
1,299
$
30,249
9,962
40,211
December 31,
2010
769
368
1,137
$
Allowance for losses (d)
June 30,
2011
$
December 31,
2010
March 31,
2011
Write-offs (net) - for three months ending
September 30,
June 30,
2011
2011
December 31,
2011
Real Estate
Debt
Business Properties
Total
714
314
1,028
$
December 31,
2011
Real Estate
Debt
Business Properties
Total
25,748
8,630
34,378
Financing receivables (a)
June 30,
2011
$
$
March 31,
2011
1,292
196
1,488
December 31,
2010
240
40
280
$
$
332
33
365
(a) Financing receivables include $8,747 million of impaired loans at Real Estate at December 31, 2011.
(b) Financing receivables include $63 million of construction loans at December 31, 2011.
(c) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under FASB ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans which
are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(d) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
16
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Real Estate
Debt
Business Properties
Total
2.2 %
3.0
2.4
175.4 %
56.2
137.8
160.6 %
57.0
127.2
3.8 %
1.9
3.3
1.7 %
1.7
1.7
145.4 %
49.2
114.2
3.9 %
2.0
3.5
December 31,
2011
2.76 %
2.3 %
1.6
2.1
September 30,
2011
4.18 %
4.12 %
134.4 %
50.8
110.5
December 31,
2010
3.8 %
1.9
3.3
4.3 %
2.0
3.7
December 31,
2010
3.2 %
1.6
2.8
1.3 %
1.2
1.2
Real Estate
June 30,
2011
3.2 %
3.9
3.3
December 31,
2010
Write-offs (net) as a percent of financing receivables (c)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Delinquency
137.0 %
51.9
111.0
3.9 %
1.7
3.3
Real Estate
Debt
Business Properties
Total
2.6 %
3.9
2.9
Allowance for losses as a percent of total financing receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Real Estate
Debt
Business Properties
Total
2.5 %
3.6
2.7
Allowance for losses as a percent of nonearning receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Real Estate
Debt
Business Properties
Total
2.8 %
3.6
3.0
December 31,
2010
March 31,
2011
4.3 %
1.3
3.5
December 31,
2010
4.08 %
4.41 %
(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. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
(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 - Consumer portfolio overview
(In millions, unless otherwise noted)
Balances
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
$
$
September 30,
2011
36,170
18,544
46,689
5,691
7,244
114,338
$
$
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
$
$
September 30,
2011
3,349
263
990
43
419
5,064
$
$
$
September 30,
2011
706
717
2,008
101
199
3,731
$
$
$
779
816
1,953
123
211
3,882
$
$
$
40,731
21,047
42,178
7,141
8,528
119,625
March 31,
2011
$
$
Nonearning receivables (b)
June 30,
2011
$
$
3,804
308
790
39
490
5,431
$
790
934
1,846
143
218
3,931
140
130
601
15
33
919
$
$
67
172
537
15
45
836
$
$
64
196
652
27
43
982
40,421
20,235
41,282
7,295
8,231
117,464
$
$
$
$
$
March 31,
2011
$
$
$
3,738
289
1,201
46
478
5,752
December 31,
2010
813
930
2,141
152
239
4,275
$
40,011
20,132
43,974
7,558
8,304
119,979
December 31,
2010
3,843
295
1,004
41
461
5,644
$
Allowance for losses (c)
June 30,
2011
$
December 31,
2010
March 31,
2011
Write-offs (net) - for three months ending
September 30,
June 30,
2011
2011
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
3,619
299
882
35
441
5,276
$
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
38,708
19,801
43,249
6,462
8,017
116,237
Financing receivables (a)
June 30,
2011
$
$
March 31,
2011
803
937
2,333
168
259
4,500
December 31,
2010
55
182
777
36
61
1,111
$
$
112
251
891
13
70
1,337
(a) Financing receivables include impaired loans of $3,105 million at December 31, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
18
GE Capital - Consumer portfolio overview
Nonearning receivables as a percent of financing receivables (a)
September 30,
June 30,
March 31,
2011
2011
2011
Ratios
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
9.3
1.4
2.1
0.8
5.8
4.4
%
21.1
272.6
202.8
234.9
47.5
73.7
%
2.0
3.9
4.3
1.8
2.7
3.3
%
9.5
1.5
2.4
0.6
5.6
4.8
%
%
20.8
303.2
233.7
366.7
44.5
72.4
%
2.0
4.1
4.5
1.9
2.6
3.3
%
1.9
4.4
4.4
2.0
2.6
3.3
21.2
315.3
213.2
370.7
51.8
75.7
%
1.5
2.7
5.3
1.0
1.7
3.2
%
0.7
3.4
5.0
0.9
2.2
2.8
%
September 30,
2011
7.30 %
7.59 %
0.6
3.8
6.2
1.5
2.1
3.3
%
Consumer
June 30,
2011
%
2.0 %
4.7
5.3
2.2
3.1
3.8
December 31,
2010
0.5
3.6
7.3
1.9
3.0
3.7
%
March 31,
2011
7.59 %
21.5 %
324.2
194.3
365.2
54.2
78.2
December 31,
2010
2.0
4.6
5.2
2.1
2.9
3.6
%
9.3 %
1.4
2.7
0.6
5.8
4.8
December 31,
2010
Write-offs (net) as a percent of financing receivables (c)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Delinquency
21.5
272.9
221.4
351.4
47.8
73.6
%
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
9.3
1.5
1.9
0.5
5.7
4.5
Allowance for losses as a percent of total financing receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
%
Allowance for losses as a percent of nonearning receivables (b)
September 30,
June 30,
March 31,
2011
2011
2011
December 31,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
9.3
1.5
2.0
0.5
5.5
4.5
December 31,
2010
1.1 %
4.9
8.5
0.7
3.3
4.5
December 31,
2010
7.89 %
8.09 %
(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 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. The method for calculating the best estimate of losses depends on the size, type and risk characteristics of
the related financing receivable. Such an 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. The underlying assumptions, estimates and assessments we use to provide for losses
are updated periodically to reflect our view of current conditions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible to experience credit losses that are different from our current estimates. 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, or on a portfolio basis, as appropriate.
(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.
19
GE Capital - Nonearning and nonaccrual financing receivables
($ millions)
December 31, 2011
Commercial
CLL
EFS
GECAS
Other
Total Commercial
Nonearning
financing
receivables (a)
Nonaccrual
financing
receivables (b)
$
$
Real Estate
Consumer
Total
$
3,309
22
55
65
3,451
4,512
22
69
115
4,718
790
6,949
5,064
5,316
9,305
$
16,983
(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 $17.0 billion includes $9.3 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.
20
GE Capital - Consumer allowance for losses on financing receivables
(In millions)
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
(In millions)
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
Provision
charged to
operations (a)
Balance
January 1,
2011
Balance
December 31,
2009
Other (b)
Gross writeoffs (d)
Recoveries (d)
Balance
December 31,
2011
$
803
937
2,333
168
259
$
249
490
2,241
30
142
$
(20)
(30)
1
(4)
(20)
$
(381)
(1,257)
(3,095)
(216)
(272)
$
55
577
528
123
90
$
706
717
2,008
101
199
$
4,500
$
3,152
$
(73)
$
(5,221)
$
1,373
$
3,731
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (c)
Other (b)
Gross writeoffs (d)
Recoveries (d)
Balance
December 31,
2010
$
892
1,106
1,551
292
292
$
1,602
-
$
892
1,106
3,153
292
292
$
256
1,047
3,018
91
265
$
(41)
(68)
(6)
(61)
5
$
(381)
(1,733)
(4,300)
(313)
(394)
$
77
585
468
159
91
$
803
937
2,333
168
259
$
4,133
$
1,602
$
5,735
$
4,677
$
(171)
$
(7,121)
$
1,380
$
4,500
(a) On July 1, 2011, we adopted ASU 2011-02, an amendment to ASC 310, Receivables, which resulted in an increase of $77 million to our allowance for losses.
(b) Other primarily included the effects of currency exchange.
(c) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
(d) 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.
21
GE Capital - Consumer financing receivables by region
(In millions)
December 31, 2011
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at December 31, 2011
$
-
$
28,159
7,497
205
309
June 30, 2011
36,170
$
Total at June 30, 2011
$
-
$
December 31, 2010
$
$
Total at December 31, 2010
$
-
$
$
42,178
63,225
$
43,974
5,691
$
64,106
$
$
7,141
$
-
$
$
889
$
8,528
43,067
46,324
20,461
9,103
247
423
$
119,625
September 30, 2011
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at September 30, 2011
$
-
$
29,721
8,363
225
34
365
March 31, 2011
38,708
$
Total at March 31, 2011
$
-
$
63,050
$
41,282
$
61,517
$
6,462
$
-
$
$
8,017
7,295
$
116,237
Total
849
$
2,736
4,432
214
$
44,134
43,888
19,130
8,509
205
371
Other (a)
4,645
1,328
1,320
2
$
Total
885
2,542
4,418
172
-
Auto
$
7,665
5,564
6,782
206
18
$
Other (a)
4,187
1,195
1,079
1
Installment and
revolving credit
31,313
8,373
234
74
427
40,421
Auto
$
7,438
5,154
7,033
171
5
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
43,249
8,231
42,131
46,359
19,697
8,550
280
447
$
117,464
Total
877
$
2,853
4,321
253
$
114,338
Total
Other (a)
7,558
47,527
40,879
17,289
8,179
152
312
2,755
4,677
207
-
4,700
1,341
1,516
1
$
7,244
$
Auto
$
838
Other (a)
-
$
Total
2,111
4,137
155
3
-
4,547
1,326
1,267
1
7,533
5,479
6,868
221
31
$
$
Auto
Installment and
revolving credit
31,100
8,108
249
105
449
40,011
-
7,782
5,675
7,384
196
10
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
65,233
Other (a)
3,759
997
935
-
Installment and
revolving credit
31,240
8,783
245
51
412
40,731
$
6,850
4,658
6,884
149
3
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
46,689
Auto
8,304
44,851
46,186
19,249
8,886
326
481
$
119,979
(a) Represents mainly small and medium enterprise loans.
22
GE Capital - Consumer mortgage portfolio by country (a)
(In millions)
Financing
receivables
December 31, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
September 30, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K. (b) (d)
France (d)
Poland
Czech Republic
Hungary
Spain
All other
$
16,898
8,520
5,396
1,095
883
920
2,458
46.7 %
23.6
14.9
3.0
2.4
2.5
6.8
12.5 %
3.4
1.2
2.1
13.5
17.1
24.3
20.0 %
3.6
2.5
3.0
18.4
27.3
23.6
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
17,607
9,101
5,895
1,228
1,109
1,003
2,765
45.5 %
23.5
15.2
3.2
2.9
2.6
7.1
13.0 %
3.2
1.1
2.0
12.1
17.3
22.5
20.9 %
3.5
2.7
2.7
16.1
27.8
22.3
Total at December 31, 2011 (c)
$
36,170
100.0 %
9.3 %
13.4 %
Total at September 30, 2011 (c)
$
38,708
100.0 %
9.3 %
13.6 %
Financing
receivables
June 30, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
March 31, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,452
9,581
6,189
1,295
1,160
1,059
2,995
45.3 %
23.5
15.2
3.2
2.8
2.6
7.4
13.2 %
3.2
1.1
2.0
10.8
16.8
21.7
21.3 %
3.6
2.2
2.7
15.0
25.6
21.6
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,574
9,497
5,854
1,257
1,091
1,061
3,087
46.0 %
23.5
14.5
3.1
2.7
2.6
7.6
13.7 %
3.1
1.0
1.9
10.0
17.3
20.3
20.3 %
3.6
2.1
2.7
14.8
28.1
19.7
Total at June 30, 2011 (c)
$
40,731
100.0 %
9.3 %
13.6 %
Total at March 31, 2011
$
40,421
100.0 %
9.5 %
13.2 %
Financing
receivables
December 31, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,487
9,379
5,694
1,186
1,054
1,047
3,164
46.2 %
23.4
14.2
3.0
2.6
2.6
8.0
13.7 %
2.9
0.9
1.6
9.2
15.0
19.1
21.7 %
3.6
2.0
2.5
14.4
25.5
18.3
Total at December 31, 2010
$
40,011
100.0 %
9.3 %
13.7 %
(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 December 31, 2011, we had in repossession stock 461 houses in the U.K., which had a value of approximately $0.1 billion.
(c) At December 31, 2011, net of credit insurance, approximately 25% 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. 79% of these loans are in our U.K. and France portfolios, which comprise mainly loans with
interest-only payments and introductory below market rates, have a delinquency rate of 15% and have a loan-to-value ratio at origination of 76%. At December 31, 2011, 6% (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 56%, respectively.
23
GE Capital - Commercial allowance for losses on financing receivables (a)
Provision
charged to
operations
Balance
January 1,
2011
(In millions)
CLL
Americas
Europe
Asia
Other
$
1,288
429
222
6
$
Gross
write-offs (d)
Other (b)
281
195
105
3
$
(96)
(5)
13
(3)
$
(700)
(286)
(214)
(2)
Balance
December 31,
2011
Recoveries
(d)
$
116
67
31
-
$
889
400
157
4
EFS
22
-
(1)
(4)
9
26
GECAS
20
-
-
(3)
-
17
Other
58
-
(47)
3
37
Total Commercial
(In millions)
CLL
Americas
Europe
Asia
Other
$
Balance
December 31,
2009
$
EFS
1,180
575
244
10
$
66
(10)
-
$
607
$
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (c)
$
2,045
23
1,246
575
234
10
$
(92)
$
(1,256)
Gross
write-offs (d)
Other (b)
1,059
269
153
(2)
$
(11)
(37)
(6)
(1)
$
(1,136)
(440)
(181)
(1)
$
226
1,530
Balance
December 31,
2010
Recoveries
(d)
$
$
130
62
22
-
$
1,288
429
222
6
28
-
28
65
-
(72)
1
22
GECAS
104
-
104
12
-
(96)
-
20
Other
34
-
34
33
-
(9)
-
58
Total Commercial
$
2,175
$
56
$
2,231
$
1,589
$
(55)
$
(1,935)
$
215
$
2,045
(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) Other primarily included transfers to held for sale and the effects of currency exchange.
(c) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
(d) 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.
24
GE Capital - Real Estate allowance for losses on financing receivables
Provision
charged to
operations
Balance
January 1,
2011
(In millions)
Real Estate
Debt
Business Properties
$
Total Real Estate
$
1,292
196
$
1,488
$
Other (a)
242
82
$
324
$
Recoveries
Balance
December 31,
2011
2
$
(603)
(144)
$
16
6
$
949
140
2
$
(747)
$
22
$
1,089
-
Provision
charged to
operations
Balance
January 1,
2010
Gross
write-offs
Balance
December 31,
2010
Balance
December 31,
2009
Adoption of ASU 200916 & 17 (b)
Real Estate
Debt
Business Properties
$
1,358
136
$
(3)
45
$
1,355
181
$
764
146
$
10
(8)
$
(838)
(126)
$
1
3
$
1,292
196
Total Real Estate
$
1,494
$
42
$
1,536
$
910
$
2
$
(964)
$
4
$
1,488
(In millions)
Gross
write-offs
Other (a)
Recoveries
(a) Other primarily included the effects of currency exchange.
(b) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
25
GE Capital - Real Estate debt overview
(In millions)
December 31,
2011
Region
September 30,
2011
Financing receivables
June 30,
2011
March 31,
2011
December 31,
2010
U.S.
Europe
Pacific Basin
Americas
$
20,622
4,073
2,686
5,368
$
21,335
4,392
2,953
5,698
$
22,724
4,543
2,992
6,548
$
24,778
4,468
3,032
6,744
$
25,989
4,515
2,991
6,716
Total (a)
$
32,749
$
34,378
$
36,807
$
39,022
$
40,211
December 31,
2011
Property type
September 30,
2011
Financing receivables
June 30,
2011
March 31,
2011
December 31,
2010
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
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
$
9,210
9,548
5,825
4,351
3,435
3,581
1,110
123
1,839
$
9,354
9,962
6,151
4,404
3,480
3,650
1,159
122
1,929
Total (a)
$
32,749
$
34,378
$
36,807
$
39,022
$
40,211
December 31,
2011
Vintage profile
Originated in
pre-2008
2008
2009
2010
2011
Total
Contractual
maturities
$
19,189
10,854
59
537
2,110
Due in
2011 and prior (b)
2012
2013
2014
2015 and later
$
32,749
Total
December 31,
2011
$
608
10,195
4,389
4,944
12,613
$
32,749
(a) Represents total gross financing receivables for Real Estate only.
(b) Includes $545 million relating to loans with contractual maturities prior to December 31, 2011.
26
GE Capital - Real Estate equity overview (a)
(In millions, unless otherwise noted)
December 31,
2011
Region
Equity
June 30,
2011
September 30,
2011
March 31,
2011
December 31,
2010
U.S.
Europe
Pacific Basin
Americas
$
7,268
7,553
6,955
2,635
$
7,889
8,590
7,193
2,756
$
8,120
9,236
7,197
2,865
$
9,138
9,277
7,131
2,940
$
9,041
9,750
7,155
2,923
Total
$
24,411
$
26,428
$
27,418
$
28,486
$
28,869
December 31,
2011
Property type
Equity
June 30,
2011
September 30,
2011
March 31,
2011
December 31,
2010
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
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
$
14,811
4,259
3,409
2,308
1,170
811
605
402
711
$
14,537
4,359
3,465
2,859
1,126
814
695
338
676
Total
$
24,411
$
26,428
$
27,418
$
28,486
$
28,869
December 31,
2011
Key metrics
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
End of period vacancies (d)
Foreclosed properties (f)
Total
$
1,238
$
5.7 %
18.9 %
$
692
22,753
June 30,
2011
$
23,665
1,351
$
5.8 %
19.5 %
$
745
March 31,
2011
$
1,425
$
6.0 %
20.2 %
$
606
December 31,
2010
24,616
$
1,382
$
5.5 %
20.6 %
$
601
25,187
1,453
5.7 %
20.0 %
$
629
December 31,
2011
Vintage profile (e)
Originated in
pre-2008
2008
2009
2010
2011
21,007
September 30,
2011
$
21,755
1,653
67
191
745
$
24,411
(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.
27
GE Capital - Equipment leased to others (ELTO), net of depreciation and amortization overview
(In millions)
December 31, 2011
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
$
Total at December 31, 2011
$
June 30, 2011
Collateral type
GECAS
3,125
8,769
2,853
1,669
1,492
$
17,908
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
$
Total at June 30, 2011
$
December 31, 2010
Collateral type
$
Total at December 31, 2010
$
31,146
-
$
31,146
$
GECAS
3,003
9,324
2,932
1,687
3,270
$
20,216
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
EFS
$
32,885
$
GECAS
3,130
9,072
2,960
1,452
2,851
$
19,465
$
857
$
857
$
EFS
32,885
-
$
31,535
$
-
$
3
1
5
9
$
877
$
877
$
-
$
5
2
6
13
$
$
1,089
$
-
$
49,920
Total at September 30, 2011
$
March 31, 2011
Collateral type
GECAS
3,083
8,970
2,892
1,674
1,415
$
18,034
$
CLL
35,888
9,329
2,932
1,689
4,153
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
$
53,991
Total at March 31, 2011
$
$
34,665
9,077
2,960
1,454
3,947
$
52,103
5
2
7
14
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
All other
EFS
31,846
-
$
31,846
$
GECAS
3,141
9,246
2,917
1,434
3,153
$
19,891
$
Consumer
867
$
867
$
$
32,144
$
Total
$
34,929
8,973
2,892
1,676
2,288
$
50,758
3
2
6
EFS
32,144
-
-
11
Consumer
886
$
886
$
-
Total
$
35,285
9,251
2,917
1,436
4,045
$
52,934
5
2
6
13
Total
Consumer
1,089
September 30, 2011
Collateral type
34,271
8,772
2,853
1,670
2,354
Total
Consumer
EFS
31,535
-
Total
Consumer
28
GE Capital - Commercial aircraft asset details
Collateral type (In millions)
December 31,
2011
September 30,
2011
Loans and leases
June 30,
2011
March 31,
2011
December 31,
2010
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
24,878
7,388
3,691
4,934
2,044
$
23,848
8,830
3,656
5,025
2,209
$
25,565
8,725
3,228
5,102
2,093
$
24,959
8,399
3,287
5,166
2,317
$
24,750
8,233
3,405
5,260
2,380
Total (a)
$
42,935
$
43,568
$
44,713
$
44,128
$
44,028
Airline regions (In millions)
December 31,
2011
September 30,
2011
Loans and leases
June 30,
2011
March 31,
2011
December 31,
2010
U.S.
Europe
Pacific Basin
Americas
Other
$
11,313
10,303
9,009
5,536
6,774
$
12,684
10,075
8,723
5,499
6,587
$
13,580
10,010
8,938
5,655
6,530
$
14,573
9,484
8,278
5,507
6,286
$
15,123
9,258
8,113
5,313
6,221
Total (a)
$
42,935
$
43,568
$
44,713
$
44,128
$
44,028
Aircraft vintage profile (In millions)
December 31,
2011
0-5 years
6-10 years
11 - 15 years
15+ years
$
18,303
13,933
5,198
3,457
Total (b)
$
40,891
(a) Includes loans and financing leases of $11,901 million, $11,841 million, $11,952 million, $12,104 million, and $12,615 million (less non-aircraft loans and financing leases of $112 million, $119 million, $124 million,
$120 million, and $122 million) and ELTO of $31,146 million, $31,846 million, $32,885 million, $32,144 million, and $31,535 million, at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011,
and December 31, 2010 respectively, related to commercial aircraft at GECAS.
(b) Excludes aircraft engine loans and leases of $2,044 million at December 31, 2011.
29
GE Capital other key areas
30
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 December 31, 2011
Gross
Gross
unrealized
unrealized
gains
losses
Amortized
cost
$
2,749
655
1,710
1,426
4,985
1,216
2,016
3,262
$
63
18
27
31
26
33
2
12
$
Estimated
fair value
(279)
(141)
(266)
(194)
(163)
(184)
(86)
-
Retained interests
25
10
-
Equity
Available-for-sale
Trading
605
241
58
-
(36)
-
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
$
280
$
(1,349)
$
Amortized
cost
2,533
532
1,471
1,263
4,848
1,065
1,932
3,274
$
$
Equity
$
545
70
176
23
100
87
896
502
$
(190)
(1)
(3)
(7)
(15)
(5)
-
-
-
427
(36)
2,826
$
(257)
$
382
256
752
1,242
846
571
202
-
$
-
$
4,251
169
4
14
7
39
8
3
$
(14)
(232)
(355)
(183)
(190)
(111)
(58)
(5)
$
3,227
690
1,758
1,436
3,059
1,406
1,754
3,079
10
(26)
39
627
241
902
417
194
-
(9)
-
1,087
417
17,821
$
18,687
$
448
$
(1,183)
$
17,952
At December 31, 2010 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
(89)
(140)
(263)
(194)
(156)
(169)
(81)
-
$
$
$
55
-
3,072
918
2,099
1,619
3,242
1,478
1,804
3,081
Estimated
fair value
35
At December 31, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
Retained interests
Total
18,890
$
At December 31, 2010
Gross
Gross
unrealized
unrealized
gains
losses
(1,092)
$
357
137
166
779
111
123
642
1,613
$
(5)
(16)
(3)
(103)
(5)
(2)
(6)
(5)
$
337
443
920
652
902
673
105
-
$
(9)
(216)
(352)
(80)
(185)
(109)
(52)
-
-
-
34
(26)
46
(9)
-
-
3,974
$
(154)
$
4,066
$
(1,029)
(a) Substantially collateralized by U.S. mortgages.
31
GE Capital - Investments measured at fair value in earnings (a)
Asset balances at
December 31,
2011
Investment type (In millions)
Equities - trading
$
Assets held for sale (LOCOM)
241
Net earnings impact for
twelve months ending
December 31, 2011
December 31,
2010
$
417
$
(29)
4,525
3,538
(51)
Assets of businesses held for sale (LOCOM)
711
3,127
(1)
Other (Investment companies and loans)
388
390
4
Total
$
5,865
$
7,472
$
(77)
(a) Excludes derivatives portfolio.
32
GE Capital - Ending Net Investment (ENI)
December 31,
2011
(In billions)
GECC total assets
$
Less: assets of discontinued operations
Less: non-interest bearing liabilities
GE Capital ENI
$
Less: cash and equivalents
GE Capital ENI, excluding cash and equivalents
553.7
September 30,
2011
$
$
March 31,
2011
577.1
$
569.8
December 31,
2010
$
577.7
(1.1)
(1.5)
(6.4)
(10.1)
(12.4)
(32.3)
(36.7)
(36.1)
(36.6)
(35.3)
520.3
$
(75.7)
$
572.7
June 30,
2011
444.6
534.5
$
(82.4)
$
452.1
534.6
$
(77.3)
$
457.3
523.1
$
(66.5)
$
456.6
530.0
(59.5)
$
470.5
33
GECC - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
December 31,
2011
$
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
438.2
80.0
September 30,
2011
$
453.2
79.1
5.5:1
$
438.2
(7.7)
(76.0)
354.5
June 30,
2011
$
458.1
78.8
5.7:1
$
453.2
(7.7)
(82.7)
362.8
March 31,
2011
$
5.8:1
$
458.1
(7.7)
(77.4)
373.0
December 31,
2010
452.8
76.1
$
5.9:1
$
452.8
(7.7)
(66.6)
378.5
465.4
72.9
6.4:1
$
465.4
(7.7)
(59.7)
398.0
Equity (b)
Add: hybrid debt
Adjusted equity
80.0
7.7
87.7
79.1
7.7
86.8
78.8
7.7
86.5
76.1
7.7
83.8
72.9
7.7
80.6
Adjusted leverage ratio
4.0:1
4.2:1
4.3:1
4.5:1
4.9:1
Tangible common equity to tangible assets ratio
(In billions)
December 31,
2011
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
80.0
(28.8)
$
79.1
(29.4)
$
78.8
(30.0)
$
76.1
(29.6)
$
72.9
(29.5)
Tangible common equity
$
51.2
$
49.7
$
48.8
$
46.5
$
43.4
Total assets
Less: Goodwill and other intangibles
$
553.7
(28.8)
$
572.7
(29.4)
$
577.1
(30.0)
$
569.8
(29.6)
$
581.1
(29.5)
Tangible assets
$
524.9
$
543.3
$
547.1
$
540.2
$
551.6
Tangible common equity to tangible assets
Tier 1 common ratio (c)
9.8 %
9.1 %
8.9 %
8.6 %
7.9 %
11.4 %
11.0 %
10.4 %
9.8 %
8.9 %
(a) Includes discontinued operations.
(b) Equity represents amounts available to GECC shareholders, excluding noncontrolling interests.
(c) Based on Basel One RWA estimates.
34
GECS supplemental information
35
GECS - Investment securities
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
At December 31, 2011
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
$
20,715
3,027
2,711
2,913
5,102
2,447
2,488
3,974
$
3,428
350
184
162
32
130
129
84
$
Estimated
fair value
(410)
(143)
(286)
(247)
(164)
(207)
(86)
-
Retained interests
25
10
-
Equity
Available-for-sale
Trading
713
241
75
-
(38)
-
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
$
4,584
$
(1,581)
$
Amortized
cost
23,733
3,234
2,609
2,828
4,970
2,370
2,531
4,058
$
$
Equity
$
1,435
87
219
244
100
330
906
502
$
(241)
(1)
(9)
(23)
(7)
(28)
(5)
-
-
-
440
(38)
4,263
$
(352)
$
836
307
825
1,320
850
607
203
-
$
-
$
4,948
1,576
45
95
145
16
116
82
57
$
(237)
(282)
(378)
(230)
(193)
(132)
(58)
(47)
$
22,154
2,724
2,809
2,924
3,230
2,867
2,266
3,786
10
(26)
39
750
241
500
417
213
-
(8)
-
705
417
47,359
$
43,157
$
2,355
$
(1,591)
$
43,921
At December 31, 2010 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
(169)
(142)
(277)
(224)
(157)
(179)
(81)
-
$
$
$
55
-
20,815
2,961
3,092
3,009
3,407
2,883
2,242
3,776
Estimated
fair value
35
At December 31, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
Retained interests
Total
44,356
$
At December 31, 2010
Gross
Gross
unrealized
unrealized
losses
gains
(1,229)
$
2,375
949
188
831
113
448
661
1,822
$
(81)
(43)
(4)
(104)
(5)
(12)
(6)
(47)
$
1,519
570
1,024
817
910
804
107
-
$
(156)
(239)
(374)
(126)
(188)
(120)
(52)
-
-
-
34
(26)
49
(8)
-
-
7,436
$
(310)
$
5,785
$
(1,281)
(a) Substantially collateralized by U.S. mortgages.
36
GECS - Funding
December 31,
2011
September 30,
2011
Commercial paper
Long-term debt (a)
Deposits / CD's
Alternate funding / other
Non-recourse borrowings of consolidated securitization entities
$
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
$
40.6
324.1
39.4
24.7
29.3
$
42.0
336.0
37.3
25.2
30.0
Total debt
$
443.1
$
456.8
$
463.2
$
458.1
$
470.5
$
52.4
$
53.6
$
53.7
$
53.0
$
51.8
(In billions)
June 30,
2011
March 31,
2011
December 31,
2010
Metrics
Bank lines
Commercial paper coverage (b):
Bank lines
Bank lines and cash and equivalents
119 %
292 %
132 %
336 %
132 %
323 %
130 %
296 %
123 %
267 %
Cash and equivalents
$
76.7
$
83.3
$
78.0
$
67.3
$
60.3
LT debt < 1 year
$
82.7
$
76.4
$
72.9
$
59.2
$
65.6
(a) Includes $35 billion, $45 billion, $45 billion, $45 billion, and $53 billion of long term debt issued under the TLGP program at December 31, 2011, September 30, 2011, June 30, 2011,
March 31, 2011, and December 31, 2010, respectively.
(b) Commercial paper coverage represents bank lines, both excluding and including cash and equivalents, as a percentage of the commercial paper balance as of the end of the relevant period.
37
GECS - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
December 31,
2011
$
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
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
March 31,
2011
$
6.2:1
$
463.2
(7.7)
(78.1)
377.4
December 31,
2010
458.1
72.1
$
6.4:1
$
458.1
(7.7)
(67.4)
383.0
470.6
69.0
6.8:1
$
470.6
(7.7)
(60.4)
402.5
Equity (b)
Add: hybrid debt
Adjusted equity
77.1
7.7
84.8
76.0
7.7
83.7
75.1
7.7
82.8
72.1
7.7
79.8
69.0
7.7
76.7
Adjusted leverage ratio
4.2:1
4.4:1
4.6:1
4.8:1
5.2:1
Tangible common equity to tangible assets ratio
(In billions)
December 31,
2011
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
77.1
(28.8)
$
76.0
(29.4)
$
75.1
(30.0)
$
72.1
(29.6)
$
69.0
(29.5)
Tangible common equity
$
48.3
$
46.6
$
45.1
$
42.5
$
39.5
Total assets
Less: Goodwill and other intangibles
$
584.5
(28.8)
$
603.1
(29.4)
$
605.6
(30.0)
$
597.7
(29.6)
$
608.7
(29.5)
Tangible assets
$
555.7
$
573.7
$
575.6
$
568.1
$
579.2
Tangible common equity to tangible assets
8.7 %
8.1 %
7.8 %
7.5 %
6.8 %
Tier 1 common ratio (c)
9.9 %
9.6 %
9.1 %
8.6 %
7.8 %
(a) Includes discontinued operations.
(b) Equity represents amounts available to GECS shareholders, excluding noncontrolling interests.
(c) Based on Basel One RWA estimates.
38
GECC/GECS Merger
(In millions, unless otherwise noted)
For twelve months ending December 31, 2011
GECS as
GECC as
GECC postreported
reported (a)
merger (a)
Revenues
$
45,730
$
49,081
$
49,081
Earnings from continuing operations
6,676
6,559
6,559
Net earnings attributable to GECC/GECS
6,566
6,510
6,510
GECC as
reported (a)
Total assets
Total liabilities
Total equity
ENI (ex-cash) (in billions)
$
553,662
At December 31, 2011
GECS as
reported
$
584,536
GECC postmerger (a)
$
584,536
472,927
506,736
506,736
80,735
77,800
77,800
444.3
444.8
444.8
(a) The difference between GECC as reported and GECC post-merger mainly represents our run-off insurance operations and obligations to be assumed
by GECC as a result of the merger and includes $300 million aggregate principal amount of GECS' 7.5% Guaranteed Subordinated Notes
due August 21, 2035 and outstanding GECS' commercial paper.
39
Appendix
40
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 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.
41
Glossary
Term
Definition
Intangible asset
A non-financial asset lacking physical substance, such as goodwill, patents, licenses, trademarks and customer relationships.
Interest rate swap
Agreement under which two counterparties agree to exchange one type of interest rate cash flow for another. In a typical arrangement, one
party periodically will pay a fixed amount of interest, in exchange for which that party will receive variable payments computed using a
published index. See "Hedge."
Investment securities
Generally, an instrument that provides an ownership position in a corporation (a stock), a creditor relationship with a corporation or
governmental body (a bond), rights to contractual cash flows backed by pools of financial assets or rights to ownership such as those
represented by options, subscription rights and subscription warrants.
Net operating income
Represents operating income less operating expenses for owned real estate properties.
Other comprehensive income
Changes in assets and liabilities that do not result from transactions with share owners 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 cash flow
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 holda 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.
42
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