Download GE Capital Third Quarter 2011

GE Capital
Third 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.
Third quarter 2011 supplemental information
Table of Contents
1. GE Capital structure
Page #
1
2. Financial statements
a) GECC
3-4
b) GECS
5-6
c) GECC continuing operations (GE Capital)
7
3. GE Capital asset quality
a) Assets by region
9
b) Assets in selected emerging markets
10
c) Portfolio overview and ratios
11-18
d) Nonearning and nonaccrual financing receivables
19
e) Consumer allowance for losses on financing receivables
20
f) Consumer financing receivables by region
21
g) Consumer mortgage portfolio by country
22
h) Commercial allowance for losses on financing receivables
23
i) Real estate allowance for losses on financing receivables
24
j) Commercial real estate debt and equity overview
25-26
k) Equipment leased to others overview
27
l) Commercial aircraft asset details
28
4. GE Capital other key areas
a) Investment securities
30
b) Investments measured at fair value in earnings
31
c) Ending net investment
32
d) GECC ratios
33
5. GECS supplemental information
a) Investment securities
35
b) Funding
36
c) Ratios
37
6. Appendix
a) Glossary
39-40
GE Capital structure
General Electric Company
General Electric Capital Services,
Inc. (GECS)
General Electric Capital
Corporation (GECC)
GE Capital - operating segments
Consumer
-
Private label credit cards
Bank cards
Personal loans
Auto loans and leases
Mortgages & home equity loans
Debt consolidation
Deposit & other savings products
Small & medium enterprise lending
Commercial Lending and
Leasing (CLL)
- Mid-market loans and leases of equipment
and major capital assets
- Mid-market equity capital
Real Estate
- Equity capital for acquisition or
recapitalization of commercial real estate
- Fixed/floating rate mortgages for
commercial real estate
Energy Financial Services
(EFS)
- Structured debt, equity, leasing,
partnership financing and project
financing to global energy and water
industries
- Invests in operating assets in these
industries
GE Capital Aviation Services
(GECAS)
- Commercial aircraft leasing and financing
- Project financing for airport facilities
1
Financial statements
2
GECC - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
September 30,
2011
$
11,116
32
11,148
June 30,
2011
$
11,584
42
11,626
For three months ending
March 31,
2011
$
12,169
42
12,211
December 31,
2010
$
11,702
44
11,746
September 30,
2010
$
11,061
40
11,101
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
3,557
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
3,565
3,338
39
36
1,637
2,016
10,631
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
1,571
(66)
2,053
(378)
2,282
(446)
928
124
470
366
Earnings from continuing operations (a)
Earnings (loss) from discontinued operations, net of taxes
1,505
2
1,675
218
1,836
57
1,052
634
836
(1,051)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,507
38
1,893
20
1,893
31
1,686
25
(215)
18
Net earnings (loss) attributable to GECC
$
1,469
$
1,873
GECC - statement of changes in shareowner's equity
September 30,
2011
(In millions)
Changes in GECC shareowner's equity
Balance at beginning of period
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
$
(300)
(848)
(105)
28
(1,225)
1,469
244
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
78,844
(1)
June 30,
2011
$
79,087
76,143
-
$
78,844
$
For three months ending
March 31,
2011
$
38
985
(195)
828
1,873
2,701
$
1,862
72,881
-
76,143
$
December 31,
2010
$
(77)
1,542
(64)
(1)
1,400
1,862
3,262
$
1,661
70,493
79
September 30,
2010
$
202
172
271
3
648
1,661
2,309
$
72,881
(233)
69,823
(5)
163
1,037
(278)
(14)
908
(233)
675
$
70,493
(a) Effective January 1, 2010, GE Capital segment earnings are equal to the earnings from continuing operations for GECC.
3
GECC - Condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 30)
Inventories
Financing receivables - net (see pages 11 - 18)
Other receivables
Property, plant & equipment, less accumulated amortization
of $24,291, $24,961, $25,125, $25,390, and $25,879
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,
2011
$
82,391
17,362
44
293,737
13,211
June 30,
2011
$
March 31,
2011
77,258
18,372
52
300,749
13,657
$
55,307
28,173
1,843
74,410
895
6,407
52,309
27,726
1,702
79,743
3,050
1,461
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
13,674
September 30,
2010
$
53,747
27,508
1,874
79,045
3,127
12,375
63,612
17,962
62
314,573
12,610
53,415
27,246
2,093
82,077
786
21,725
$
572,736
$
577,123
$
569,822
$
581,140
$
596,161
$
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
20,287
6,109
592
2,181
$
110,488
8,081
30,434
36,375
297,369
6,663
20,481
4,900
446
9,305
Total liabilities
492,444
497,078
492,501
507,095
524,542
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
(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
(539)
(1,713)
(1,618)
(383)
28,421
46,269
Total GECC shareowner's equity
79,087
78,844
76,143
72,881
70,493
1,205
1,201
1,178
1,164
1,126
80,292
80,045
77,321
74,045
71,619
Noncontrolling interests
Total equity
Total liabilities and equity
$
572,736
$
577,123
$
569,822
$
581,140
$
596,161
4
GECS - Condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
September 30,
2011
$
Costs and expenses
Interest
Operating and administrative
Cost of goods sold
Investment contracts, insurance losses and insurance annuity benefits
Provision for losses on financing receivables (see pages 20, 23-24)
Depreciation and amortization
Total costs and expenses
11,986
32
12,018
June 30,
2011
$
12,401
42
12,443
For three months ending
March 31,
2011
$
12,999
42
13,041
December 31,
2010
$
12,618
44
12,662
September 30,
2010
$
11,914
40
11,954
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
3,573
3,479
39
796
1,637
2,018
11,542
Earnings from continuing operations before income taxes
Benefit (provision) for income taxes
1,548
(57)
1,957
(344)
2,227
(428)
896
136
412
386
Earnings from continuing operations
Earnings (loss) from discontinued operations, net of taxes
1,491
2
1,613
217
1,799
57
1,032
634
798
(1,052)
Net earnings (loss)
Less: Net earnings (loss) attributable to noncontrolling interests
1,493
38
1,830
20
1,856
31
1,666
25
(254)
18
Net earnings (loss) attributable to GECS
$
1,455
$
1,810
GECS - statement of changes in shareowner's equity
September 30,
2011
(In millions)
Changes in GECS shareowner's equity
Balance at beginning of period
Dividends and other transactions with shareowner
Other comprehensive income (loss) - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
$
$
248
(832)
(47)
28
(603)
1,455
852
Increase / (decrease) from net earnings attributable to the Company
Comprehensive income
Balance at end of period
75,108
(1)
June 30,
2011
$
75,959
72,104
-
$
75,108
$
For three months ending
March 31,
2011
$
391
993
(190)
1,194
1,810
3,004
$
1,825
68,984
1
72,104
$
December 31,
2010
$
(188)
1,553
(70)
(1)
1,294
1,825
3,119
$
1,641
66,854
80
September 30,
2010
$
(22)
180
248
3
409
1,641
2,050
$
68,984
(272)
67,267
(5)
(906)
1,045
(261)
(14)
(136)
(272)
(408)
$
66,854
5
GECS - Condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see page 35)
Inventories
Financing receivables - net (see pages 11 - 18)
Other receivables
Property, plant & equipment, less accumulated amortization
of $24,307, $24,977, $25,140, $25,404, and $25,895
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
September 30,
2011
$
83,278
46,442
44
293,737
13,689
June 30,
2011
$
March 31,
2011
77,983
45,331
52
300,749
14,263
$
55,326
28,173
1,851
74,598
895
6,413
52,328
27,726
1,710
79,542
3,050
1,516
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
14,304
September 30,
2010
$
53,768
27,508
1,883
79,240
3,127
12,375
64,269
45,130
62
314,573
13,146
53,435
27,246
2,102
82,312
786
21,725
$
603,062
$
605,634
$
597,673
$
608,683
$
624,786
$
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
20,982
6,990
592
2,423
$
115,521
8,189
30,434
36,375
297,437
31,688
21,414
5,752
446
9,550
Total liabilities
525,898
529,325
524,391
538,535
556,806
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
(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
(617)
(1,591)
(1,529)
(383)
27,573
43,390
Total GECS shareowner's equity
75,959
75,108
72,104
68,984
66,854
1,205
1,201
1,178
1,164
1,126
77,164
76,309
73,282
70,148
67,980
Noncontrolling interests
Total equity
Total liabilities and equity
$
603,062
$
605,634
$
597,673
$
608,683
$
624,786
6
GECC continuing operations (GE Capital)
September 30,
2011
(In millions)
Revenues
Less: Interest expense
Net revenues
$
11,148
(3,557)
7,591
For three months ending
March 31,
2011
June 30,
2011
$
11,626
(3,583)
8,043
$
12,211
(3,581)
8,630
December 31,
2010
$
11,746
(3,602)
8,144
September 30,
2010
$
11,101
(3,565)
7,536
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
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
2,572
2,016
841
5,429
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
2,591
(1,020)
2,864
(811)
3,439
(1,157)
2,280
(1,352)
2,107
(1,637)
Earnings before income taxes
Benefit (provision) for income taxes
1,571
(66)
2,053
(378)
2,282
(446)
928
124
470
366
Earnings from continuing operations before noncontrolling interests
Less: Net earnings (loss) attributable to noncontrolling interests
$
1,505
38
$
1,675
20
$
1,836
31
$
1,052
25
$
836
18
GE Capital segment profit
$
1,467
$
1,655
$
1,805
$
1,027
$
818
September 30,
2011
(In millions)
Segment profit
CLL
Consumer
Real Estate
EFS
GECAS
$
$
GECC corporate items and eliminations
GE Capital segment profit
$
For three months ending
March 31,
2011
June 30,
2011
688
737
(82)
79
208
1,630
(163)
$
1,467
$
$
701
1,020
(335)
139
321
1,846
(191)
$
1,655
$
$
December 31,
2010
554
1,219
(358)
112
306
1,833
(28)
$
1,805
$
$
September 30,
2010
567
546
(409)
33
432
1,169
(142)
$
1,027
$
$
443
773
(405)
55
158
1,024
(206)
818
7
GE Capital asset quality
8
GE Capital - Assets by region (a)
At
(In millions)
September 30,
2011
Property, plant and
equipment (net)
Financing
receivables (net)
141,055
$
U.S. (b)
Europe (c)
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other (d)
$
Total
$
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
$
568,765
Total at September 30, 2010
$
314,573
$
53,415
$
574,436
77,432
18,716
25,047
18,789
12,698
8,870
Total assets
$
5,097
237
2,753
1,304
34,048
307,647
$
104,516
26,666
47,997
31,788
52,661
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
Total assets
Total assets
Total assets
Total assets
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
296,366
$
108,728
30,215
47,174
32,738
53,544
$
568,765
299,546
110,563
31,000
47,049
32,848
53,430
$
574,436
(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 $11,300 million at September 30, 2011.
(d) Includes total assets of $48,613 million at GECAS, approximately $11,800 million of which relates to European airlines and other investments at September 30, 2011.
9
GE Capital - Assets in selected emerging markets
(In millions)
Selected emerging markets (a)
Eastern Europe
Poland
Czech Republic
Hungary
Turkey
Total Eastern Europe
September 30,
2011
Property, plant and
equipment (net)
Financing
receivables (net)
$
8,863
5,625
3,242
17,730
$
119
55
41
215
Total assets
$
12,376
7,305
4,497
403
24,581
$
At
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
Total assets
Total assets
Total assets
Total assets
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
$
13,058
7,304
4,115
3,077
27,554
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
1,184
57
1,241
14
14
1,682
1,636
3,318
1,808
1,618
3,426
1,789
1,636
3,425
1,777
1,621
3,398
1,771
1,554
3,325
Americas
Mexico
Total Americas
5,225
5,225
763
763
8,253
8,253
8,344
8,344
8,406
8,406
8,411
8,411
8,047
8,047
Total
$
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
Total at September 30, 2010
$
24,513
$
1,011
$
38,926
$
39,092
$
37,602
$
39,203
$
38,926
(a) We have disclosed here selected emerging markets where our total assets at December 31, 2010, exceed $1 billion. Assets of discontinued operations are excluded.
10
GE Capital - CLL portfolio overview (a) (b)
(In millions, unless otherwise noted)
Financing receivables (c)
March 31,
2011
Balances
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
81,072
37,130
11,914
469
130,585
June 30,
2011
$
$
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
$
$
1,967
1,086
230
16
3,299
$
$
$
995
403
150
5
1,553
$
$
$
153
70
40
263
1,124
433
180
6
1,743
$
June 30,
2011
$
$
$
84,825
37,093
11,545
619
134,082
$
$
$
$
2,397
1,209
346
6
3,958
$
$
1,254
443
228
6
1,931
September 30,
2010
88,558
37,498
11,943
664
138,663
$
$
December 31,
2010
$
$
Allowance for losses (e)
March 31,
2011
June 30,
2011
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
2,060
1,156
266
6
3,488
$
$
Nonearning receivables (d)
March 31,
2011
June 30,
2011
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
81,518
37,897
11,759
585
131,759
December 31,
2010
September 30,
2010
2,573
1,241
406
6
4,226
$
$
December 31,
2010
$
$
$
$
172
35
58
265
$
$
2,779
1,095
429
5
4,308
September 30,
2010
1,288
429
222
6
1,945
$
$
Write-offs (net) - for three months ending
March 31,
December 31,
2011
2010
139
64
71
274
91,735
36,969
12,192
685
141,581
1,357
411
252
7
2,027
September 30,
2010
314
71
56
1
442
$
$
189
47
18
254
(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 $5,443 million at September 30, 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. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments
about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected
future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate.
Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is
not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
11
GE Capital - CLL portfolio overview (a)
Ratios
Nonearning receivables as a percent of financing receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
2.4 %
2.9
1.9
3.4
2.5
50.6 %
37.1
65.2
31.3
47.1
52.3 %
36.6
65.9
100.0
48.8
1.4 %
1.1
1.5
1.0
1.3
0.8 %
0.7
1.4
0.8
50.1 %
34.6
54.7
100.0
46.0
1.5 %
1.2
2.0
1.0
1.4
September 30,
2011
0.7 %
0.7
2.4
0.8
1.99 %
1.94 %
September 30,
2010
1.5 %
1.1
2.1
1.0
1.4
September 30,
2010
1.4 %
0.8
1.9
0.6
1.3
December 31,
2010
2.03 %
48.8 %
37.5
58.7
140.0
47.1
1.5 %
1.1
1.9
0.9
1.4
0.8 %
0.4
2.0
NM
0.8
CLL
March 31,
2011
June 30,
2011
3.0 %
3.0
3.5
0.3
3.0
September 30,
2010
Write-offs as a percent of financing receivables (d)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Delinquency
54.6 %
37.5
67.7
100.0
50.0
1.2 %
1.1
1.3
1.1
1.2
CLL
Americas
Europe
Asia
Other
Total
2.9 %
3.3
3.4
0.3
3.0
Allowance for losses as a percent of total financing receivables (c)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
2.8 %
3.3
3.0
0.3
3.0
Allowance for losses as a percent of nonearning receivables (c)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
CLL
Americas
Europe
Asia
Other
Total
2.5 %
3.1
2.3
0.2
2.6
September 30,
2010
0.8 %
0.5
0.6
NM
0.7
September 30,
2010
2.14 %
2.40 %
(a) During the third quarter of 2011, we transferred our Railcar lending and leasing portfolio from CLL Other to CLL Americas. Prior-period amounts were reclassified to conform to the current-period presentation.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and 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.
12
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Balances
September 30,
2011
EFS
GECAS
Other
$
5,977
11,841
1,388
$
September 30,
2011
EFS
GECAS
Other
$
135
62
71
$
36
14
43
$
$
$
(1)
(1)
12
$
6,662
12,104
1,640
December 31,
2010
$
Nonearning receivables (b)
March 31,
2011
136
64
87
$
162
16
99
$
Allowance for losses (c)
March 31,
2011
June 30,
2011
35
15
54
$
36
12
55
7,011
12,615
1,788
September 30,
2010
$
December 31,
2010
62
102
$
December 31,
2010
$
22
20
58
$
(7)
3
8
$
4
8
$
71
6
7,291
12,227
2,087
September 30,
2010
163
90
September 30,
2010
$
Write-offs (net) - for three months ending
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
EFS
GECAS
Other
6,143
11,952
1,517
June 30,
2011
September 30,
2011
EFS
GECAS
Other
Financing receivables (a)
March 31,
2011
June 30,
2011
85
25
53
September 30,
2010
$
7
-
(a) Financing receivables include $135 million, $91 million, and $148 million of impaired loans at EFS, GECAS, and Other, respectively, at September 30, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under FASB ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans which
are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments
about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected
future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective
January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition.
This may result in lower reserve coverage ratios prospectively.
13
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
EFS
GECAS
Other
2.3 %
0.5
5.1
26.7 %
22.6
60.6
0.6 %
0.1
3.1
25.7 %
23.4
62.1
22.2 %
75.0
55.6
0.6 %
0.1
3.6
0.5 %
0.1
3.4
(0.1) %
3.3
(0.4) %
0.1
2.0
0.2 %
1.9
2.2 %
4.3
September 30,
2010
35.5 %
56.9
52.1 %
58.9
September 30,
2010
0.3 %
0.2
3.2
Write-offs (net) as a percent of financing receivables (c)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
EFS
GECAS
Other
0.9 %
5.7
Allowance for losses as a percent of total financing receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
EFS
GECAS
Other
2.4 %
0.1
6.0
Allowance for losses as a percent of nonearning receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
EFS
GECAS
Other
2.2 %
0.5
5.7
September 30,
2010
1.2 %
0.2
2.5
September 30,
2010
4.0 %
NM
1.2
NM %
0.2
NM
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition).
Under FASB ASC 310, Receivables, these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually
delinquent at acquisition. In addition, nonearning receivables exclude loans which are paying currently under a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent
when payments are brought current according to restructured terms but may remain classified as nonearning until there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured
of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted
for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values
(including housing price indices as applicable), and the present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates
relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition
date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
14
GE Capital - Portfolio overview
(In millions, unless otherwise noted)
Balances
September 30,
2011
Real Estate
Debt (b)
Business Properties
Total
$
$
25,748
8,630
34,378
$
$
$
714
314
1,028
$
$
$
978
163
1,141
$
$
$
151
36
187
1,092
184
1,276
$
June 30,
2011
$
29,474
9,548
39,022
$
$
$
$
769
368
1,137
$
$
1,118
181
1,299
September 30,
2010
30,249
9,962
40,211
$
$
December 31,
2010
$
$
Allowance for losses (d)
March 31,
2011
June 30,
2011
September 30,
2011
Real Estate
Debt
Business Properties
Total
680
323
1,003
$
$
December 31,
2010
Nonearning receivables (c)
March 31,
2011
June 30,
2011
September 30,
2011
Real Estate
Debt
Business Properties
Total
27,750
9,057
36,807
$
September 30,
2011
Real Estate
Debt
Business Properties
Total
Financing receivables (a)
March 31,
2011
June 30,
2011
September 30,
2010
961
386
1,347
$
$
December 31,
2010
$
$
$
91
27
118
$
$
240
40
280
$
$
1,037
388
1,425
September 30,
2010
1,292
196
1,488
$
$
Write-offs (net) - for three months ending
March 31,
December 31,
2011
2010
$
32,167
10,314
42,481
1,649
208
1,857
September 30,
2010
332
33
365
$
$
195
27
222
(a) Financing receivables include $9,357 million of impaired loans at Real Estate at September 30, 2011.
(b) Financing receivables include $119 million of construction loans at September 30, 2011.
(c) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under FASB ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans which
are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(d) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments
about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected
future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective
January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition.
This may result in lower reserve coverage ratios prospectively.
15
GE Capital - Portfolio overview
Ratios
Nonearning receivables as a percent of financing receivables (a)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Real Estate
Debt
Business Properties
Total
2.8 %
3.6
3.0
137.0 %
51.9
111.0
145.4 %
49.2
114.2
3.9 %
2.0
3.5
2.3 %
1.6
2.1
134.4 %
50.8
110.5
3.8 %
1.9
3.3
September 30,
2011
4.18 %
1.3 %
1.2
1.2
4.12 %
4.08 %
159.0 %
53.6
130.0
September 30,
2010
4.3 %
2.0
3.7
5.1 %
2.0
4.4
September 30,
2010
4.3 %
1.3
3.5
3.2 %
1.6
2.8
Real Estate
March 31,
2011
June 30,
2011
3.2 %
3.8
3.4
September 30,
2010
Write-offs as a percent of financing receivables (c)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Delinquency
160.6 %
57.0
127.2
3.8 %
1.9
3.3
Real Estate
Debt
Business Properties
Total
3.2 %
3.9
3.3
Allowance for losses as a percent of total financing receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Real Estate
Debt
Business Properties
Total
2.6 %
3.9
2.9
Allowance for losses as a percent of nonearning receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Real Estate
Debt
Business Properties
Total
2.5 %
3.6
2.7
September 30,
2010
December 31,
2010
2.4 %
1.0
2.1
September 30,
2010
4.41 %
5.74 %
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition).
Under FASB ASC 310, Receivables, these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually
delinquent at acquisition. In addition, nonearning receivables exclude loans which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent
when payments are brought current according to restructured terms but may remain classified as nonearning until there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured
of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted
for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values
(including housing price indices as applicable), and the present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates
relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition
date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
16
GE Capital - Consumer portfolio overview
(In millions, unless otherwise noted)
Balances
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
$
$
38,708
19,801
43,249
6,462
8,017
116,237
$
$
$
3,619
299
882
35
441
5,276
$
$
$
779
816
1,953
123
211
3,882
$
$
$
67
172
537
15
45
836
790
934
1,846
143
218
3,931
$
$
40,421
20,235
41,282
7,295
8,231
117,464
$
$
$
$
3,843
295
1,004
41
461
5,644
$
$
813
930
2,141
152
239
4,275
40,011
20,132
43,974
7,558
8,304
119,979
September 30,
2010
$
$
December 31,
2010
$
$
Allowance for losses (c)
March 31,
2011
June 30,
2011
3,738
289
1,201
46
478
5,752
$
$
December 31,
2010
$
$
803
937
2,333
168
259
4,500
$
$
64
196
652
27
43
982
$
$
55
182
777
36
61
1,111
$
$
112
251
891
13
70
1,337
40,127
20,966
40,052
8,155
8,488
117,788
September 30,
2010
3,966
317
1,144
41
481
5,949
September 30,
2010
$
$
Write-offs (net) - for three months ending
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
3,804
308
790
39
490
5,431
$
$
December 31,
2010
Nonearning receivables (b)
March 31,
2011
June 30,
2011
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
40,731
21,047
42,178
7,141
8,528
119,625
$
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
Financing receivables (a)
March 31,
2011
June 30,
2011
867
974
2,551
198
244
4,834
September 30,
2010
$
$
62
243
853
42
59
1,259
(a) Financing receivables include impaired loans of $3,093 million at September 30, 2011.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and
judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the
present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis,
as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses
is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
17
GE Capital - Consumer portfolio overview
Nonearning receivables as a percent of financing receivables (a)
June 30,
March 31,
December 31,
2011
2011
2010
Ratios
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
9.3
1.5
2.0
0.5
5.5
4.5
%
21.5
272.9
221.4
351.4
47.8
73.6
%
2.0
4.1
4.5
1.9
2.6
3.3
%
9.3
1.4
2.7
0.6
5.8
4.8
%
%
21.2
315.3
213.2
370.7
51.8
75.7
%
1.9
4.4
4.4
2.0
2.6
3.3
%
2.0
4.6
5.2
2.1
2.9
3.6
0.7
3.4
5.0
0.9
2.2
2.8
%
7.59 %
0.6
3.8
6.2
1.5
2.1
3.3
%
0.5
3.6
7.3
1.9
3.0
3.7
21.5 %
324.2
194.3
365.2
54.2
78.2
%
7.59 %
September 30,
2010
2.2 %
4.6
6.4
2.4
2.9
4.1
September 30,
2010
1.1 %
4.9
8.5
0.7
3.3
4.5
December 31,
2010
7.89 %
21.9 %
307.3
223.0
482.9
50.7
81.3
2.0 %
4.7
5.3
2.2
3.1
3.8
%
Consumer
March 31,
2011
June 30,
2011
9.9 %
1.5
2.9
0.5
5.7
5.1
September 30,
2010
Write-offs as a percent of financing receivables (c)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Delinquency
20.8
303.2
233.7
366.7
44.5
72.4
%
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
9.5
1.5
2.4
0.6
5.6
4.8
Allowance for losses as a percent of total financing receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
%
Allowance for losses as a percent of nonearning receivables (b)
June 30,
March 31,
December 31,
2011
2011
2010
September 30,
2011
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
9.3
1.5
1.9
0.5
5.7
4.5
September 30,
2010
0.6 %
4.7
8.5
2.1
2.8
4.3
September 30,
2010
8.09 %
8.58 %
(a) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, Receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying on a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(b) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and
judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the
present and expected future levels of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis,
as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses
is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(c) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
18
GE Capital - Nonearning and nonaccrual financing receivables
($ millions)
September 30, 2011
Commercial
CLL
EFS
GECAS
Other
Total Commercial
Nonearning
financing
receivables (a)
Nonaccrual
financing
receivables (b)
$
$
3,299
135
62
71
3,567
4,547
135
62
123
4,867
Real Estate
1,028
7,285
Consumer
5,276
5,508
Total
$
9,871
$
17,660
(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 $17.7 billion includes $9.9 billion classified as nonearning financing receivables. Substantially all of this difference relates to loans which are classified as nonaccrual financing receivables but are paying on a cash basis,
and therefore are excluded from nonearning financing receivables.
19
GE Capital - Consumer allowance for losses on financing receivables
(In millions)
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
(In millions)
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total Consumer
Provision
charged to
operations (a)
Balance
January 1,
2011
Balance
December 31,
2009
Other (b)
Gross writeoffs
Recoveries
Balance
September 30,
2011
$
803
937
2,333
168
259
$
151
413
1,587
26
107
$
11
16
(1)
7
(6)
$
(229)
(980)
(2,365)
(176)
(215)
$
43
430
399
98
66
$
779
816
1,953
123
211
$
4,500
$
2,284
$
27
$
(3,965)
$
1,036
$
3,882
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (c)
Other (b)
Gross writeoffs
Recoveries
Balance
September 30,
2010
$
892
1,106
1,551
292
292
$
1,602
-
$
892
1,106
3,153
292
292
$
224
810
2,342
83
210
$
(57)
(46)
(3)
(36)
(24)
$
(259)
(1,318)
(3,285)
(269)
(298)
$
67
422
344
128
64
$
867
974
2,551
198
244
$
4,133
$
1,602
$
5,735
$
3,669
$
(166)
$
(5,429)
$
1,025
$
4,834
(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.
20
GE Capital - Consumer financing receivables by region
(In millions)
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
$
-
$
September 30, 2010
$
$
Total at September 30, 2010
$
-
$
$
41,282
61,517
$
40,052
6,462
$
61,018
$
$
7,295
$
-
$
$
849
$
8,231
42,131
46,359
19,697
8,550
280
447
$
117,464
June 30, 2011
Installment and
revolving credit
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at June 30, 2011
$
-
$
31,240
8,783
245
51
412
December 31, 2010
40,731
$
Total at December 31, 2010
$
-
$
63,225
$
43,974
$
64,106
$
7,141
$
-
$
$
8,528
7,558
$
119,625
Total
877
$
2,853
4,321
253
$
43,067
46,324
20,461
9,103
247
423
Other (a)
4,700
1,341
1,516
1
$
Total
889
2,755
4,677
207
-
Auto
$
7,533
5,479
6,868
221
31
$
Other (a)
4,547
1,326
1,267
1
Installment and
revolving credit
31,100
8,108
249
105
449
40,011
Auto
$
7,782
5,675
7,384
196
10
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
42,178
8,304
44,851
46,186
19,249
8,886
326
481
$
119,979
Total
939
$
2,971
4,283
295
$
116,237
Total
Other (a)
8,155
44,134
43,888
19,130
8,509
205
371
2,736
4,432
214
-
5,112
1,389
1,647
7
$
8,017
$
Auto
$
885
Other (a)
-
$
Total
2,542
4,418
172
-
4,645
1,328
1,320
2
7,433
5,565
6,421
1,493
54
$
$
Auto
Installment and
revolving credit
31,317
7,957
246
139
468
40,127
-
7,665
5,564
6,782
206
18
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
63,050
Other (a)
4,187
1,195
1,079
1
Installment and
revolving credit
31,313
8,373
234
74
427
40,421
$
7,438
5,154
7,033
171
5
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
43,249
Auto
8,488
40,991
46,833
19,194
8,609
1,632
529
$
117,788
(a) Represents mainly small and medium enterprise loans.
21
GE Capital - Consumer mortgage portfolio by country (a)
(In millions)
Financing
receivables
September 30, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
June 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
$
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
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
Total at September 30, 2011 (c)
$
38,708
100.0 %
9.3 %
13.6 %
Total at June 30, 2011 (c)
$
40,731
100.0 %
9.3 %
13.6 %
Financing
receivables
March 31, 2011
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
Financing
receivables
December 31, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
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
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 March 31, 2011
$
40,421
100.0 %
9.5 %
13.2 %
Total at December 31, 2010
$
40,011
100.0 %
9.3 %
13.7 %
Financing
receivables
September 30, 2010
As a % of
total
Nonearning
receivables
Delinquent more
than 30 days
U.K.
France
Poland
Czech Republic
Hungary
Spain
All other
$
18,858
9,302
5,545
1,210
1,020
1,074
3,118
47.0 %
23.2
13.8
3.0
2.5
2.7
7.8
15.0 %
2.4
0.9
1.4
8.4
18.1
18.7
23.4 %
3.5
2.0
2.2
13.6
27.4
17.6
Total at September 30, 2010
$
40,127
100 %
9.9 %
14.6 %
(a) Consumer loans secured by residential real estate (both revolving and closed-end loans) are written down to the fair value of collateral, less costs to sell, no later than when they become 360 days past due.
(b) At September 30, 2011, we had in repossession stock 540 houses in the U.K., which had a value of approximately $0.1 billion.
(c) At September 30, 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 14% and have a loan-to-value ratio at origination of 76%. At September 30, 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 85% and 57%, respectively.
22
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
Other (a)
250
126
81
3
$
(79)
17
16
(4)
$
Balance
September 30,
2011
Recoveries
(544)
(218)
(194)
-
$
80
49
25
-
$
995
403
150
5
EFS
22
10
-
(4)
8
36
GECAS
20
(4)
-
(2)
-
14
Other
58
13
-
(31)
3
43
Total Commercial
(In millions)
CLL
Americas
Europe
Asia
Other
$
Balance
December 31,
2009
$
EFS
1,180
575
244
10
$
66
(10)
-
$
479
$
Provision
charged to
operations
Balance
January 1,
2010
Adoption of ASU
2009-16 & 17 (b)
$
2,045
1,246
575
234
10
$
(50)
$
Gross
write-offs
Other (a)
823
190
131
(3)
$
(993)
(20)
(47)
(10)
-
$
$
165
$
1,646
Balance
September 30,
2010
Recoveries
(787)
(348)
(118)
-
$
95
41
15
-
$
1,357
411
252
7
28
-
28
56
1
-
-
85
GECAS
104
-
104
17
-
(96)
-
25
Other
34
-
34
23
(2)
(3)
1
53
Total Commercial
$
2,175
$
56
$
2,231
$
1,237
$
(78)
$
(1,352)
$
152
$
2,190
(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.
23
GE Capital - Real Estate allowance for losses on financing receivables
Provision
charged to
operations
Balance
January 1,
2011
(In millions)
Gross
write-offs
Other (a)
Recoveries
Balance
September 30,
2011
Real Estate
Debt
Business Properties
$
1,292
196
$
155
70
$
13
-
$
(494)
(107)
$
12
4
$
978
163
Total Real Estate
$
1,488
$
225
$
13
$
(601)
$
16
$
1,141
Balance
December 31,
2009
Adoption of ASU 200916 & 17 (b)
Real Estate
Debt
Business Properties
$
1,358
136
$
Total Real Estate
$
1,494
$
(In millions)
Provision
charged to
operations
Balance
January 1,
2010
(3)
45
$
42
$
1,355
181
$
1,536
$
Gross
write-offs
Other (a)
794
124
$
918
$
5
(7)
$
(2)
$
Recoveries
(505)
(92)
$
(597)
$
-
Balance
September 30,
2010
$
1,649
208
$
1,857
2
2
(a) Other primarily included the effects of currency exchange.
(b) On January 1, 2010, we adopted ASU 2009-16 & 17, amendments to ASC 810, Consolidation, that required us to consolidate the allowance for losses of VIEs consolidated on January 1, 2010.
24
GE Capital - Real Estate debt overview
(In millions)
Region
September 30,
2011
June 30,
2011
Financing receivables
March 31,
2011
December 31,
2010
September 30,
2010
U.S.
Europe
Pacific Basin
Americas
$
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
$
27,628
4,719
2,974
7,160
Total (a)
$
34,378
$
36,807
$
39,022
$
40,211
$
42,481
Vintage profile
Originated in
pre-2008
2008
2009
2010
2011
Total
September 30,
2011
Property type
September 30,
2011
June 30,
2011
Financing receivables
March 31,
2011
December 31,
2010
September 30,
2010
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
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
$
10,028
10,314
6,467
4,683
3,775
3,937
1,192
121
1,964
Total (a)
$
34,378
$
36,807
$
39,022
$
40,211
$
42,481
Contractual maturities
September 30,
2011
$
20,695
11,974
57
608
1,044
Due in
2011 and prior (b)
2012
2013
2014
2015 and later
$
34,378
Total
$
4,845
8,173
4,229
4,579
12,552
$
34,378
(a) Represents total gross financing receivables for Real Estate only.
(b) Includes $907 million relating to loans with contractual maturities prior to September 30, 2011.
25
GE Capital - Real Estate equity overview (a)
(In millions, unless otherwise noted)
September 30,
2011
Region
Equity
March 31,
2011
June 30,
2011
December 31,
2010
September 30,
2010
U.S.
Europe
Pacific Basin
Americas
$
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
$
9,254
9,905
7,327
2,927
Total
$
26,428
$
27,418
$
28,486
$
28,869
$
29,413
September 30,
2011
Vintage profile (e)
Originated in
pre-2008
2008
2009
2010
2011
Total
$
$
September 30,
2011
Property type
Equity
March 31,
2011
June 30,
2011
December 31,
2010
September 30,
2010
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
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
$
14,695
4,340
3,579
2,803
1,459
817
724
334
662
Total
$
26,428
$
27,418
$
28,486
$
28,869
$
29,413
September 30,
2011
Key metrics
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
23,471
1,890
96
249
722
End of period vacancies (d)
26,428
Foreclosed properties (f)
22,753
June 30,
2011
$
1,351
$
5.8 %
19.5 %
$
745
March 31,
2011
23,665
$
1,425
$
6.0 %
20.2 %
$
606
December 31,
2010
24,616
$
1,382
$
5.5 %
20.6 %
$
601
25,187
September 30,
2010
$
1,453
$
5.7 %
20.0 %
$
629
25,549
1,384
5.5 %
21.0 %
$
708
(a) Includes real estate investments related to Real Estate only.
(b) Excludes joint ventures, equity investment securities, and foreclosed properties.
(c) Net operating income yield is calculated as annualized net operating income for the relevant quarter as a percentage of the average owned real estate.
(d) Excludes hotel properties, apartment buildings and parking facilities.
(e) Includes foreclosed properties based on date of foreclosure.
(f) Excludes foreclosed properties related to loans acquired at a discount with an expectation to foreclose.
26
GE Capital - Equipment leased to others (ELTO), net of depreciation and amortization overview
(In millions)
September 30, 2011
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at September 30, 2011
$
March 31, 2011
Collateral type
GECAS
3,083
8,970
2,892
1,674
224
1,191
$
18,034
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
Total at March 31, 2011
$
September 30, 2010
Collateral type
$
Total at September 30, 2010
$
31,846
-
$
31,846
$
GECAS
3,141
9,246
2,917
1,434
2,045
1,108
$
19,891
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
EFS
$
32,144
$
GECAS
3,469
8,783
3,008
1,402
1,893
1,125
$
19,680
$
867
$
867
$
EFS
32,144
-
$
30,842
$
-
$
3
2
6
11
$
886
$
886
$
-
$
5
2
6
13
$
$
1,198
$
-
$
50,758
Total at June 30, 2011
$
December 31, 2010
Collateral type
GECAS
3,003
9,324
2,932
1,687
2,088
1,182
$
20,216
$
CLL
35,285
9,251
2,917
1,436
2,045
2,000
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
$
52,934
Total at December 31, 2010
$
$
34,311
8,789
3,008
1,404
1,893
2,329
$
51,734
6
2
6
14
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Marine shipping containers
All other
EFS
32,885
-
$
32,885
$
GECAS
3,130
9,072
2,960
1,452
1,924
927
$
19,465
$
Consumer
877
$
877
$
$
31,535
$
Total
$
35,888
9,329
2,932
1,689
2,088
2,065
$
53,991
5
2
6
EFS
31,535
-
-
13
Consumer
1,089
$
1,089
$
-
Total
$
34,665
9,077
2,960
1,454
1,924
2,023
$
52,103
5
2
7
14
Total
Consumer
1,198
June 30, 2011
Collateral type
34,929
8,973
2,892
1,676
224
2,064
Total
Consumer
EFS
30,842
-
Total
Consumer
27
GE Capital - Commercial aircraft asset details
Collateral type (In millions)
September 30,
2011
June 30,
2011
Loans and leases
March 31,
2011
December 31,
2010
September 30,
2010
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
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
$
23,083
8,249
3,855
5,322
2,441
Total (a)
$
43,568
$
44,713
$
44,128
$
44,028
$
42,950
Airline regions (In millions)
September 30,
2011
June 30,
2011
Loans and leases
March 31,
2011
December 31,
2010
September 30,
2010
U.S.
Europe
Pacific Basin
Americas
Other
$
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
$
14,659
9,290
7,791
5,258
5,952
Total (a)
$
43,568
$
44,713
$
44,128
$
44,028
$
42,950
Aircraft vintage profile (In millions)
September 30,
2011
0-5 years
6-10 years
11 - 15 years
15+ years
$
19,660
14,222
5,174
2,303
Total (b)
$
41,359
(a) Includes loans and financing leases of $11,841 million, $11,952 million, $12,104 million, $12,615 million, and $12,227 million (less non-aircraft loans and financing leases of $119 million, $124 million, $120 million,
$122 million, and $119 million) and ELTO of $31,846 million, $32,885 million, $32,144 million, $31,535 million, and $30,842 million, at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010,
and September 30, 2010, respectively, related to commercial aircraft at GECAS.
(b) Excludes aircraft engine loans and leases of $2,209 million at September 30, 2011.
28
GE Capital other key areas
29
GE Capital - Investment securities
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
At September 30, 2011
Gross
Gross
unrealized
unrealized
gains
losses
Amortized
cost
$
3,696
654
1,790
1,480
3,925
1,395
1,787
2,523
$
59
17
29
25
2
34
4
13
$
Estimated
fair value
(168)
(141)
(281)
(199)
(215)
(124)
(133)
-
$
At December 31, 2010
Gross
Gross
unrealized
unrealized
gains
losses
Amortized
cost
3,587
530
1,538
1,306
3,712
1,305
1,658
2,536
$
3,490
918
2,099
1,619
3,242
1,478
1,804
2,663
$
169
4
14
7
39
8
3
$
Estimated
fair value
(14)
(232)
(355)
(183)
(190)
(111)
(58)
(5)
$
3,645
690
1,758
1,436
3,059
1,406
1,754
2,661
Retained interests
29
14
(6)
37
55
10
(26)
39
Equity
Available-for-sale
Trading
720
387
123
-
(77)
-
766
387
902
417
194
-
(9)
-
1,087
417
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
$
320
$
(1,344)
$
17,362
$
At September 30, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
$
Retained interests
Equity
Total
18,386
$
584
56
134
2,836
38
578
-
$
(69)
(28)
(1)
(48)
(2)
(25)
-
$
451
266
892
1,304
850
723
160
2
$
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
(99)
(113)
(280)
(199)
(167)
(122)
(108)
-
$
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)
-
-
-
3
(6)
-
-
34
(26)
116
(77)
-
-
46
(9)
-
-
4,342
$
(250)
$
4,651
$
(1,094)
$
3,974
$
(154)
$
4,066
$
(1,029)
(a) Substantially collateralized by U.S. mortgages.
30
GE Capital - Investments measured at fair value in earnings (a)
Asset balances at
September 30,
2011
Investment type (In millions)
Equities - trading
$
387
December 31,
2010
$
417
Net earnings impact for nine
months ending September
30, 2011
$
(23)
Assets held for sale (LOCOM)
3,682
3,538
(41)
Assets of businesses held for sale (LOCOM)
3,050
3,127
(11)
595
390
3
Other (Investment companies and loans)
Total
$
7,714
$
7,472
$
(72)
(a) Excludes derivatives portfolio.
31
GE Capital - Ending Net Investment (ENI)
September 30,
2011
(In billions)
GECC total assets
$
Less: assets of discontinued operations
Less: non-interest bearing liabilities
GE Capital ENI
$
Less: cash and equivalents
GE Capital ENI, excluding cash and equivalents
572.7
June 30,
2011
$
577.1
$
569.8
December 31,
2010
$
581.1
September 30,
2010
$
596.2
(1.5)
(6.4)
(10.1)
(12.4)
(21.7)
(36.7)
(36.1)
(36.6)
(38.7)
(39.2)
534.5
$
(82.4)
$
March 31,
2011
452.1
534.6
$
(77.3)
$
457.3
523.1
$
(66.5)
$
456.6
530.0
$
(59.5)
$
470.5
535.3
(63.6)
$
471.7
32
GECC - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
September 30,
2011
$
453.2
79.1
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
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
September 30,
2010
$
481.4
70.5
6.4:1
$
465.4
(7.7)
(59.7)
398.0
6.8:1
$
481.4
(7.7)
(65.4)
408.3
Equity (b)
Add: hybrid debt
Adjusted equity
79.1
7.7
86.8
78.8
7.7
86.5
76.1
7.7
83.8
72.9
7.7
80.6
70.5
7.7
78.2
Adjusted leverage ratio
4.2:1
4.3:1
4.5:1
4.9:1
5.2:1
Tangible common equity to tangible assets ratio
(In billions)
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
79.1
(29.4)
$
78.8
(30.0)
$
76.1
(29.6)
$
72.9
(29.5)
$
70.5
(30.1)
Tangible common equity
$
49.7
$
48.8
$
46.5
$
43.4
$
40.4
Total assets
Less: Goodwill and other intangibles
$
572.7
(29.4)
$
577.1
(30.0)
$
569.8
(29.6)
$
581.1
(29.5)
$
596.1
(30.1)
Tangible assets
$
543.3
$
547.1
$
540.2
$
551.6
$
566.0
Tangible common equity to tangible assets
Tier 1 common ratio (c)
9.1 %
8.9 %
8.6 %
7.9 %
7.1 %
11.0 %
10.4 %
9.8 %
8.9 %
8.2 %
(a) Includes discontinued operations.
(b) Equity represents amounts available to GECC shareholders, excluding noncontrolling interests.
(c) Based on Basel One RWA estimates.
33
GECS supplemental information
34
GECS - Investment securities
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
At September 30, 2011
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
$
21,633
2,970
2,794
2,887
4,060
2,703
2,282
3,220
$
3,076
317
191
137
10
135
116
91
$
Estimated
fair value
(276)
(144)
(303)
(269)
(216)
(142)
(133)
-
$
At December 31, 2010
Gross
Gross
unrealized
unrealized
losses
gains
Amortized
cost
24,433
3,143
2,682
2,755
3,854
2,696
2,265
3,311
$
21,233
2,961
3,092
3,009
3,407
2,883
2,242
3,358
$
1,576
45
95
145
16
116
82
57
$
Estimated
fair value
(237)
(282)
(378)
(230)
(193)
(132)
(58)
(47)
$
22,572
2,724
2,809
2,924
3,230
2,867
2,266
3,368
Retained interests
29
14
(6)
37
55
10
(26)
39
Equity
Available-for-sale
Trading
828
387
134
-
(83)
-
879
387
500
417
213
-
(8)
-
705
417
Total
(In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
$
4,221
$
(1,572)
$
46,442
$
At September 30, 2011 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
unrealized
unrealized
Estimated
Estimated
losses
losses
fair value
fair value
$
Retained interests
Equity
Total
43,793
$
1,387
62
179
366
2,836
284
597
-
$
(104)
(29)
(6)
(36)
(48)
(8)
(25)
-
$
961
321
970
1,382
856
773
161
2
$
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
(172)
(115)
(297)
(233)
(168)
(134)
(108)
-
$
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)
-
-
-
3
(6)
-
-
34
(26)
187
(83)
-
-
49
(8)
-
-
5,898
$
(339)
$
5,429
$
(1,233)
$
7,436
$
(310)
$
5,785
$
(1,281)
(a) Substantially collateralized by U.S. mortgages.
35
GECS - Funding
(In billions)
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
Commercial paper
Long-term debt (a)
Deposits / CD's
Alternate funding / other
Non-recourse borrowings of consolidated securitization entities
$
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
$
41.3
347.4
36.4
24.2
30.5
Total debt
$
456.8
$
463.2
$
458.1
$
470.5
$
479.8
$
53.6
$
53.7
$
53.0
$
51.8
$
52.1
Metrics
Bank lines
Commercial paper coverage (b):
Bank lines
Bank lines and cash and equivalents
132 %
336 %
132 %
323 %
130 %
296 %
123 %
267 %
126 %
282 %
Cash and equivalents
$
83.3
$
78.0
$
67.3
$
60.3
$
64.3
LT debt < 1 year
$
76.4
$
72.9
$
59.2
$
65.6
$
62.7
(a) Includes $45 billion, $45 billion, $45 billion, $53 billion, and $55 billion of long term debt issued under the TLGP program at September 30, 2011, June 30, 2011, March 31, 2011,
December 31, 2010, and September 30, 2010, respectively.
(b) Commercial paper coverage represents bank lines, both excluding and including cash and equivalents, as a percentage of the commercial paper balance as of the end of the relevant period.
36
GECS - Ratios (a)
Leverage ratio
(In billions)
Debt
Equity (b)
September 30,
2011
$
458.4
76.0
Leverage ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
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
September 30,
2010
$
486.5
66.9
6.8:1
$
470.6
(7.7)
(60.4)
402.5
7.3:1
$
486.5
(7.7)
(66.0)
412.8
Equity (b)
Add: hybrid debt
Adjusted equity
76.0
7.7
83.7
75.1
7.7
82.8
72.1
7.7
79.8
69.0
7.7
76.7
66.9
7.7
74.6
Adjusted leverage ratio
4.4:1
4.6:1
4.8:1
5.2:1
5.5:1
Tangible common equity to tangible assets ratio
(In billions)
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
September 30,
2010
Total equity (b)
Less: Goodwill and other intangibles
$
76.0
(29.4)
$
75.1
(30.0)
$
72.1
(29.6)
$
69.0
(29.5)
$
66.9
(30.1)
Tangible common equity
$
46.6
$
45.1
$
42.5
$
39.5
$
36.8
Total assets
Less: Goodwill and other intangibles
$
603.1
(29.4)
$
605.6
(30.0)
$
597.7
(29.6)
$
608.7
(29.5)
$
624.7
(30.1)
Tangible assets
$
573.7
$
575.6
$
568.1
$
579.2
$
594.6
Tangible common equity to tangible assets
8.1 %
7.8 %
7.5 %
6.8 %
6.2 %
Tier 1 common ratio (c)
9.6 %
9.1 %
8.6 %
7.8 %
7.3 %
(a) Includes discontinued operations.
(b) Equity represents amounts available to GECS shareholders, excluding noncontrolling interests.
(c) Based on Basel One RWA estimates.
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Appendix
38
Glossary
Term
Definition
Borrowing
Financial liability (short or long-term) that obligates us to repay cash or another financial asset to another entity.
Cash and equivalents
Highly liquid debt instruments with original maturities of three months or less, such as commercial paper. Typically included with cash
for reporting purposes, unless designated as available-for-sale and included with investment securities.
Cash flow hedges
Qualifying derivative instruments that we use to protect ourselves against exposure to variability in future cash flows. The exposure may
be associated with an existing asset or liability, or with a forecasted transaction. See "Hedge."
Commercial paper
Unsecured, unregistered promise to repay borrowed funds in a specified period ranging from overnight to 270 days.
Derivative instrument
A financial instrument or contract with another party (counterparty) that is designed to meet any of a variety of risk management
objectives, including those related to fluctuations in interest rates, currency exchange rates or commodity prices. Options, forwards and
swaps are the most common derivative instruments we employ. See "Hedge."
Discontinued operations
Certain businesses we have sold or committed to sell within the next year and therefore will no longer be part of our ongoing operations.
The net earnings, assets and liabilities, and cash flows of such businesses are separately classified on our Statement of Earnings and
Statement of Financial Position for all periods presented.
Ending Net Investment (ENI)
The total capital we have invested in the financial services business. It is the sum of short-term borrowings, long-term borrowings and
equity (excluding noncontrolling interests) adjusted for unrealized gains and losses on investment securities and hedging instruments.
Alternatively, it is the amount of assets of continuing operations less the amount of non-interest bearing liabilities.
Equipment leased to others
Rental equipment we own that is available to rent and is stated at cost less accumulated depreciation.
Fair value hedge
Qualifying derivative instruments that we use to reduce the risk of changes in the fair value of assets, liabilities or certain types of firm
commitments. Changes in the fair values of derivative instruments that are designated and effective as fair value hedges are recorded in
earnings, but are offset by corresponding changes in the fair values of the hedged items. See "Hedge."
Financing receivables
Investment in contractual loans and financing leases due from customers (not investment securities).
Goodwill
The premium paid for acquisition of a business. Calculated as the purchase price less the fair value of net assets acquired (net assets are
identified tangible and intangible assets, less liabilities assumed).
Hedge
A technique designed to eliminate risk. Often refers to the use of derivative financial instruments to offset changes in interest rates,
currency exchange rates or commodity prices, although many business positions are "naturally hedged" - for example, funding a U.S.
fixed-rate investment with U.S. fixed-rate borrowings is a natural interest rate hedge.
39
Glossary
Term
Definition
Intangible asset
A non-financial asset lacking physical substance, such as goodwill, patents, licenses, trademarks and customer relationships.
Interest rate swap
Agreement under which two counterparties agree to exchange one type of interest rate cash flow for another. In a typical
arrangement, one party periodically will pay a fixed amount of interest, in exchange for which that party will receive variable
payments computed using a published index. See "Hedge."
Investment securities
Generally, an instrument that provides an ownership position in a corporation (a stock), a creditor relationship with a corporation
or governmental body (a bond), rights to contractual cash flows backed by pools of financial assets or rights to ownership such as
those represented by options, subscription rights and subscription warrants.
Net operating income
Represents operating income less operating expenses for owned real estate properties.
Retained interest
A portion of a transferred financial asset retained by the transferor that provides rights to receive portions of the cash inflows from
that asset.
Securitization
A process whereby loans or other receivables are packaged, underwritten and sold to investors. In a typical transaction, assets are
sold to a special purpose entity, which purchases the assets with cash raised through issuance of beneficial interests (usually debt
instruments) to third-party investors. Whether or not credit risk associated with the securitized assets is retained by the seller
depends on the structure of the securitization. See "Variable interest entity."
Variable interest entity (VIE)
Entity defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810 (FASB Interpretation 46
(Revised)), and that must be consolidated by its primary beneficiary. A variable interest entity has one or both of the following
characteristics: (1) its equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated
financial support from other parties, or (2) as a group, the equity investors lack one or more of the following characteristics: (a)
direct/indirect ability to make decisions, (b) obligation to absorb expected losses, or (c) right to receive expected residual returns.
40