Download 4Q'09 GECS Supplement

GE Capital
Fourth quarter 2009 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: the severity and duration of current economic and financial conditions,
including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of U.S. and foreign government programs to restore
liquidity and stimulate national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of GE Capital’s funding and on our
ability to reduce GE Capital’s asset levels exposure as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer
credit defaults; 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 soundness of other financial
institutions with which GE Capital does business; the level of demand and financial performance of the major industries we serve, including, without limitation, real estate and
healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of proposed financial services regulation;
strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous other matters of national, regional and global scale,
including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in
our forward-looking statements. We do not undertake to update our forward-looking statements.
This document may also contain non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be
informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons.
Fourth quarter 2009 supplemental information
Table of Contents
1. GE Capital structure
Page #
1
2. Financial statements
a) GECS
3-4
b) GECC
5-6
c) Capital Finance segment earnings
7
3. Asset quality
a) Assets by region
9
b) Assets in selected emerging markets
10
c) Portfolio overview and ratios
11 - 13
d) Consumer allowance for losses on financing receivables
14
e) Consumer financing receivables by region
15
f) Consumer mortgage portfolio by country
16
g) Commercial allowance for losses on financing receivables
17
h) Commercial real estate debt and equity overview
18 - 19
i) Equipment leased to others overview
20
j) Commercial aircraft asset details
21
4. Other key areas
a) Investment securities
23 - 24
b) FAS 157 fair value measurement
25 - 26
c) Investments measured at fair value in earnings
27
d) Funding
28
e) Ending net investment
29
f) Ratios
30-31
5. Appendix
a) Glossary
33-34
GE Capital structure
General Electric Company
General Electric Capital Services,
Inc. (GECS)
General Electric Capital
Corporation (GECC)
Operating businesses - Capital Finance
Consumer
(formerly GE Money)
-
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
GECS - condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
December 31,
2009
$
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 14 and 17)
Depreciation and amortization
Total costs and expenses
13,224
279
13,503
September 30,
2009
$
12,533
213
12,746
For three months ending
June 30,
2009
$
13,252
205
13,457
March 31,
2009
$
14,184
273
14,457
For the year ending
December 31,
December 31,
2009
2008
December 31,
2008
$
15,487
299
15,786
$
53,193
970
54,163
$
69,514
1,773
71,287
4,225
3,991
239
812
2,907
2,128
14,302
4,128
3,712
181
785
2,868
2,069
13,743
4,468
3,524
164
823
2,817
1,947
13,743
5,121
3,948
224
773
2,336
2,181
14,583
5,874
4,522
253
864
3,065
2,701
17,279
17,942
15,175
808
3,193
10,928
8,325
56,371
25,116
18,755
1,517
3,421
7,518
9,330
65,657
(799)
870
(997)
1,138
(286)
670
(126)
1,151
(1,493)
2,074
(2,208)
3,829
5,630
2,375
Earnings from continuing operations
Loss from discontinued operations, net of taxes
71
(18)
141
40
384
(193)
1,025
(4)
581
(151)
1,621
(175)
8,005
(719)
Net earnings
Less: net earnings (loss) attributable to noncontrolling interests
53
(40)
181
8
191
17
1,021
46
430
47
1,446
31
7,286
231
Earnings (loss) from continuing operations before income taxes
Benefit for income taxes
Net earnings attributable to GECS
$
93
$
173
GECS - statement of changes in shareowners' equity
December 31,
2009
(In millions)
Changes in GECS shareowners' equity
Balance at beginning of period
Dividends and other transactions with shareowner
Accumulated other comprehensive income - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Total other comprehensive income
Increases attributable to net earnings
Comprehensive income
Balance at end of period
$
70,720
(50)
September 30,
2009
$
42
(37)
125
(60)
70
93
163
$
70,833
67,904
(24)
$
70,658
$
For three months ending
June 30,
2009
$
1,698
915
(10)
2
2,605
173
2,778
$
174
60,774
61
67,904
$
March 31,
2009
$
1,557
4,801
554
(17)
6,895
174
7,069
$
975
53,279
9,501
60,774
$
$
55,698
5,439
$
(846)
(6,074)
(1,038)
(283)
(8,241)
383
(7,858)
$
53,279
1,415
$
7,055
For the year ending
December 31,
December 31,
2009
2008
December 31,
2008
(636)
(3,049)
696
8
(2,981)
975
(2,006)
$
383
53,341
9,488
$
2,661
2,630
1,365
(67)
6,589
1,415
8,004
$
70,833
57,676
3,154
(3,207)
(8,730)
(2,407)
(262)
(14,606)
7,055
(7,551)
$
53,279
3
GECS - condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see pages 23 - 24)
Inventories
Financing receivables - net (see pages 11 - 13)
Other receivables
Property, plant & equipment, less accumulated amortization of $26,322, $26,485
$26,341, $25,591 and $29,063 (see page 20)
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 28)
Accounts payable
Bank Deposits
Long-term borrowings (see page 28)
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,
2009
$
64,356
51,913
71
336,926
18,752
September 30,
2009
$
56,717
28,961
3,479
87,471
125
1,470
56,898
52,723
79
348,518
18,625
June 30,
2009
$
58,712
28,184
3,838
87,941
1,263
1,533
March 31,
2009
50,017
45,168
73
358,949
18,719
$
58,649
27,709
4,009
85,647
232
1,462
December 31,
2008
45,240
41,783
65
354,480
17,728
$
58,190
24,832
3,416
88,179
1,464
37,486
41,236
77
372,456
18,636
64,097
25,365
3,613
85,721
10,556
1,659
$
650,241
$
658,314
$
650,634
$
635,377
$
660,902
$
133,939
13,275
38,923
327,472
32,009
23,756
6,793
55
1,138
$
134,752
12,501
36,836
336,765
32,948
21,021
9,434
143
1,279
$
146,448
12,401
36,458
319,681
32,831
24,904
6,585
196
1,305
$
149,906
11,718
33,967
309,215
33,946
23,854
8,863
1,165
$
163,899
13,882
36,854
313,848
34,369
32,090
8,533
636
1,243
Total liabilites
577,360
585,679
580,809
572,634
605,354
Capital stock
Accumulated other comprehensive income - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Additional paid-in-capital
Retained earnings
11
11
11
11
11
(436)
1,372
(1,769)
(434)
27,581
44,508
(478)
1,409
(1,894)
(374)
27,568
44,416
(2,176)
494
(1,884)
(376)
27,569
44,266
(3,733)
(4,307)
(2,438)
(359)
27,570
44,030
(3,097)
(1,258)
(3,134)
(367)
18,069
43,055
Total GECS shareowners' equity
70,833
70,658
67,904
60,774
53,279
2,048
1,977
1,921
1,969
2,269
72,881
72,635
69,825
62,743
55,548
Noncontrolling interests
Total equity
Total liabilities and equity
$
650,241
$
658,314
$
650,634
$
635,377
$
660,902
4
GECC - condensed statement of earnings
(In millions)
Revenues
Revenues from services
Sales of goods
Total revenues
December 31,
2009
$
Costs and expenses
Interest
Operating and administrative
Cost of goods sold
Investment contracts, insurance losses and insurance annuity benefits
Provision for losses on financing receivables
Depreciation and amortization
Total costs and expenses
12,306
278
12,584
September 30,
2009
$
For three months ending
June 30,
2009
11,652
213
11,865
$
12,383
205
12,588
March 31,
2009
$
13,363
273
13,636
December 31,
2008
$
14,799
299
15,098
For the year ending
December 31,
December 31,
2009
2008
$
49,704
969
50,673
$
66,221
1,773
67,994
4,214
3,905
239
45
2,890
2,124
13,417
4,122
3,633
181
47
2,860
2,064
12,907
4,436
3,454
164
45
2,815
1,939
12,853
5,090
3,858
224
73
2,322
2,173
13,740
5,838
4,389
253
118
3,061
2,691
16,350
17,862
14,850
808
210
10,887
8,300
52,917
24,859
18,335
1,517
491
7,498
9,303
62,003
(833)
903
(1,042)
1,145
(265)
687
(104)
1,146
(1,252)
1,979
(2,244)
3,881
5,991
2,265
Earnings from continuing operations
Loss from discontinued operations, net of taxes
70
(11)
103
84
422
(194)
1,042
(3)
727
(153)
1,637
(124)
8,256
(704)
Net earnings
Less: net earnings (loss) attributable to noncontrolling interests
59
(37)
187
16
228
29
1,039
50
574
32
1,513
58
7,552
242
Earnings (loss) from continuing operations before income taxes
Benefit for income taxes
Net earnings attributable to GECC
$
96
$
171
GECC - statement of changes in shareowners' equity
(In millions)
Changes in GECC shareowners' equity
Balance at beginning of period
Dividends and other transactions with shareowner
Accumulated other comprehensive income - net
Investment securities
Currency translation adjustments
Cash flow hedges
Benefit plans
Total other comprehensive income
Increases attributable to net earnings
Comprehensive income
Balance at end of period
December 31,
2009
$
73,193
(12)
September 30,
2009
$
401
(38)
138
(60)
441
96
537
$
73,718
$
71,720
(24)
73,168
$
For three months ending
June 30,
2009
$
420
896
(17)
2
1,301
171
1,472
$
199
65,635
23
March 31,
2009
$
556
4,731
593
(17)
5,863
199
6,062
$
71,720
989
58,229
8,750
$
December 31,
2008
$
(40)
(3,024)
723
8
(2,333)
989
(1,344)
$
65,635
542
60,620
5,440
$
58,229
$
7,310
For the year ending
December 31,
December 31,
2009
2008
$
(880)
(6,105)
(1,105)
(283)
(8,373)
542
(7,831)
$
1,455
58,254
8,737
$
1,337
2,565
1,437
(67)
5,272
1,455
6,727
$
73,718
61,230
3,148
(1,988)
(8,705)
(2,504)
(262)
(13,459)
7,310
(6,149)
$
58,229
5
GECC - condensed statement of financial position
(In millions)
Assets
Cash and equivalents
Investment securities (see pages 23 - 24)
Inventories
Financing receivables - net
Other receivables
Property, plant & equipment, less accumulated amortization of $26,296, $26,458
$26,315, $25,564 and $29,026
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
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,
2009
$
63,693
26,336
71
335,288
21,062
September 30,
2009
$
56,250
26,325
79
347,356
20,748
June 30,
2009
$
58,685
28,043
3,371
87,133
1,263
1,533
56,691
28,820
3,018
86,523
125
1,470
March 31,
2009
49,141
20,817
73
357,477
21,784
$
58,618
27,554
3,541
84,850
232
1,462
December 31,
2008
43,984
20,584
65
352,141
21,145
$
58,153
24,672
2,982
87,154
1,464
36,430
19,318
77
370,592
22,175
64,043
25,204
3,174
84,201
10,556
1,640
$
623,097
$
630,786
$
625,549
$
612,344
$
637,410
$
129,221
12,865
38,923
328,414
8,687
22,538
5,619
55
853
$
129,536
12,560
36,836
337,704
9,640
20,099
8,128
143
843
$
141,019
13,184
36,458
320,619
9,526
24,076
5,773
196
913
$
145,114
12,371
33,967
310,096
10,851
22,819
8,657
737
$
158,967
14,863
36,854
314,535
11,403
30,629
8,112
636
799
Total liabilites
547,175
555,489
551,764
544,612
576,798
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)
1,228
(1,816)
(434)
28,431
46,929
(1,077)
1,266
(1,954)
(374)
28,418
46,833
(1,497)
370
(1,937)
(376)
28,419
46,685
(2,053)
(4,361)
(2,530)
(359)
28,421
46,461
(2,013)
(1,337)
(3,253)
(367)
19,671
45,472
Total GECC shareowner's equity
73,718
73,168
71,720
65,635
58,229
2,204
2,129
2,065
2,097
2,383
75,922
75,297
73,785
67,732
60,612
Noncontrolling interests
Total equity
Total liabilities and equity
$
623,097
$
630,786
$
625,549
$
612,344
$
637,410
6
Capital Finance - segment earnings
(In millions)
Revenues
Less: Interest expense
Net revenues
December 31,
2009
$
12,522
(4,294)
8,228
September 30,
2009
$
For three months ending
June 30,
2009
12,161
(4,299)
7,862
$
12,824
(4,524)
8,300
March 31,
2009
$
13,114
(4,758)
8,356
December 31,
2008
$
14,766
(6,329)
8,437
For the year ending
December 31,
December 31,
2009
2008
$
50,621
(17,875)
32,746
$
67,008
(25,094)
41,914
Costs and expenses
Selling, general and administrative
Depreciation and amortization
Operating and other expenses
Total costs and expenses
2,545
2,120
1,107
5,772
2,680
2,062
957
5,699
2,565
1,941
790
5,296
2,814
2,174
1,059
6,047
3,188
2,640
538
6,366
10,604
8,297
3,913
22,814
13,891
9,310
4,285
27,486
Earnings before income taxes and provision for losses
Less: Provision for losses on financing receivables
2,456
(2,893)
2,163
(2,865)
3,004
(2,817)
2,309
(2,324)
2,071
(3,055)
9,932
(10,899)
14,428
(7,490)
(437)
729
(702)
969
187
432
(15)
1,187
(984)
2,063
(967)
3,317
6,938
(1,914)
Earnings (loss) before income taxes
Benefit (provision) for income taxes
Capital Finance segment earnings
Less: Net earnings (loss) attributable to noncontrolling interests
$
292
(44)
$
267
4
$
619
11
$
1,172
37
$
1,079
49
$
2,350
8
$
8,852
220
Capital Finance segment earnings attributable to the Company
$
336
$
263
$
608
$
1,135
$
1,030
$
2,342
$
8,632
GECS
$
336
$
263
$
608
$
1,135
$
1,030
$
2,342
$
8,632
GECC
$
308
$
214
$
564
$
1,100
$
1,059
$
2,186
$
8,524
Capital Finance segment earnings included in:
7
Asset Quality
8
Assets - by region (a)
At
(In millions)
Financing
receivables (net)
GECS (b)
136,290
December 31,
2009
Property, plant and
equipment (net)
$
U.S.
Europe
Western (including U.K.)
Eastern
Pacific Basin
Americas (excluding U.S.)
Other
$
Total
$
336,926
$
56,717
$
648,771
Total at September 30, 2009
$
348,518
$
58,712
$
656,781
Total at June 30, 2009
$
358,949
$
58,649
$
649,172
Total at March 31, 2009
$
354,480
$
58,190
$
633,913
Total at December 31, 2008
$
372,456
$
64,097
$
659,243
96,795
20,701
36,781
30,118
16,241
12,611
Total assets
$
7,803
417
2,897
1,360
31,629
329,622
$
130,845
31,499
60,233
42,333
54,239
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
Total assets
Total assets
Total assets
Total assets
328,662
$
136,119
32,044
62,986
42,921
54,049
$
656,781
323,060
$
136,019
29,290
63,659
42,858
54,286
$
649,172
329,139
$
128,885
27,170
61,705
32,308
54,706
$
633,913
330,802
141,901
28,959
69,345
34,208
54,028
$
659,243
At
Financing
receivables (net)
GECC (b)
134,653
December 31,
2009
Property, plant and
equipment (net)
$
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total
$
335,288
$
56,691
$
621,627
Total at September 30, 2009
$
347,356
$
58,685
$
629,253
Total at June 30, 2009
$
357,477
$
58,618
$
624,087
Total at March 31, 2009
$
352,141
$
58,153
$
610,880
Total at December 31, 2008
$
370,592
$
64,043
$
635,770
96,795
20,701
36,781
30,118
16,240
12,585
Total assets
$
7,803
417
2,897
1,360
31,629
302,502
$
130,822
31,499
60,233
42,313
54,258
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
Total assets
Total assets
Total assets
Total assets
301,146
$
136,092
32,044
62,986
42,899
54,086
$
629,253
297,974
$
135,993
29,290
63,659
42,837
54,334
$
624,087
306,103
$
128,860
27,170
61,705
32,289
54,753
$
610,880
307,318
141,881
28,959
69,345
34,191
54,076
$
635,770
(a) Excludes assets of discontinued operations.
(b) Prior period amounts have been reclassified to conform to current-period's presentation.
9
GECS - assets in selected emerging markets
(In millions)
Selected emerging markets (a) (b) (c)
Eastern Europe
Poland
Czech Republic
Hungary
Turkey
Total Eastern Europe
Financing
receivables (net)
$
Pacific Basin and Other
India
Thailand
Total Pacific Basin and Other
Americas
Mexico
Brazil
Central America (ex-Mexico) (d)
Total Americas
10,102
5,896
3,633
19,631
December 31,
2009
Property, plant and
equipment (net)
$
216
68
71
355
Total assets
$
13,421
8,221
4,816
2,684
29,142
$
At
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
Total assets
Total assets
Total assets
Total assets
13,622
8,165
5,165
2,590
29,542
$
12,202
7,458
4,765
2,313
26,738
$
11,664
6,601
4,375
2,061
24,701
$
12,532
6,790
4,754
2,051
26,127
1,211
79
1,290
21
21
1,765
1,386
3,151
2,032
2,524
4,556
2,273
2,536
4,809
2,696
2,430
5,126
3,070
2,604
5,674
8,065
935
4,829
13,829
607
6
241
854
10,155
1,095
9,371
20,621
9,930
1,149
9,035
20,114
10,199
1,364
9,048
20,611
9,948
1,398
731
12,077
10,369
1,488
738
12,595
Total
$
34,750
$
1,230
$
52,914
Total at September 30, 2009
$
35,681
$
1,134
$
54,212
Total at June 30, 2009
$
36,043
$
1,024
$
52,158
Total at March 31, 2009
$
29,794
$
903
$
41,904
Total at December 31, 2008
$
32,467
$
979
$
44,396
$
54,212
$
52,158
$
41,904
$
44,396
(a) We have disclosed here selected emerging markets where our total assets at December 31, 2009, exceed $1 billion. Assets of discontinued operations are excluded.
(b) GECS assets in selected emerging markets are equal to GECC assets.
(c) Prior period amounts have been reclassified to conform to current-period's presentation.
(d) On June 25, 2009, we increased our ownership in BAC, a Central American bank, from 49.99% to a controlling 75% interest. Total assets in GECS include $9.4 billion related to this acquistion.
10
GECS - portfolio overview
(In millions, unless otherwise noted)
Financing receivables
June 30,
2009
Balances (a)
December 31,
2009
CLL
Americas
Europe
Asia
Other
Total (c)
$
$
87,496
39,476
13,202
771
140,945
September 30,
2009
$
$
December 31,
2009
CLL
Americas
Europe
Asia
Other
Total
$
$
1,179
544
244
8
1,975
Ratios
December 31,
2009
CLL
Americas
Europe
Asia
Other
Total
September 30,
2009
$
$
$
97,173
40,548
14,057
751
152,529
$
$
Allowance for losses (d)
June 30,
2009
$
$
1,133
448
199
5
1,785
December 31,
2008
100,985
40,652
14,528
764
156,929
3.8 %
3.1
4.2
1.8
3.6 %
September 30,
2009
$
$
920
327
178
4
1,429
3.1 %
2.6
3.8
2.0
3.1 %
$
$
843
288
163
2
1,296
December 31,
2008
2.7 %
1.1
2.7
1.4
2.3 %
1.2 %
1.1
1.4
0.7
1.2 %
Equipment financing
June 30,
2009
$
105,410
37,767
16,683
786
160,646
December 31,
2009
$
$
December 31,
2008
Allowance for losses as a percent of total financing receivables
September 30,
June 30,
March 31,
2009
2009
2009
1.2 %
1.2
1.7
0.8
1.3 %
$
March 31,
2009
Non earning receivables as as percent of financing receivables
September 30,
June 30,
March 31,
2009
2009
2009
1.3 %
1.4
1.8
1.0
1.4 %
December 31,
2009
$
1,098
500
242
6
1,846
3.6 %
3.5
4.4
1.3
3.6 %
December 31,
2009
CLL
Americas
Europe
Asia
Other
Total
92,263
40,383
14,096
776
147,518
March 31,
2009
1.9 %
0.9
1.8
0.3
1.6 %
December 31,
2008
0.9 %
0.8
1.2
0.5
0.9 %
March 31,
2009
0.8 %
0.8
1.0
0.3
0.8 %
3,155
1,380
576
10
5,121
September 30,
2009
$
$
$
344
90
62
(1)
495
December 31,
2009
37.4 %
39.4
42.4
80.0
38.6 %
December 31,
2009
1.5 %
0.9
1.8
NM
1.4 %
December 31,
2008
3,471
1,240
594
14
5,319
$
$
3,057
1,065
533
15
4,670
March 31,
2009
$
$
December 31,
2008
2,706
437
389
11
3,543
$
$
Write-offs (net) - for three months ending
September 30,
June 30,
March 31,
2009
2009
2009
December 31,
2009
$
Nonearning receivables (b)
June 30,
2009
$
$
266
79
39
1
385
$
$
229
73
54
1
357
December 31,
2008
$
185
56
24
265
$
Allowance for losses as a percent of nonearning receivables
September 30,
June 30,
March 31,
2009
2009
2009
31.6 %
40.3
40.7
42.9
34.7 %
37.1 %
42.1
37.3
33.3
38.2 %
34.0 %
74.8
45.8
36.4
40.3 %
0.9 %
0.7
1.5
0.5
0.9 %
$
$
329
103
66
498
December 31,
2008
Write-offs as a percent of financing receivables (e)
September 30,
June 30,
March 31,
2009
2009
2009
1.1 %
0.8
1.1
0.5
1.0 %
1,974
345
306
2
2,627
42.7
83.5
53.3
100.0
49.3
December 31,
2008
0.7 %
0.6
0.6
NM
0.7 %
1.2
1.0
1.5
NM
1.2
1 12333453
0.780912135
1.108230029
0.523903078
Managed delinquency
Off-book delinquency
On-book delinquency
2.81 %
2.29
2.91
3.01 %
2.51
3.09
2.78 %
2.20
2.88
2.84 %
2.04
2.97
2.17 %
1.20
2.34
(a) During the first quarter of 2009, we transferred Banque Artesia Nederland N.V. (Artesia) from CLL to Consumer. Prior-period amounts were reclassified to conform to the current-period’s presentation.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying currently under a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Financing receivables include impaired loans of $4,563 million at December 31, 2009
(d) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments about the probable effects
of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected future levels of interest rates. Our risk management
process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are recorded at fair value,
which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(e) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
11
GECS - portfolio overview
(In millions, unless otherwise noted)
Balances (a)
December 31,
2009
Consumer
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total (c)
$
$
58,831
25,208
23,190
13,485
12,808
133,522
September 30,
2009
$
$
December 31,
2009
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
$
$
952
1,187
1,698
312
318
4,467
Ratios
December 31,
2009
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
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,
2009
$
$
$
$
62,587
25,485
23,939
14,853
13,218
140,082
March 31,
2009
$
$
Allowance for losses (d)
June 30,
2009
975
1,113
1,568
301
279
4,236
$
$
831
1,147
1,575
269
250
4,072
December 31,
2008
56,974
22,256
25,286
15,343
10,309
130,168
7.8 %
1.8
3.4
0.5
3.6
4.8 %
$
$
6.8 %
2.0
3.3
0.6
2.1
4.2 %
Allowance for losses as a percent of total financing receivables
September 30,
June 30,
March 31,
2009
2009
2009
September 30,
2009
8.82 %
7.20
9.10
8.80 %
6.85
9.12
1.3 %
4.5
6.6
1.8
1.9
2.9 %
Consumer
June 30,
2009
8.73 %
6.41
9.08
$
60,753
24,441
27,645
18,168
11,541
142,548
December 31,
2009
$
$
December 31,
2008
526
1,038
1,718
249
199
3,730
7.8 %
2.1
3.4
0.6
2.2
4.7 %
1.6 %
4.4
7.0
2.1
2.1
3.1 %
$
March 31,
2009
Non earning receivables as as percent of financing receivables
September 30,
June 30,
March 31,
2009
2009
2009
1.6 %
4.7
7.3
2.3
2.5
3.3 %
December 31,
2009
Managed delinquency
Off-book delinquency
On-book delinquency
61,308
25,197
22,324
14,366
13,191
136,386
7.7 %
1.8
3.6
0.5
5.0
4.9 %
December 31,
2009
Financing receivables
June 30,
2009
0.9 %
4.7
6.8
1.6
1.9
2.9 %
March 31,
2009
8.20
6.41
8.49
$
$
383
1,051
1,700
222
226
3,582
December 31,
2008
5.5 %
1.7
2.7
0.5
1.5
3.3 %
December 31,
2008
0.6 %
4.3
6.1
1.2
2.0
2.5 %
4,552
454
841
73
645
6,565
September 30,
2009
$
$
$
130
415
602
33
98
1,278
December 31,
2009
20.9 %
261.5
201.9
427.4
49.3
68.0 %
December 31,
2009
0.9 %
6.6
10.6
0.9
3.0
3.8 %
4,768
450
749
75
477
6,519
$
$
4,878
524
818
84
289
6,593
March 31,
2009
$
$
December 31,
2008
3,874
445
833
95
212
5,459
$
$
$
122
457
645
92
102
1,418
$
$
115
473
699
103
88
1,478
$
$
December 31,
2008
57
396
658
108
66
1,285
Allowance for losses as a percent of nonearning receivables
September 30,
June 30,
March 31,
2009
2009
2009
20.4 %
247.3
209.3
401.3
58.5
65.0 %
17.0 %
218.9
192.5
320.2
86.5
61.8 %
0.8 %
7.9
11.4
2.7
3.0
4.4 %
$
66
405
616
101
50
1,238
$
December 31,
2008
13.6 %
233.3
206.2
262.1
93.9
68.3 %
Write-offs as a percent of financing receivables (e)
September 30,
June 30,
March 31,
2009
2009
2009
0.8 %
7.2
11.2
2.5
3.1
4.1 %
3,321
413
758
83
175
4,750
$
Write-offs (net) - for three months ending
September 30,
June 30,
March 31,
2009
2009
2009
December 31,
2009
$
Nonearning receivables (b)
June 30,
2009
11.5 %
254.5
224.3
267.5
129.1
75.4 %
December 31,
2008
0.4 %
6.8
9.9
2.6
2.4
3.8 %
0.4 %
5.6
8.7
1.9
1.5
3.1 %
December 31,
2008
7.43 %
8.24
7.31
(a) During the first quarter of 2009, we transferred Banque Artesia Nederland N.V. (Artesia) from CLL to Consumer. Prior-period amounts were reclassified to conform to the current-period’s presentation.
(b) Nonearning receivables are those that are 90 days or more past due (or for which collection has otherwise become doubtful). Nonearning receivables exclude loans purchased at a discount (unless they have deteriorated post acquisition). Under ASC 310, receivables,
these loans are initially recorded at fair value and accrete interest income over the estimated life of the loan based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. In addition, nonearning receivables exclude loans
which are paying currently under a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until
there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Financing receivables include impaired loans of $1,382 million at December 31, 2009
(d) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments about the
probable effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected future levels
of interest rates. Our risk management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009,
loans acquired in a business acquisition are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition.
This may result in lower reserve coverage ratios prospectively.
(e) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
12
GECS - portfolio overview
(In millions, unless otherwise noted)
Balances
December 31,
2009
Real Estate (c)
EFS
GECAS
Other
$
44,841
7,790
15,319
2,614
September 30,
2009
$
December 31,
2009
Real Estate
EFS
GECAS
Other
$
1,494
28
107
34
Ratios
December 31,
2009
Real Estate
EFS
GECAS
Other
2.8 %
1.0
1.1
2.8
December 31,
2009
Real Estate
EFS
GECAS
Other
3.3 %
0.4
0.7
1.3
45,471
8,362
15,046
3,095
September 30,
2009
$
Financing receivables (a)
June 30,
2009
$
46,018
8,506
15,096
3,324
March 31,
2009
$
Allowance for losses (d)
June 30,
2009
1,028
101
126
23
$
570
92
61
27
December 31,
2008
45,373
8,360
15,501
3,863
March 31,
2009
$
2.9 %
2.8
1.4
2.1
396
66
61
32
1.2 %
2.9
1.2
1.6
Allowance for losses as a percent of total financing receivables
September 30,
June 30,
March 31,
2009
2009
2009
2.3 %
1.2
0.8
0.7
1.2 %
1.1
0.4
0.8
46,735
8,392
15,429
4,031
$
December 31,
2008
Non earning receivables as as percent of financing receivables
September 30,
June 30,
March 31,
2009
2009
2009
2.9 %
4.3
1.4
2.5
$
December 31,
2009
0.9 %
0.8
0.4
0.8
$
301
58
60
28
December 31,
2008
1,252
78
167
72
$
$
73
67
15
2
December 31,
2009
119.3 %
35.9
64.1
47.2
December 31,
2009
0.6 %
0.7
0.4
0.7
Nonearning receivables (b)
June 30,
2009
1,320
360
211
78
$
1,325
241
204
70
March 31,
2009
December 31,
2008
$
554
241
191
61
$
Write-offs (net) - for three months ending
September 30,
June 30,
March 31,
2009
2009
2009
December 31,
2009
0.4 %
2.9
0.9
0.9
December 31,
2008
September 30,
2009
0.6 %
3.3
0.4
0.3
$
104
3
7
$
76
December 31,
2008
$
9
-
$
4
43.0 %
38.2
29.9
38.6
10
0.7 %
NM
NM
0.4
2
December 31,
2008
71.5 %
27.4
31.9
52.5
Write-offs as a percent of financing receivables (e)
September 30,
June 30,
March 31,
2009
2009
2009
0.9 %
NM
0.1
0.9
2
-
Allowance for losses as a percent of nonearning receivables
September 30,
June 30,
March 31,
2009
2009
2009
77.9 %
28.1
59.7
29.5
194
241
146
38
155.2 %
24.1
41.1
73.7
December 31,
2008
0.1 %
NM
NM
1.0
0.0 %
NM
NM
0.2
(a) Financing receivables include $6,519 million, $183 million, $167 million and $72 million of impaired loans at Real Estate, EFS, GECAS, and Other, respectively, at December 31, 2009.
(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 currently under a cash accounting basis, but classified as impaired. Recently restructured financing receivables are not considered delinquent when payments are brought current according to restructured terms but may remain classified as nonearning until there has
been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.
(c) Financing receivables included $317 million of construction loans at December 31, 2009.
(d) Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. Such estimate requires consideration of historical loss experience, adjusted for current conditions, and judgments about the probable
effects of relevant observable data, including present economic conditions such as delinquency rates, financial health of specific customers and market sectors, collateral values (including housing price indices as applicable), and the present and expected future levels of interest rates. Our risk
management process includes standards and policies for reviewing major risk exposures and concentrations, and evaluates relevant data either for individual loans or financing leases, on a portfolio basis, as appropriate. Effective January 1, 2009, loans acquired in a business acquisition are
recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the portfolio. As a result, the allowance for loan losses is not carried over at acquisition. This may result in lower reserve coverage ratios prospectively.
(e) Write-offs percent is calculated as the ratio of annualized write-offs for the quarter divided by average of financing receivables at the beginning and end of the period.
13
Consumer - allowance for losses on financing receivables
Balance
January 1,
2009
(In millions)
Consumer (c)
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Total
Total
Other (a)
Gross writeoffs
Recoveries
Balance
December 31,
2009
$
383
1,051
1,700
222
226
$
915
1,835
3,576
408
389
$
78
42
(974)
18
57
$
(519)
(2,320)
(2,817)
(556)
(465)
$
95
579
213
220
111
$
952
1,187
1,698
312
318
$
3,582
$
7,123
$
(779)
$
(6,677)
$
1,218
$
4,467
Balance
January 1,
2008
(In millions)
Consumer (c)
Non - U.S. residential mortgages
Non - U.S. installment and revolving credit
U.S. installment and revolving credit
Non - U.S. auto
Other
Provision
charged to
operations
Provision
charged to
operations
Other (b)
Gross writeoffs
Recoveries
$
246
1,371
985
324
167
$
324
1,748
3,217
376
229
$
(38)
(417)
(624)
(124)
9
$
(218)
(2,551)
(2,173)
(637)
(248)
$
69
900
295
283
69
$
3,093
$
5,894
$
(1,194)
$
(5,827)
$
1,616
Balance
December 31,
2008
383
1,051
1,700
222
226
$
3,582
(a) Other primarily included the effects of securitization activity, currency exchange and dispositions.
(b) Other primarily included the effects of securitization activity, currency exchange, dispositions and acquisitions.
(c) During the first quarter of 2009, we transferred Artesia from CLL to Consumer. Prior-period amounts were reclassified to conform to the current-period’s presentation.
14
Consumer - financing receivables by region (a)
(In millions)
December 31, 2009
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at December 31, 2009
$
-
Installment and
revolving credit
$
36,989
8,297
9,284
3,672
589
June 30, 2009
58,831
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at June 30, 2009
$
-
December 31, 2008
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at December 31, 2008
$
-
$
48,398
$
23,939
-
$
13,485
49,424
$
$
27,645
8,977
6,472
6,373
2,220
399
$
52,086
$
-
$
$
12,808
14,853
1,074
$
13,218
$
$
18,168
1,526
$
11,541
25,013
60,398
20,216
23,640
9,818
997
$
140,082
September 30, 2009
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at September 30, 2009
$
-
Installment and
revolving credit
$
38,287
8,412
10,302
3,689
618
March 31, 2009
61,308
Mortgages
U.S.
Europe
Western
Eastern
Pacific Basin
Americas
Other
$
Total at March 31, 2009
$
-
$
$
47,521
25,286
$
47,542
14,366
$
$
$
13,191
-
$
15,343
1,183
$
10,309
136,386
Total
$
4,280
4,065
544
237
$
23,364
59,903
21,751
21,251
9,248
869
Other (b)
8,924
1,845
4,214
297
63
$
1,040
Total
5,373
4,953
354
1,471
-
Auto
8,261
5,665
6,042
1,976
312
$
$
7,385
1,877
4,321
727
56
Installment and
revolving credit
$
Other (b)
-
8,858
6,509
6,274
3,361
195
34,599
7,468
12,067
2,183
657
56,974
22,324
Auto
26,469
56,064
19,043
22,867
4,693
1,032
$
130,168
Total
$
4,055
4,682
967
311
$
133,522
Total
Other (b)
-
24,171
57,593
21,174
20,463
9,346
775
5,627
4,391
421
1,705
-
10,883
2,078
4,757
346
104
$
981
Other (b)
Auto
$
Total
5,134
4,799
361
1,533
-
7,643
1,864
4,507
772
67
Installment and
revolving credit
$
$
Auto
8,750
5,894
6,973
3,605
263
$
Other (b)
6,940
1,728
4,087
691
39
Installment and
revolving credit
37,400
7,857
12,401
2,363
732
60,753
$
8,530
6,350
6,731
3,450
147
38,378
8,067
11,739
3,736
667
62,587
23,190
Auto
29,171
61,315
21,089
24,498
5,240
1,235
$
142,548
(a) During the first quarter of 2009, we transferred Artesia from CLL to Consumer. Prior-period amounts were reclassified to conform to the current-period’s presentation.
(b) Represents mainly small and medium enterprise loans.
15
Consumer - mortgage portfolio by country (a)
(In millions)
Financing
receivables
December 31, 2009
As a % of
total
U.K. (b) (d)
Australia
France (d)
Poland
Mexico
Spain
Hungary
All other
$
21,146
7,319
11,455
5,652
2,033
1,316
1,059
8,851
35.9 %
12.4
19.5
9.6
3.5
2.2
1.8
15.0
Total at December 31, 2009 (c)
$
58,831
100.0 %
Financing
receivables
June 30, 2009
As a % of
total
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
22,745
9,495
11,376
5,505
2,018
1,288
1,044
9,116
36.3 %
15.2
18.2
8.8
3.2
2.1
1.7
14.6
Total at June 30, 2009
$
62,587
100.0 %
Financing
receivables
December 31, 2008
As a % of
total
Nonearning
receivables
15.6
0.6
1.9
0.7
8.3
19.6
4.6
5.1
Delinquent more
than 30 days
%
7.7 %
Nonearning
receivables
15.8
2.4
1.6
0.5
7.3
19.7
2.2
4.8
25.2
6.5
2.9
1.6
12.8
29.4
8.6
9.7
%
13.3 %
Delinquent more
than 30 days
%
7.8 %
Nonearning
receivables
25.9
5.2
2.8
1.5
11.4
30.3
6.5
8.8
Financing
receivables
September 30, 2009
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
22,135
8,159
11,710
5,698
1,973
1,317
1,073
9,243
36.1 %
13.3
19.1
9.3
3.2
2.1
1.8
15.1
Total at September 30, 2009
$
61,308
100.0 %
Financing
receivables
March 31, 2009
%
13.2 %
As a % of
total
As a % of
total
Nonearning
receivables
16.1
0.6
1.8
0.4
7.7
21.6
3.8
4.9
Delinquent more
than 30 days
%
7.8 %
Nonearning
receivables
25.8
5.7
3.0
1.5
11.7
31.8
8.2
9.3
%
13.4 %
Delinquent more
than 30 days
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
20,004
9,797
10,527
5,020
1,865
1,236
961
7,564
35.1 %
17.2
18.5
8.8
3.3
2.2
1.7
13.3
14.1 %
2.3
1.4
0.4
5.6
17.5
1.8
4.2
23.7 %
5.0
2.5
1.3
8.9
28.1
5.0
7.9
Total at March 31, 2009
$
56,974
100.0 %
6.8 %
11.8 %
Delinquent more
than 30 days
U.K.
Australia
France
Poland
Mexico
Spain
Hungary
All other
$
21,989
9,942
11,056
5,272
1,961
1,315
1,005
8,213
36.2 %
16.4
18.2
8.7
3.2
2.2
1.7
13.5
11.0 %
2.0
1.1
0.4
4.8
13.6
1.0
3.4
21.0 %
4.9
2.0
1.2
8.3
23.2
3.0
6.5
Total at December 31, 2008
$
60,753
100.0 %
5.5 %
10.6 %
(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 December 31, 2009, we had in repossession stock approximately 1,200 houses in the U.K., which had a value of approximately $0.2 billion.
(c) At December 31, 2009, net of credit insurance, approximately 24% of this portfolio comprised loans with introductory, below market rates that are scheduled to adjust at future dates; with high loan-to-value ratios at inception; whose terms permitted
interest-only payments; or whose terms resulted in negative amortization. At origination, we underwrite loans with an adjustable rate to the reset value. 82% 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 18.3% and have loan-to-value at origination of 74%. At December 31, 2009, 1% (based on dollar values) of these loans in our U.K. and France portfolios have been restructured.
(d) Our U.K. and France portfolios have reindexed loan-to-value ratios of 82% and 68%, respectively.
16
Commercial - allowance for losses on financing receivables
Balance
January 1,
2009
(In millions)
CLL (c)
Americas
Europe
Asia
Other
$
Real Estate
843
288
163
2
Provision
charged to
operations
$
1,399
570
257
6
Gross
write-offs
Other (a)
$
(39)
(16)
3
1
$
(1,117)
(331)
(203)
(1)
Balance
December 31,
2009
Recoveries
$
93
33
24
-
$
301
1,442
13
(264)
EFS
58
33
4
(67)
-
28
GECAS
60
69
(4)
(18)
-
107
Total
$
Balance
January 1,
2008
(In millions)
CLL (c)
Americas
Europe
Asia
Other
$
Real Estate
EFS
GECAS
Total
1,715
$
471
232
226
3
$
3,776
$
Provision
charged to
operations
$
909
309
152
2
(38)
$
Gross
write-offs
Other (b)
$
(2,001)
111
(32)
34
(4)
$
(728)
(247)
(256)
-
168
135
9
(12)
19
36
3
-
8
53
1,127
$
1,596
$
121
2
1,179
544
244
8
$
(1,244)
$
$
80
26
7
1
$
1
$
3,604
Balance
December 31,
2008
Recoveries
(1)
$
152
1,494
843
288
163
2
301
-
58
-
60
115
$
1,715
(a) Other primarily included the effects of securitization activity, currency exchange and dispositions.
(b) Other primarily included the effects of securitization activity, currency exchange, dispositions and acquisitions.
(c) During the first quarter of 2009, we transferred Artesia from CLL to Consumer. Prior-period amounts were reclassified to conform to the current-period’s presentation.
17
Commercial - real estate debt overview
(In millions)
December 31,
2009
Region
September 30,
2009
Financing receivables
June 30,
2009
March 31,
2009
December 31,
2008
U.S.
Europe
Pacific Basin
Americas
$
27,008
5,807
3,235
8,791
$
27,542
5,986
3,133
8,810
$
28,231
5,953
3,105
8,729
$
28,669
5,435
3,124
8,145
$
28,887
5,895
3,522
8,431
Total (a)
$
44,841
$
45,471
$
46,018
$
45,373
$
46,735
December 31,
2009
Vintage profile
Originated in
pre-2006
2006
2007
2008
2009
$
5,786
8,038
13,871
16,990
156
$
44,841
Property type
September 30,
2009
Financing receivables
June 30,
2009
March 31,
2009
December 31,
2008
Office buildings
Owner occupied
Apartment buildings
Hotel properties
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Other
$
11,121
8,276
7,649
5,152
4,349
4,302
1,395
122
2,475
$
11,171
8,431
7,932
5,153
4,383
4,377
1,389
128
2,507
$
11,122
8,539
8,330
5,309
4,383
4,371
1,341
133
2,490
$
10,905
8,607
8,329
5,149
4,304
4,146
1,326
124
2,483
$
11,591
8,803
8,708
5,528
4,410
3,905
1,334
126
2,330
Total (a)
$
44,841
$
45,471
$
46,018
$
45,373
$
46,735
December 31,
2009
Contractual maturities
Due in
2010 and prior (b)
2011
2012
2013
2014 and later
Total
Total
December 31,
2009
$
12,596
10,050
6,942
2,796
12,457
$
44,841
(a) Represents total gross financing receivables for Real Estate only.
(b) Includes $1,234 million relating to loans with contractual maturities prior to January 1, 2010.
18
Commercial - real estate equity overview (a)
(In millions, unless otherwise noted)
Region
December 31,
2009
Equity
June 30,
2009
September 30,
2009
March 31,
2009
December 31,
2008
U.S.
Europe
Pacific Basin
Americas
$
9,892
11,705
7,966
3,027
$
10,067
12,384
7,902
3,031
$
10,055
12,120
7,595
3,006
$
10,173
11,142
7,320
2,785
$
10,304
12,025
7,963
2,985
Total
$
32,590
$
33,384
$
32,776
$
31,420
$
33,277
Vintage profile (e)
Originated in
pre-2006
2006
2007
2008
2009
Total
December 31,
2009
$
$
5,942
9,621
14,043
2,238
746
32,590
Property type
December 31,
2009
Equity
June 30,
2009
September 30,
2009
March 31,
2009
December 31,
2008
Office buildings
Apartment buildings
Warehouse properties
Retail facilities
Mixed use
Parking facilities
Owner occupied
Hotel properties
Other
$
16,340
4,747
3,869
3,194
1,723
787
724
421
785
$
16,714
4,708
4,054
3,244
1,829
841
714
424
856
$
16,543
4,585
3,994
3,162
1,802
834
687
357
812
$
15,637
4,442
3,772
2,884
1,759
837
669
360
1,060
$
16,342
4,445
3,890
3,082
1,902
851
668
373
1,724
Total
$
32,590
$
33,384
$
32,776
$
31,420
$
33,277
Key metrics
December 31,
2009
Owned real estate (b)
$
Net operating income (annualized)
Net operating income yield (c)
$
End of period vacancies (d)
Foreclosed properties
28,365
September 30,
2009
$
1,628
$
5.7 %
20.6 %
$
779
29,005
June 30,
2009
$
1,621
$
5.6 %
20.7 %
$
729
28,591
March 31,
2009
$
1,606
$
5.7 %
20.3 %
$
508
27,581
December 31,
2008
$
1,569
$
5.6 %
18.7 %
$
254
28,971
1,726
5.7 %
17.5 %
$
64
(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.
19
Equipment leased to others (ELTO), net of depreciation and amortization overview
(In millions)
December 31, 2009
Collateral type
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Mobile equipment
All other
$
Total at December 31, 2009
$
June 30, 2009
Collateral type
GECAS
3,246
11,509
2,563
1,696
1,875
967
$
21,856
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Mobile equipment
All other
$
Total at June 30, 2009
$
December 31, 2008
Collateral type
$
Total at December 31, 2008
$
29,737
324
35
-
$
30,096
$
GECAS
3,009
12,892
2,542
2,039
1,971
1,207
$
23,660
$
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Mobile equipment
All other
EFS
$
29,438
$
952
$
952
$
30,019
372
30
-
$
30,421
$
$
29,306
$
$
1
2
15
28
$
Consumer
796
$
796
$
-
$
1
1
17
30
$
Consumer
777
$
777
$
-
CLL
Aircraft
Vehicles
Railroad rolling stock
Construction and manufacturing
Mobile equipment
All other
$
52,932
Total at September 30, 2009
$
March 31, 2009
Collateral type
GECAS
3,245
12,762
2,575
1,813
1,882
1,215
$
23,492
$
CLL
33,028
12,903
2,914
2,040
2,002
2,020
Aircraft
Vehicles (a)
Railroad rolling stock
Construction and manufacturing
Mobile equipment
All other
$
54,907
Total at March 31, 2009
$
EFS
30,287
328
28
-
$
30,643
$
GECAS
3,277
13,024
2,589
2,059
1,994
1,036
$
23,979
$
Consumer
793
$
793
$
$
29,819
$
$
33,532
12,774
2,903
1,814
1,913
2,023
$
54,959
12
1
3
15
EFS
29,412
377
30
-
-
Total
31
Consumer
800
$
800
$
-
Total
$
32,689
13,037
2,966
2,059
2,025
1,852
$
54,628
13
1
16
30
Total
$
32,288
18,149
2,915
2,333
2,022
1,863
$
59,570
22
2
25
49
September 30, 2009
Collateral type
32,983
11,519
2,887
1,697
1,912
1,934
Total
11
EFS
28,893
383
30
-
-
Total
10
EFS
GECAS
3,395
18,127
2,532
2,333
1,990
1,061
Consumer
(a) Decline from December 31, 2008, reflects the effects of the deconsolidation of Penske Truck Leasing during the first quarter of 2009.
20
Commercial - aircraft asset details (a)
December 31,
2009
Collateral type (In millions)
September 30,
2009
Loans and leases
June 30,
2009
March 31,
2009
December 31,
2008
December 31,
2009
Airline regions (In millions)
September 30,
2009
Loans and leases
June 30,
2009
March 31,
2009
December 31,
2008
Narrow-body aircraft
Wide-body aircraft
Cargo
Regional jets
Engines
$
22,882
8,532
3,030
5,931
2,480
$
22,927
8,710
2,991
6,023
2,385
$
22,663
8,695
3,027
6,100
2,231
$
22,199
9,889
1,719
6,144
2,370
$
22,266
9,201
1,744
6,218
2,131
U.S.
Europe
Pacific Basin
Americas
Other
$
14,700
9,642
6,481
6,099
5,933
$
14,514
9,858
7,554
5,708
5,402
$
14,606
9,705
7,227
5,273
5,905
$
13,781
9,866
7,023
5,332
6,319
$
13,865
10,055
7,123
4,963
5,554
Total
$
42,855
$
43,036
$
42,716
$
42,321
$
41,560
Total
$
42,855
$
43,036
$
42,716
$
42,321
$
41,560
GECS aircraft
Vintage proflie
December 31,
2009
0-5 years
6-10 years
11 - 15 years
15+ years
$
17,357
14,462
4,321
4,235
Total (b)
$
40,375
(a) Includes loans and financing leases of $13,254 million, $12,927 million, $ 12,901 million, $13,189 million and $13,078 million (less non-aircraft loans and financing leases of $136 million, $178 million, $204 million, $280 million and $411 million) and ELTO
of $29,737 million, $30,287 million, $30,019 million, $29,412 million and $28,893 million at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009 and December 31, 2008, respectively, related to commercial aircraft at Aviation Financial Services.
(b) Excludes aircraft engine loans and leases of $2,480 million at December 31, 2009.
21
Other key areas
22
Investment securities
GECS (In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed (a)
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
Amortized
cost
$
Retained interests (b)
Equity
Available-for-sale
Trading
Total
GECC (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
$
$
Equity
Available-for-sale
Trading
$
$
981
34
79
89
48
59
63
46
$
(756)
(246)
(766)
(440)
(305)
(50)
(29)
-
Estimated
fair value
$
23,635
1,794
3,318
2,702
2,737
1,840
2,936
2,674
Amortized
cost
$
22,183
1,556
5,326
2,910
3,173
1,441
1,300
739
At December 31, 2008
Gross
Gross
unrealized
unrealized
gains
losses
$
512
19
70
14
3
14
61
65
$
(2,477)
(94)
(1,052)
(788)
(691)
(166)
(19)
(100)
Estimated
fair value
$
20,218
1,481
4,344
2,136
2,485
1,289
1,342
704
8,479
392
(40)
8,831
6,395
113
(152)
6,356
489
720
242
-
(5)
-
726
720
629
388
24
-
(160)
-
493
388
52,517
Amortized
cost
Retained interests (b)
Total
23,410
2,006
4,005
3,053
2,994
1,831
2,902
2,628
At December 31, 2009
Gross
Gross
unrealized
unrealized
gains
losses
4,954
887
2,999
1,599
2,786
994
2,461
1,865
$
2,033
$
(2,637)
At December 31, 2009
Gross
Gross
unrealized
unrealized
gains
losses
$
83
3
21
5
37
18
15
$
-
(236)
(216)
(722)
(302)
(298)
(26)
(25)
-
$
51,913
Estimated
fair value
$
4,801
674
2,298
1,302
2,525
986
2,451
1,865
$
46,040
Amortized
cost
$
4,456
915
4,228
1,664
2,922
608
936
26
$
895
$
(5,699)
At December 31, 2008
Gross
Gross
unrealized
unrealized
gains
losses
$
54
5
9
2
6
2
3
$
(637)
(70)
(976)
(509)
(668)
(23)
(15)
-
$
41,236
Estimated
fair value
$
3,873
850
3,261
1,155
2,256
591
923
29
7,252
362
(21)
7,593
5,144
73
(136)
5,081
885
720
239
-
(3)
-
1,121
720
1,023
388
22
-
(134)
-
911
388
27,402
$
783
$
(1,849)
$
26,336
$
22,310
$
176
$
(3,168)
$
19,318
(a) Substantially collateralized by U.S. mortgages.
(b) Includes $1,918 million and $1,752 million of retained interests at December 31, 2009 and December 31, 2008, respectively, accounted for in accordance with FASB ASC 815, derivatives and hedging.
23
Investment securities - aging of unrealized losses
GECS (In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
At December 31 2009 - 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
GECC (In millions)
Debt
U.S. corporate
State and municipal
Residential mortgage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
$
3,146
592
118
167
126
374
399
-
$
(88)
(129)
(14)
(5)
(11)
(18)
(4)
-
$
4,880
535
1,678
1,293
1,342
481
224
-
$
#
(668)
(117)
(752)
(435)
(294)
(32)
(25)
-
At December 31, 2008 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
$
$
(1,108)
(44)
(107)
(184)
(419)
(106)
(4)
-
$
5,629
278
1,614
1,218
1,063
335
275
150
$
(1,369)
(50)
(945)
(604)
(272)
(60)
(15)
(100)
208
(16)
27
(24)
1,403
(71)
274
(81)
92
(2)
10
(3)
265
(156)
9
(4)
5,222
$
(287)
$
10,470
$
(2,350)
$
At December 31 2009 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
$
6,602
570
1,355
774
1,064
454
88
-
601
229
70
60
310
368
-
$
(20)
(120)
(4)
(7)
(14)
(3)
-
$
1,365
421
1,561
1,015
1,311
346
193
-
$
(216)
(96)
(718)
(302)
(291)
(12)
(22)
-
12,575
$
(2,199)
$
10,845
$
(3,500)
At December 31, 2008 - In loss position for
Less than 12 months
12 months or more
Gross
Gross
Estimated
unrealized
Estimated
unrealized
fair value
losses
fair value
losses
$
1,152
302
1,216
285
903
60
-
$
(397)
(21)
(64)
(85)
(406)
(7)
-
$
1,253
278
1,534
870
1,031
265
275
-
$
(240)
(49)
(912)
(424)
(262)
(16)
(15)
-
Retained interests
13
(1)
4
(20)
1,246
(61)
238
(75)
Equity
22
(2)
8
(1)
200
(132)
6
(2)
Total
$
1,673
$
(171)
$
6,224
$
(1,678)
$
5,364
$
(1,173)
$
5,750
$
(1,995)
24
GECS - FAS 157 fair value measurement
At December 31, 2009
Assets
(In millions)
Investment securities
Debt
U.S. corporate
State and municipal
Residential mortage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
Level 2
Level 1
$
722
159
1,277
85
$
At December 31, 2008
FIN 39
netting
Level 3
19,669
1,621
3,195
2,647
860
692
1,483
2,307
Retained interests
-
-
Equity
Available-for-sale
Trading
523
720
184
-
$
3,244
173
123
55
1,877
989
176
282
8,831
$
19
-
-
-
726
720
10,529
771
(3,618)
Other
-
-
595
-
3,486
$
43,187
(In millions)
Level 2
Level 1
$
Other
Total
17,135
$
(3,618)
$
Level 1
$
Level 2
-
$
30
69
496
5
17,172
1,234
4,141
2,070
880
562
422
515
-
-
458
83
12
305
-
$
$
-
$
32
$
7,066
220
$
$
220
$
3,046
247
173
66
1,605
658
424
184
23
-
-
493
388
(7,088)
595
-
288
551
$
45,710
$
20,218
1,481
4,344
2,136
2,485
1,289
1,342
704
6,356
1,094
1,141
$
-
18,109
$
-
6,356
-
60,190
$
Net balance
14,427
12,115
$
(7,088)
839
$
54,190
At December 31, 2008
FIN 39
netting
Level 3
7,034
FIN 39
netting
Level 3
7,682
At December 31, 2009
Liabilities
Derivatives
$
23,635
1,794
3,318
2,702
2,737
1,840
2,936
2,674
8,831
-
$
$
-
Derivatives
Total
Net balance
(3,630)
Net balance
$
$
(3,630)
3,624
Level 1
$
32
$
3,656
Level 2
2
$
$
11,517
$
323
2
$
11,840
FIN 39
netting
Level 3
165
$
$
165
(7,252)
Net balance
$
$
(7,252)
4,432
323
$
4,755
25
GECC - FAS 157 fair value measurement
At December 31, 2009
Assets
(In millions)
Investment securities
Debt
U.S. corporate
State and municipal
Residential mortage-backed
Commercial mortgage-backed
Asset-backed
Corporate - non-U.S.
Government - non-U.S.
U.S. government and federal agency
Level 2
Level 1
$
1,276
159
1,277
85
$
At December 31, 2008
FIN 39
netting
Level 3
1,871
501
2,254
1,251
719
51
1,023
1,780
Retained interests
-
-
Equity
Available-for-sale
Trading
437
720
667
-
$
1,654
173
44
51
1,806
776
151
7,593
$
17
-
-
395
83
498
305
7,251
-
595
-
-
-
595
-
(In millions)
Level 2
Level 1
$
Other
Total
$
(3,611)
$
34,182
$
1,602
$
-
$
$
-
$
32
$
6,870
219
$
$
219
$
1,640
247
118
57
1,580
472
417
-
$
-
Net balance
$
3,873
850
3,261
1,155
2,256
591
923
29
-
5,081
18
-
911
388
17,721
544
(7,054)
288
551
-
26,095
-
$
10,725
$
(7,054)
11,211
839
$
31,368
At December 31, 2008
FIN 39
netting
Level 3
6,838
FIN 39
netting
Level 3
5,081
At December 31, 2009
Liabilities
Derivatives
13,311
1,708
603
3,113
1,098
676
50
11
24
1,121
720
Other
$
$
(3,611)
20,528
525
30
69
495
5
-
451
$
$
-
10,411
3,954
4,801
674
2,298
1,302
2,525
986
2,451
1,865
Level 2
7,593
-
$
$
Level 1
-
Derivatives
Total
Net balance
(3,623)
Net balance
$
$
(3,623)
3,434
Level 1
$
32
$
3,466
Level 2
2
$
$
10,810
$
323
2
$
11,133
FIN 39
netting
Level 3
162
$
$
162
(7,218)
Net balance
$
$
(7,218)
3,756
323
$
4,079
26
GECS - investments measured at fair value in earnings (a)
Asset balances at
December 31,
2009
Investment type (In millions)
Equities - trading
$
720
December 31,
2008
$
388
Net earnings impact
for year ending
December 31, 2009
$
351
Retained interests
1,939
1,772
119
Assets held for sale (LOCOM)
3,708
5,038
(197)
Assets of businesses held for sale (LOCOM)
125
2,669
(3)
Investment companies
477
458
(11)
Total
$
6,969
$
10,325
$
259
(a) Excludes derivatives portfolio.
27
Capital Finance ending net investment (ENI)
(In millions)
December 31,
2009
December 31,
2008
GECS total assets
$
$
Less: assets of discontinued operations
649.4
660.9
1.5
1.7
74.9
85.5
Less: GECS headquarters ENI
Capital Finance ENI
79.4
493.6
48.5
525.2
Less: effects of currency exchange rates
Capital Finance ENI, excluding the effects of currency exchange rates
21.4
472.2
525.2
Less: non-interest bearing liabilities
$
$
28
GECS - funding
(In billions)
Commercial paper (a)
Long-term debt (b)
Deposits/brokered CD's
Others
December 31,
2009
$
Total debt, excluding FIN 46
Debt of VIE's
Total debt
$
47.3
397.1
38.9
13.9
September 30,
2009
$
50.0
404.6
36.8
13.0
June 30,
2009
$
March 31,
2009
50.1
400.5
36.5
10.9
$
57.5
386.5
34.0
9.9
December 31,
2008
$
71.8
381.1
36.9
18.8
497.2
504.4
498.0
487.9
508.6
3.1
4.0
4.6
5.2
6.1
500.3
$
508.4
$
502.6
$
493.1
$
514.6
Metrics
Bank lines
$51.7
$52.3
$55.4
$58.3
$60.0
Commercial paper coverage (c)
109.0 %
104.6 %
110.6 %
101.4 %
Cash and equivalents
$64.4
$56.9
$50.0
$45.2
$37.5
LT debt < 1 year (d)
$70.1
$69.1
$82.2
$78.7
$69.4
83.6 %
(a) Excludes $2.4 billion, $2.9 billion, $3.0 billion, $3.5 billion and $3.7 billion asset-backed commercial paper which relates entirely
to obligations of consolidated, liquidating securitization entities at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009
and December 31, 2008 , respectively.
(b) Includes $59 billion, $55 billion, $48 billion, $37 billion and $13 billion of long term debt issued under the TLGP program at December 31, 2009,
September 30, 2009, June 30, 2009, March 31, 2009 and December 31, 2008, respectively.
(c) Commercial paper coverage represents bank lines as a percentage of the commercial paper balance as of the end of the relevant period.
(d) Excludes $0.2 billion, $0.2 billion, $0.2 billion, $0.3 billion and $0.3 billion of asset-backed senior notes, issued by consolidated, liquidating
securitization entities at December 31, 2009, Septebmer 30, 2009, June 30, 2009, March 31, 2009, and December 31, 2008, respectively.
29
Debt to equity ratio
GECS
(In billions)
Debt
Equity (a)
December 31,
2009
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
$500.3
70.8
$508.4
70.7
$502.6
67.9
$493.1
60.8
$514.6
53.3
7.1:1
7.2:1
7.4:1
8.1:1
9.7:1
$500.3
(7.7)
(64.4)
428.2
$508.4
(7.7)
(56.9)
443.7
$502.6
(7.7)
(50.0)
444.8
$493.1
(7.7)
(45.2)
440.2
$514.6
(7.7)
(37.5)
469.4
Equity (a)
Add: hybrid debt
Adjusted equity
70.8
7.7
78.5
70.7
7.7
78.4
67.9
7.7
75.6
60.8
7.7
68.5
53.3
7.7
61.0
Adjusted debt to equity ratio
5.5:1
5.7:1
5.9:1
6.4:1
7.7:1
Debt to equity ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
GECC
(In billions)
Debt
Equity (a)
December 31,
2009
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
$496.6
73.7
$504.1
73.2
$498.1
71.7
$489.2
65.6
$510.4
58.2
6.7:1
6.9:1
6.9:1
7.5:1
8.8:1
$496.6
(7.7)
(63.7)
425.2
$504.1
(7.7)
(56.3)
440.1
$498.1
(7.7)
(49.1)
441.2
$489.2
(7.7)
(44.0)
437.5
$510.4
(7.7)
(36.4)
466.3
Equity (a)
Add: hybrid debt
Adjusted equity
73.7
7.7
81.4
73.2
7.7
80.9
71.7
7.7
79.4
65.6
7.7
73.4
58.2
7.7
65.9
Adjusted debt to equity ratio
5.2:1
5.4:1
5.6:1
6.0:1
7.1:1
Debt to equity ratio
Debt
Less: hybrid debt
Less: cash and equivalents
Adjusted debt
(a) Equity represents amounts available to GECS and GECC shareholders, respectively, excluding noncontrolling interests.
30
Tangible common equity to tangible assets ratio
GECS
(In billions)
December 31,
2009
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
Total equity (a)
Less: Goodwill and other intangibles
$
70.8
(32.4)
$
70.7
(32.0)
$
67.9
(31.7)
$
60.8
(28.2)
$
53.3
(29.0)
Tangible common equity
$
38.4
$
38.6
$
36.2
$
32.5
$
24.3
Total assets
Less: Goodwill and other intangibles
$
649.4
(32.4)
$
658.3
(32.0)
$
650.6
(31.7)
$
635.4
(28.2)
$
660.9
(29.0)
Tangible assets
$
617.0
$
626.3
$
618.9
$
607.1
$
631.9
Tangible common equity to tangible assets
6.2 %
6.2 %
5.8 %
5.4 %
3.8 %
Tier 1 common ratio (b)
6.6 %
6.5 %
6.4 %
6.2 %
4.7 %
GECC
(In billions)
December 31,
2009
September 30,
2009
June 30,
2009
March 31,
2009
December 31,
2008
Total equity (a)
Less: Goodwill and other intangibles
$
73.7
(31.8)
$
73.2
(31.4)
$
71.7
(31.1)
$
65.6
(27.7)
$
58.2
(28.4)
Tangible common equity
$
41.9
$
41.8
$
40.6
$
38.0
$
29.8
Total assets
Less: Goodwill and other intangibles
$
622.3
(31.8)
$
630.8
(31.4)
$
625.5
(31.1)
$
612.3
(27.7)
$
637.4
(28.4)
Tangible assets
$
590.5
$
599.4
$
594.5
$
584.7
$
609.0
Tangible common equity to tangible assets
7.1 %
7.0 %
6.8 %
6.5 %
4.9 %
Tier 1 common ratio (b)
7.7 %
7.5 %
7.4 %
7.2 %
5.7 %
(a) Equity represents amounts available to GECS and GECC shareholders, respectively, excluding noncontrolling interests.
(b) Estimated based on SCAP requirements.
31
Appendix
32
Glossary
Term
Definition
Borrowing
Financial liability (short or long-term) that obligates us to repay cash or another financial asset to another entity.
Cash equivalents
Highly liquid debt instruments with original maturities of three months or less, such as commercial paper. Typically included with cash for
reporting purposes, unless designated as available-for-sale and included with investment securities.
Cash flow hedges
Qualifying derivative instruments that we use to protect ourselves against exposure to variability in future cash flows. The exposure may
be associated with an existing asset or liability, or with a forecasted transaction. See "Hedge."
Commercial paper
Unsecured, unregistered promise to repay borrowed funds in a specified period ranging from overnight to 270 days.
Derivative instrument
A financial instrument or contract with another party (counterparty) that is designed to meet any of a variety of risk management
objectives, including those related to fluctuations in interest rates, currency exchange rates or commodity prices. Options, forwards and
swaps are the most common derivative instruments we employ. See "Hedge."
Discontinued operations
Certain businesses we have sold or committed to sell within the next year and therefore will no longer be part of our ongoing operations.
The net earnings, assets and liabilities, and cash flows of such businesses are separately classified on our Statement of Earnings and
Statement of Financial Position for all periods presented.
Ending Net Investment (ENI)
The total capital we have invested in the financial services business. It is the sum of short-term borrowings, long-term borrowings and
equity (excluding noncontrolling interests) adjusted for unrealized gains and losses on investment securities and hedging instruments.
Alternatively, it is the amount of assets of continuing operations less the amount of non-interest bearing liabilities.
Equipment leased to others
Rental equipment we own that is available to rent and is stated at cost less accumulated depreciation.
Fair value hedge
Qualifying derivative instruments that we use to reduce the risk of changes in the fair value of assets, liabilities or certain types of firm
commitments. Changes in the fair values of derivative instruments that are designated and effective as fair value hedges are recorded in
earnings, but are offset by corresponding changes in the fair values of the hedged items. See "Hedge."
Financing receivables
Investment in contractual loans and financing leases due from customers (not investment securities).
Goodwill
The premium paid for acquisition of a business. Calculated as the purchase price less the fair value of net assets acquired (net assets are
identified tangible and intangible assets, less liabilities assumed).
Hedge
A technique designed to eliminate risk. Often refers to the use of derivative financial instruments to offset changes in interest rates,
currency exchange rates or commodity prices, although many business positions are "naturally hedged" - for example, funding a U.S.
fixed-rate investment with U.S. fixed-rate borrowings is a natural interest rate hedge.
33
Glossary
Term
Definition
Intangible asset
A non-financial asset lacking physical substance, such as goodwill, patents, licenses, trademarks and customer relationships.
Interest rate swap
Agreement under which two counterparties agree to exchange one type of interest rate cash flow for another. In a typical
arrangement, one party periodically will pay a fixed amount of interest, in exchange for which that party will receive variable
payments computed using a published index. See "Hedge."
Investment securities
Generally, an instrument that provides an ownership position in a corporation (a stock), a creditor relationship with a corporation or
governmental body (a bond), rights to contractual cash flows backed by pools of financial assets or rights to ownership such as those
represented by options, subscription rights and subscription warrants.
Managed receivables
Total receivable amounts on which we continue to perform billing and collection activities, including receivables that have been sold
with and without credit recourse and are no longer reported on our Statement of Financial Position.
Net operating income
Represents operating income less operating expenses for owned real estate properties.
Retained interest
A portion of a transferred financial asset retained by the transferor that provides rights to receive portions of the cash inflows from
that asset.
Securitization
A process whereby loans or other receivables are packaged, underwritten and sold to investors. In a typical transaction, assets are
sold to a special purpose entity, which purchases the assets with cash raised through issuance of beneficial interests (usually debt
instruments) to third-party investors. Whether or not credit risk associated with the securitized assets is retained by the seller depends
on the structure of the securitization. See "Variable interest entity."
Variable interest entity (VIE)
Entity defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810 (FASB Interpretation 46
(Revised)), and that must be consolidated by its primary beneficiary. A variable interest entity has one or both of the following
characteristics: (1) its equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated
financial support from other parties, or (2) as a group, the equity investors lack one or more of the following characteristics: (a)
direct/indirect ability to make decisions, (b) obligation to absorb expected losses, or (c) right to receive expected residual returns.
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