FORM
10-Q
|
(Mark
One)
|
|||||
þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
||||
THE
SECURITIES EXCHANGE ACT OF 1934
|
|||||
For
the quarterly period ended June
30, 2009
|
|||||
OR
|
|||||
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
|
||||
For
the transition period from ___________to ___________
|
|||||
_____________________________
Commission
file number 1-6461
_____________________________
|
|||||
GENERAL ELECTRIC CAPITAL
CORPORATION
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
13-1500700
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
3135
Easton Turnpike, Fairfield, Connecticut
|
06828-0001
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer þ
|
Smaller
reporting company ¨
|
Part
I – Financial Information
|
Page
|
||
Item
1.
|
Financial
Statements
|
3
|
|
Condensed Statement of Current
and Retained Earnings
|
3
|
||
Condensed Statement of Financial
Position
|
4
|
||
Condensed Statement of Cash
Flows
|
5
|
||
Notes to Condensed, Consolidated
Financial Statements (Unaudited)
|
6
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
39
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
60
|
|
Item
4.
|
Controls
and Procedures
|
60
|
|
Part
II – Other Information
|
|||
Item
6.
|
Exhibits
|
60
|
|
Signatures
|
61
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
||||||||||||
Revenues
from services (Note 9)
|
$
|
12,357
|
$
|
17,621
|
$
|
25,693
|
$
|
34,377
|
||||
Sales
of goods
|
205
|
528
|
478
|
895
|
||||||||
Total revenues
|
12,562
|
18,149
|
26,171
|
35,272
|
||||||||
Costs
and expenses
|
||||||||||||
Interest
|
4,436
|
6,267
|
9,526
|
12,346
|
||||||||
Operating
and administrative
|
3,454
|
4,834
|
7,312
|
9,366
|
||||||||
Cost
of goods sold
|
164
|
461
|
388
|
778
|
||||||||
Investment
contracts, insurance losses and
|
||||||||||||
insurance annuity
benefits
|
45
|
122
|
118
|
265
|
||||||||
Provision
for losses on financing receivables
|
2,815
|
1,470
|
5,137
|
2,803
|
||||||||
Depreciation
and amortization
|
1,939
|
2,136
|
4,112
|
4,257
|
||||||||
Total costs and
expenses
|
12,853
|
15,290
|
26,593
|
29,815
|
||||||||
Earnings
(loss) from continuing operations before
|
||||||||||||
income taxes
|
(291
|
)
|
2,859
|
(422
|
)
|
5,457
|
||||||
Benefit
(provision) for income taxes
|
695
|
(46
|
)
|
1,850
|
(127
|
)
|
||||||
Earnings
from continuing operations
|
404
|
2,813
|
1,428
|
5,330
|
||||||||
Loss
from discontinued operations, net of taxes (Note 2)
|
(194
|
)
|
(336
|
)
|
(197
|
)
|
(382
|
)
|
||||
Net
earnings
|
210
|
2,477
|
1,231
|
4,948
|
||||||||
Less
net earnings attributable to noncontrolling interests
|
29
|
63
|
79
|
99
|
||||||||
Net
earnings attributable to GECC
|
181
|
2,414
|
1,152
|
4,849
|
||||||||
Dividends
|
−
|
(889
|
)
|
−
|
(2,019
|
)
|
||||||
Retained
earnings at beginning of period(a)
|
46,468
|
41,818
|
45,497
|
40,513
|
||||||||
Retained
earnings at end of period
|
$
|
46,649
|
$
|
43,343
|
$
|
46,649
|
$
|
43,343
|
||||
Amounts
attributable to GECC
|
||||||||||||
Earnings
from continuing operations
|
$
|
375
|
$
|
2,750
|
$
|
1,349
|
$
|
5,231
|
||||
Loss
from discontinued operations, net of taxes
|
(194
|
)
|
(336
|
)
|
(197
|
)
|
(382
|
)
|
||||
Net
earnings attributable to GECC
|
$
|
181
|
$
|
2,414
|
$
|
1,152
|
$
|
4,849
|
||||
(a)
|
Included
a cumulative effect adjustment to increase retained earnings by $25
million in 2009.
|
||||
See
Note 3 for other-than-temporary impairment amounts.
|
|||||
See
accompanying notes.
|
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
||||
(Unaudited)
|
||||||
Assets
|
||||||
Cash
and equivalents
|
$
|
49,141
|
$
|
36,430
|
||
Investment
securities (Note 3)
|
20,817
|
19,318
|
||||
Inventories
|
73
|
77
|
||||
Financing
receivables – net (Note 4)
|
358,006
|
370,592
|
||||
Other
receivables
|
21,784
|
22,175
|
||||
Property,
plant and equipment, less accumulated amortization of
$26,315
|
||||||
and $29,026
|
58,618
|
64,043
|
||||
Goodwill
(Note 5)
|
27,160
|
25,204
|
||||
Other
intangible assets – net (Note 5)
|
3,541
|
3,174
|
||||
Other
assets
|
84,849
|
84,201
|
||||
Assets
of businesses held for sale
|
232
|
10,556
|
||||
Assets
of discontinued operations (Note 2)
|
1,462
|
1,640
|
||||
Total
assets
|
$
|
625,683
|
$
|
637,410
|
||
Liabilities
and equity
|
||||||
Short-term
borrowings (Note 6)
|
$
|
168,029
|
$
|
188,601
|
||
Accounts
payable
|
13,184
|
14,863
|
||||
Long-term
borrowings (Note 6)
|
330,067
|
321,755
|
||||
Investment
contracts, insurance liabilities and insurance annuity
benefits
|
9,526
|
11,403
|
||||
Other
liabilities
|
24,058
|
30,629
|
||||
Deferred
income taxes
|
5,961
|
8,112
|
||||
Liabilities
of businesses held for sale
|
196
|
636
|
||||
Liabilities
of discontinued operations (Note 2)
|
913
|
799
|
||||
Total
liabilities
|
551,934
|
576,798
|
||||
Capital
stock
|
56
|
56
|
||||
Accumulated other comprehensive
income – net(a)
|
||||||
Investment
securities
|
(1,497
|
)
|
(2,013
|
)
|
||
Currency translation
adjustments
|
370
|
(1,337
|
)
|
|||
Cash flow hedges
|
(1,937
|
)
|
(3,253
|
)
|
||
Benefit plans
|
(376
|
)
|
(367
|
)
|
||
Additional
paid-in capital
|
28,419
|
19,671
|
||||
Retained
earnings
|
46,649
|
45,472
|
||||
Total
GECC shareowner’s equity
|
71,684
|
58,229
|
||||
Noncontrolling
interests(b)
|
2,065
|
2,383
|
||||
Total
equity
|
73,749
|
60,612
|
||||
Total
liabilities and equity
|
$
|
625,683
|
$
|
637,410
|
||
(a)
|
The
sum of accumulated other comprehensive income − net was
$(3,440) million and $(6,970) million at June 30, 2009 and December 31,
2008, respectively.
|
|
(b)
|
Included
accumulated other comprehensive income attributable to noncontrolling
interests of $(120) million and $(181) million at June 30, 2009 and
December 31, 2008, respectively.
|
Six
months ended
June
30
|
||||||
(In
millions)
|
2009
|
2008
|
||||
Cash
flows – operating activities
|
||||||
Net
earnings attributable to GECC
|
$
|
1,152
|
$
|
4,849
|
||
Loss
from discontinued operations
|
197
|
382
|
||||
Adjustments
to reconcile net earnings attributable to GECC
|
||||||
to cash provided from operating
activities
|
||||||
Depreciation and amortization
of property, plant and equipment
|
4,112
|
4,257
|
||||
Increase (decrease) in accounts
payable
|
(1,789
|
)
|
1,949
|
|||
Provision for losses on
financing receivables
|
5,137
|
2,803
|
||||
All other operating
activities
|
(11,484
|
)
|
(1,851
|
)
|
||
Cash
from (used for) operating activities – continuing
operations
|
(2,675
|
)
|
12,389
|
|||
Cash
from (used for) operating activities – discontinued
operations
|
(26
|
)
|
474
|
|||
Cash
from (used for) operating activities
|
(2,701
|
)
|
12,863
|
|||
Cash
flows – investing activities
|
||||||
Additions
to property, plant and equipment
|
(3,269
|
)
|
(6,519
|
)
|
||
Dispositions
of property, plant and equipment
|
2,631
|
5,332
|
||||
Increase
in loans to customers
|
(114,353
|
)
|
(191,176
|
)
|
||
Principal
collections from customers – loans
|
132,489
|
165,348
|
||||
Investment
in equipment for financing leases
|
(4,609
|
)
|
(13,460
|
)
|
||
Principal
collections from customers – financing leases
|
9,818
|
12,098
|
||||
Net
change in credit card receivables
|
2,046
|
(468
|
)
|
|||
Proceeds
from principal business dispositions
|
8,846
|
4,422
|
||||
Payments
for principal businesses purchased
|
(5,637
|
)
|
(12,762
|
)
|
||
All
other investing activities
|
2,928
|
(1,638
|
)
|
|||
Cash
from (used for) investing activities – continuing
operations
|
30,890
|
(38,823
|
)
|
|||
Cash
from (used for) investing activities – discontinued
operations
|
30
|
(438
|
)
|
|||
Cash
from (used for) investing activities
|
30,920
|
(39,261
|
)
|
|||
Cash
flows – financing activities
|
||||||
Net
increase (decrease) in borrowings (maturities of 90 days or
less)
|
(34,239
|
)
|
8,395
|
|||
Newly
issued debt
|
||||||
Short-term (91 to 365
days)
|
2,804
|
313
|
||||
Long-term (longer than one
year)
|
47,792
|
61,026
|
||||
Non-recourse, leveraged
lease
|
−
|
57
|
||||
Repayments
and other debt reductions
|
||||||
Short-term (91 to 365
days)
|
(35,656
|
)
|
(33,251
|
)
|
||
Long-term (longer than one
year)
|
(2,866
|
)
|
(859
|
)
|
||
Non-recourse, leveraged
lease
|
(470
|
)
|
(429
|
)
|
||
Dividends
paid to shareowner
|
−
|
(2,019
|
)
|
|||
Capital
contribution and share issuance
|
8,750
|
−
|
||||
All
other financing activities
|
(1,619
|
)
|
95
|
|||
Cash
from (used for) financing activities – continuing
operations
|
(15,504
|
)
|
33,328
|
|||
Cash
used for financing activities – discontinued operations
|
−
|
(3
|
)
|
|||
Cash
from (used for) financing activities
|
(15,504
|
)
|
33,325
|
|||
Increase
in cash and equivalents
|
12,715
|
6,927
|
||||
Cash
and equivalents at beginning of year
|
36,610
|
8,907
|
||||
Cash
and equivalents at June 30
|
49,325
|
15,834
|
||||
Less
cash and equivalents of discontinued operations at June 30
|
184
|
333
|
||||
Cash
and equivalents of continuing operations at June 30
|
$
|
49,141
|
$
|
15,501
|
||
·
|
Acquired
in-process research and development (IPR&D) is accounted for as an
asset, with the cost recognized as the research and development is
realized or abandoned. IPR&D was previously expensed at the time of
the acquisition.
|
·
|
Contingent
consideration is recorded at fair value as an element of purchase price
with subsequent adjustments recognized in operations. Contingent
consideration was previously accounted for as a subsequent adjustment of
purchase price.
|
·
|
Subsequent
decreases in valuation allowances on acquired deferred tax assets are
recognized in operations after the measurement period. Such changes were
previously considered to be subsequent changes in consideration and were
recorded as decreases in goodwill.
|
·
|
Transaction
costs are expensed. These costs were previously treated as costs of the
acquisition.
|
·
|
Recognition
of an other-than-temporary impairment charge for debt securities is
required if any of these conditions are met: (1) we do not expect to
recover the entire amortized cost basis of the security, (2) we intend to
sell the security or (3) it is more likely than not that we will be
required to sell the security before we recover its amortized cost
basis.
|
·
|
If
the first condition above is met, but we do not intend to sell and it is
not more likely than not that we will be required to sell the security
before recovery of its amortized cost basis, we would be required to
record the difference between the security’s amortized cost basis and its
recoverable amount in earnings and the difference between the security’s
recoverable amount and fair value in other comprehensive income. If either
the second or third criteria are met, then we would be required to
recognize the entire difference between the security’s amortized cost
basis and its fair value in
earnings.
|
Three
months ended June 30
|
Six
months ended June 30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Operations
|
||||||||||||
Total
revenues
|
$
|
(2
|
)
|
$
|
199
|
$
|
(8
|
)
|
$
|
494
|
||
Loss
from discontinued operations before income taxes
|
$
|
(101
|
)
|
$
|
(204
|
)
|
$
|
(112
|
)
|
$
|
(282
|
)
|
Income
tax benefit
|
38
|
101
|
42
|
133
|
||||||||
Loss
from discontinued operations, net of taxes
|
$
|
(63
|
)
|
$
|
(103
|
)
|
$
|
(70
|
)
|
$
|
(149
|
)
|
Disposal
|
||||||||||||
Loss
on disposal before income taxes
|
$
|
(130
|
)
|
$
|
(224
|
)
|
$
|
(123
|
)
|
$
|
(224
|
)
|
Income
tax expense
|
(1
|
)
|
(9
|
)
|
(4
|
)
|
(9
|
)
|
||||
Loss
on disposal, net of taxes
|
$
|
(131
|
)
|
$
|
(233
|
)
|
$
|
(127
|
)
|
$
|
(233
|
)
|
Loss
from discontinued operations, net of taxes
|
$
|
(194
|
)
|
$
|
(336
|
)
|
$
|
(197
|
)
|
$
|
(382
|
)
|
At
|
||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
||||
Assets
|
||||||
Cash
and equivalents
|
$
|
184
|
$
|
180
|
||
Other
assets
|
13
|
19
|
||||
Other
|
1,265
|
1,441
|
||||
Assets
of discontinued operations
|
$
|
1,462
|
$
|
1,640
|
At
|
||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
||||
Liabilities
|
||||||
Liabilities
of discontinued operations
|
$
|
913
|
$
|
799
|
At
|
|||||||||||||||||||||||
June
30, 2009
|
December
31, 2008
|
||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
Gross
|
||||||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||||
(In
millions)
|
cost
|
gains
|
losses
|
fair
value
|
cost
|
gains
|
losses
|
fair
value
|
|||||||||||||||
Debt
|
|||||||||||||||||||||||
U.S. corporate
|
$
|
3,927
|
$
|
53
|
$
|
(514
|
)
|
$
|
3,466
|
$
|
4,456
|
$
|
54
|
$
|
(637
|
)
|
$
|
3,873
|
|||||
State and
municipal
|
1,204
|
4
|
(216
|
)
|
992
|
915
|
5
|
(70
|
)
|
850
|
|||||||||||||
Residential mortgage-backed(a)
|
3,526
|
20
|
(994
|
)
|
2,552
|
4,228
|
9
|
(976
|
)
|
3,261
|
|||||||||||||
Commercial
mortgage-backed
|
1,649
|
−
|
(487
|
)
|
1,162
|
1,664
|
−
|
(509
|
)
|
1,155
|
|||||||||||||
Asset-backed
|
2,920
|
25
|
(345
|
)
|
2,600
|
2,922
|
2
|
(668
|
)
|
2,256
|
|||||||||||||
Corporate –
non-U.S.
|
707
|
14
|
(48
|
)
|
673
|
608
|
6
|
(23
|
)
|
591
|
|||||||||||||
Government –
non-U.S.
|
1,490
|
6
|
(20
|
)
|
1,476
|
936
|
2
|
(15
|
)
|
923
|
|||||||||||||
U.S. government and federal
agency
|
71
|
2
|
−
|
73
|
26
|
3
|
−
|
29
|
|||||||||||||||
Retained
interests(b)(c)
|
6,154
|
167
|
(62
|
)
|
6,259
|
5,144
|
73
|
(136
|
)
|
5,081
|
|||||||||||||
Equity
|
|||||||||||||||||||||||
Available-for-sale
|
867
|
78
|
(25
|
)
|
920
|
1,023
|
22
|
(134
|
)
|
911
|
|||||||||||||
Trading
|
644
|
−
|
−
|
644
|
388
|
−
|
−
|
388
|
|||||||||||||||
Total
|
$
|
23,159
|
$
|
369
|
$
|
(2,711
|
)
|
$
|
20,817
|
$
|
22,310
|
$
|
176
|
$
|
(3,168
|
)
|
$
|
19,318
|
|||||
(a)
|
Substantially
collateralized by U.S. mortgages.
|
|
(b)
|
Included
$1,861 million and $1,752 million of retained interests at June 30, 2009
and December 31, 2008, respectively, accounted for in accordance with SFAS
155, Accounting for
Certain Hybrid Financial Instruments. See Note12.
|
|
(c)
|
Amortized
cost and estimated fair value included $5 million of trading securities at
June 30, 2009.
|
In
loss position for
|
|||||||||||||
Less
than 12 months
|
12
months or more
|
||||||||||||
(In
millions)
|
Estimated
fair
value
|
Gross
unrealized
losses
|
Estimated
fair
value
|
Gross
unrealized
losses
|
|||||||||
June
30, 2009
|
|||||||||||||
Debt
|
|||||||||||||
U.S. corporate
|
$
|
478
|
$
|
(44
|
)
|
$
|
1,474
|
$
|
(470
|
)
|
|||
State and
municipal
|
318
|
(135
|
)
|
283
|
(81
|
)
|
|||||||
Residential
mortgage-backed
|
126
|
(39
|
)
|
1,713
|
(955
|
)
|
|||||||
Commercial
mortgage-backed
|
−
|
−
|
1,155
|
(487
|
)
|
||||||||
Asset-backed
|
65
|
(7
|
)
|
1,369
|
(338
|
)
|
|||||||
Corporate –
non-U.S.
|
198
|
(27
|
)
|
260
|
(21
|
)
|
|||||||
Government –
non-U.S.
|
447
|
(3
|
)
|
280
|
(17
|
)
|
|||||||
U.S. government and federal
agency
|
−
|
−
|
−
|
−
|
|||||||||
Retained
interests
|
204
|
(5
|
)
|
182
|
(57
|
)
|
|||||||
Equity
|
91
|
(23
|
)
|
5
|
(2
|
)
|
|||||||
Total
|
$
|
1,927
|
$
|
(283
|
)
|
$
|
6,721
|
$
|
(2,428
|
)
|
|||
December
31, 2008
|
|||||||||||||
Debt
|
|||||||||||||
U.S. corporate
|
$
|
1,152
|
$
|
(397
|
)
|
$
|
1,253
|
$
|
(240
|
)
|
|||
State and
municipal
|
302
|
(21
|
)
|
278
|
(49
|
)
|
|||||||
Residential
mortgage-backed
|
1,216
|
(64
|
)
|
1,534
|
(912
|
)
|
|||||||
Commercial
mortgage-backed
|
285
|
(85
|
)
|
870
|
(424
|
)
|
|||||||
Asset-backed
|
903
|
(406
|
)
|
1,031
|
(262
|
)
|
|||||||
Corporate –
non-U.S.
|
60
|
(7
|
)
|
265
|
(16
|
)
|
|||||||
Government –
non-U.S.
|
−
|
−
|
275
|
(15
|
)
|
||||||||
U.S. government and federal
agency
|
−
|
−
|
−
|
−
|
|||||||||
Retained
interests
|
1,246
|
(61
|
)
|
238
|
(75
|
)
|
|||||||
Equity
|
200
|
(132
|
)
|
6
|
(2
|
)
|
|||||||
Total
|
$
|
5,364
|
$
|
(1,173
|
)
|
$
|
5,750
|
$
|
(1,995
|
)
|
|||
Three
months ended June 30
|
Six
months ended June 30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Gains
|
$
|
19
|
$
|
55
|
$
|
27
|
$
|
107
|
||||
Losses,
including impairments
|
(58
|
)
|
(62
|
)
|
(204
|
)
|
(100
|
)
|
||||
Net
|
$
|
(39
|
)
|
$
|
(7
|
)
|
$
|
(177
|
)
|
$
|
7
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
Loans,
net of deferred income
|
$
|
305,003
|
$
|
308,821
|
|||||
Investment
in financing leases, net of deferred income
|
59,593
|
67,077
|
|||||||
364.596
|
375,898
|
||||||||
Less
allowance for losses
|
(6,590
|
)
|
(5,306
|
)
|
|||||
Financing
receivables – net(a)
|
$
|
358,006
|
$
|
370,592
|
|||||
(a)
|
Included
$4,967 million and $6,461 million related to consolidated, liquidating
securitization entities at June 30, 2009 and December 31, 2008,
respectively. In addition, financing receivables at June 30, 2009 and
December 31, 2008 included $3,011 million and $2,736 million,
respectively, relating to loans that had been acquired and accounted for
in accordance with SOP 03-3, Accounting for Certain Loans
or Debt Securities Acquired in a Transfer.
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
CLL(a)
|
|||||||||
Americas
|
$
|
96,352
|
$
|
104,462
|
|||||
Europe
|
40,549
|
36,972
|
|||||||
Asia
|
14,057
|
16,683
|
|||||||
Other
|
751
|
786
|
|||||||
151,709
|
158,903
|
||||||||
Consumer(a)
|
|||||||||
Non-U.S.
residential mortgages(b)
|
62,587
|
60,753
|
|||||||
Non-U.S.
installment and revolving credit
|
25,485
|
24,441
|
|||||||
U.S.
installment and revolving credit
|
23,939
|
27,645
|
|||||||
Non-U.S.
auto
|
14,853
|
18,168
|
|||||||
Other
|
13,218
|
11,541
|
|||||||
140,082
|
142,548
|
||||||||
Real
Estate
|
46,018
|
46,735
|
|||||||
Energy
Financial Services
|
8,471
|
8,355
|
|||||||
GECAS(c)
|
14,992
|
15,326
|
|||||||
Other(d)
|
3,324
|
4,031
|
|||||||
364,596
|
375,898
|
||||||||
Less
allowance for losses
|
(6,590
|
)
|
(5,306
|
)
|
|||||
Total
|
$
|
358,006
|
$
|
370,592
|
|||||
(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)
|
At
June 30, 2009, net of credit insurance, approximately 26% 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 the origination date, loans with an
adjustable rate were underwritten to the reset value.
|
|
(c)
|
Included
loans and financing leases of $12,901 million and $13,078 million at June
30, 2009 and December 31, 2008, respectively, related to commercial
aircraft at Aviation Financial Services.
|
|
(d)
|
Consisted
of loans and financing leases related to certain consolidated, liquidating
securitization entities.
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
Loans
requiring allowance for losses
|
$
|
5,657
|
$
|
2,712
|
|||||
Loans
expected to be fully recoverable
|
2,425
|
871
|
|||||||
Total
impaired loans
|
$
|
8,082
|
$
|
3,583
|
|||||
Allowance
for losses (specific reserves)
|
$
|
1,321
|
$
|
635
|
|||||
Average
investment during the period
|
5,836
|
2,064
|
|||||||
Interest
income earned while impaired(a)
|
55
|
48
|
|||||||
(a)
|
Recognized
principally on cash basis.
|
(In
millions)
|
Balance
January
1,
2009
|
Provision
charged
to
operations
|
Other(a)
|
Gross
write-offs
|
Recoveries
|
Balance
June
30,
2009
|
||||||||||||||||||
CLL(b)
|
||||||||||||||||||||||||
Americas
|
$
|
824
|
$
|
720
|
$
|
(35
|
)
|
$
|
(435
|
)
|
$
|
42
|
$
|
1,116
|
||||||||||
Europe
|
288
|
290
|
(1
|
)
|
(139
|
)
|
10
|
448
|
||||||||||||||||
Asia
|
163
|
120
|
(6
|
)
|
(85
|
)
|
7
|
199
|
||||||||||||||||
Other
|
2
|
3
|
2
|
(1
|
)
|
−
|
6
|
|||||||||||||||||
Consumer(b)
|
||||||||||||||||||||||||
Non-U.S.
residential
|
||||||||||||||||||||||||
mortgages
|
383
|
561
|
59
|
(231
|
)
|
59
|
831
|
|||||||||||||||||
Non-U.S.
installment
|
||||||||||||||||||||||||
and revolving
credit
|
1,051
|
900
|
65
|
(1,098
|
)
|
229
|
1,147
|
|||||||||||||||||
U.S.
installment and
|
||||||||||||||||||||||||
revolving
credit
|
1,700
|
1,729
|
(497
|
)
|
(1,438
|
)
|
81
|
1,575
|
||||||||||||||||
Non-U.S.
auto
|
222
|
245
|
13
|
(302
|
)
|
91
|
269
|
|||||||||||||||||
Other
|
226
|
180
|
(2
|
)
|
(205
|
)
|
51
|
250
|
||||||||||||||||
Real
Estate
|
301
|
344
|
10
|
(85
|
)
|
−
|
570
|
|||||||||||||||||
Energy
Financial
|
||||||||||||||||||||||||
Services
|
58
|
32
|
1
|
−
|
−
|
91
|
||||||||||||||||||
GECAS
|
60
|
1
|
−
|
−
|
−
|
61
|
||||||||||||||||||
Other
|
28
|
12
|
1
|
(14
|
)
|
−
|
27
|
|||||||||||||||||
Total
|
$
|
5,306
|
$
|
5,137
|
$
|
(390
|
)
|
$
|
(4,033
|
)
|
$
|
570
|
$
|
6,590
|
||||||||||
(a)
|
Other
primarily included the effects of securitization activity and currency
exchange.
|
(b)
|
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.
|
(In
millions)
|
Balance
January
1,
2008
|
Provision
charged
to
operations
|
Other(a)
|
Gross
write-offs
|
Recoveries
|
Balance
June
30,
2008
|
||||||||||||||||||
CLL(b)
|
||||||||||||||||||||||||
Americas
|
$
|
451
|
$
|
251
|
$
|
49
|
$
|
(239
|
)
|
$
|
32
|
$
|
544
|
|||||||||||
Europe
|
230
|
94
|
(38
|
)
|
(82
|
)
|
17
|
221
|
||||||||||||||||
Asia
|
226
|
49
|
(8
|
)
|
(162
|
)
|
3
|
108
|
||||||||||||||||
Other
|
3
|
1
|
(2
|
)
|
−
|
−
|
2
|
|||||||||||||||||
Consumer(b)
|
||||||||||||||||||||||||
Non-U.S.
residential
|
||||||||||||||||||||||||
mortgages
|
246
|
61
|
33
|
(62
|
)
|
41
|
319
|
|||||||||||||||||
Non-U.S.
installment
|
||||||||||||||||||||||||
and revolving
credit
|
1,371
|
847
|
77
|
(1,265
|
)
|
436
|
1,466
|
|||||||||||||||||
U.S.
installment and
|
||||||||||||||||||||||||
revolving
credit
|
985
|
1,144
|
(304
|
)
|
(952
|
)
|
132
|
1,005
|
||||||||||||||||
Non-U.S.
auto
|
324
|
154
|
(37
|
)
|
(299
|
)
|
144
|
286
|
||||||||||||||||
Other
|
167
|
119
|
83
|
(149
|
)
|
33
|
253
|
|||||||||||||||||
Real
Estate
|
168
|
34
|
14
|
(8
|
)
|
1
|
209
|
|||||||||||||||||
Energy
Financial
|
||||||||||||||||||||||||
Services
|
19
|
1
|
2
|
−
|
−
|
22
|
||||||||||||||||||
GECAS
|
8
|
38
|
−
|
(1
|
)
|
−
|
45
|
|||||||||||||||||
Other
|
18
|
10
|
−
|
(8
|
)
|
−
|
20
|
|||||||||||||||||
Total
|
$
|
4,216
|
$
|
2,803
|
$
|
(131
|
)
|
$
|
(3,227
|
)
|
$
|
839
|
$
|
4,500
|
||||||||||
(a)
|
Other
primarily included the effects of securitization activity, currency
exchange, dispositions and acquisitions.
|
(b)
|
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.
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
Goodwill
|
$
|
27,160
|
$
|
25,204
|
|||||
Other
intangible assets
|
|||||||||
Intangible assets subject to
amortization
|
$
|
3,541
|
$
|
3,174
|
|||||
(In
millions)
|
Balance
January
1,
2009
|
Acquisitions/
acquisition
accounting
adjustments
|
Dispositions,
currency
exchange
and
other
|
Balance
June
30,
2009
|
||||||||
CLL
|
$
|
12,321
|
(a)
|
$
|
839
|
$
|
(351
|
)
|
$
|
12,809
|
||
Consumer
|
9,407
|
(a)
|
1,352
|
138
|
10,897
|
|||||||
Real
Estate
|
1,159
|
(7
|
)
|
26
|
1,178
|
|||||||
Energy
Financial Services
|
2,162
|
(4
|
)
|
(39
|
)
|
2,119
|
||||||
GECAS
|
155
|
−
|
2
|
157
|
||||||||
Total
|
$
|
25,204
|
$
|
2,180
|
$
|
(224
|
)
|
$
|
27,160
|
|||
(a)
|
Reflected
the transfer of Artesia during the first quarter of 2009, resulting in a
related movement of beginning goodwill balance of $326
million.
|
At
|
|||||||||||||||||||
June
30, 2009
|
December
31, 2008
|
||||||||||||||||||
(In
millions)
|
Gross
carrying
amount
|
Accumulated
amortization
|
Net
|
Gross
carrying
amount
|
Accumulated
amortization
|
Net
|
|||||||||||||
Customer-related
|
$
|
1,774
|
$
|
(711
|
)
|
$
|
1,063
|
$
|
1,790
|
$
|
(616
|
)
|
$
|
1,174
|
|||||
Patents,
licenses and trademarks
|
564
|
(417
|
)
|
147
|
564
|
(460
|
)
|
104
|
|||||||||||
Capitalized
software
|
2,262
|
(1,591
|
)
|
671
|
2,148
|
(1,463
|
)
|
685
|
|||||||||||
Lease
valuations
|
1,748
|
(702
|
)
|
1,046
|
1,761
|
(594
|
)
|
1,167
|
|||||||||||
All
other
|
878
|
(264
|
)
|
614
|
233
|
(189
|
)
|
44
|
|||||||||||
Total
|
$
|
7,226
|
$
|
(3,685
|
)
|
$
|
3,541
|
$
|
6,496
|
$
|
(3,322
|
)
|
$
|
3,174
|
|||||
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
Short-term
borrowings
|
|||||||||
Commercial
paper
|
|||||||||
U.S.
|
|||||||||
Unsecured(a)
|
$
|
35,162
|
$
|
57,665
|
|||||
Asset-backed(b)
|
3,032
|
3,652
|
|||||||
Non-U.S.
|
9,356
|
9,033
|
|||||||
Current
portion of long-term debt(a)(c)(d)
|
82,417
|
69,680
|
|||||||
Bank
deposits(e)
|
26,959
|
29,634
|
|||||||
Bank
borrowings(f)
|
3,475
|
10,028
|
|||||||
GE
Interest Plus notes(g)
|
5,964
|
5,633
|
|||||||
Other
|
1,664
|
3,276
|
|||||||
Total
|
168,029
|
188,601
|
|||||||
Long-term
borrowings
|
|||||||||
Senior
notes
|
|||||||||
Unsecured(a)(d)(h)
|
306,053
|
299,651
|
|||||||
Asset-backed(i)
|
4,558
|
5,002
|
|||||||
Subordinated
notes(j)
|
2,475
|
2,567
|
|||||||
Subordinated
debentures(k)
|
7,534
|
7,315
|
|||||||
Bank
deposits(l)
|
9,447
|
7,220
|
|||||||
Total
|
330,067
|
321,755
|
|||||||
Total
borrowings
|
$
|
498,096
|
$
|
510,356
|
|||||
(a)
|
GE
Capital had issued and outstanding $69,132 million ($21,132 million
commercial paper and $48,000 million long-term borrowings) and $35,243
million ($21,823 million commercial paper and $13,420 million long-term
borrowings) of senior, unsecured debt that was guaranteed by the Federal
Deposit Insurance Corporation (FDIC) under the Temporary Liquidity
Guarantee Program at June 30, 2009 and December 31, 2008, respectively. GE
Capital and GE are parties to an Eligible Entity Designation Agreement and
GE Capital is subject to the terms of a Master Agreement, each entered
into with the FDIC. The terms of these agreements include, among other
things, a requirement that GE and GE Capital reimburse the FDIC for any
amounts that the FDIC pays to holders of GE Capital debt that is
guaranteed by the FDIC.
|
(b)
|
Consists
entirely of obligations of consolidated, liquidating securitization
entities. See Note 12.
|
(c)
|
Included
$222 million and $326 million of asset-backed senior notes, issued by
consolidated, liquidating securitization entities at June 30, 2009 and
December 31, 2008, respectively.
|
(d)
|
Included
$1,632 million ($113 million short-term and $1,519 million long-term) of
borrowings under European government-sponsored programs at June 30,
2009.
|
(e)
|
Included
$18,757 million and $11,793 million of deposits in non-U.S. banks at June
30, 2009 and December 31, 2008, respectively, and included certificates of
deposits distributed by brokers of $8,202 million and $17,841 million at
June 30, 2009 and December 31, 2008, respectively.
|
(f)
|
Term
borrowings from banks with an original term to maturity of less than 12
months.
|
(g)
|
Entirely
variable denomination floating rate demand notes.
|
(h)
|
Included
borrowings from GECS affiliates of $1,010 million and $1,006 million at
June 30, 2009 and December 31, 2008, respectively.
|
(i)
|
Included
$1,309 million and $2,104 million of asset-backed senior notes, issued by
consolidated, liquidating securitization entities at June 30, 2009 and
December 31, 2008, respectively. See Note 12.
|
(j)
|
Included
$117 million and $450 million of subordinated notes guaranteed by GE at
June 30, 2009 and December 31, 2008, respectively.
|
(k)
|
Subordinated
debentures receive rating agency equity credit and were hedged at issuance
to the U.S. dollar equivalent of $7,725 million.
|
(l)
|
Included
certificates of deposits distributed by brokers with maturities greater
than one year of $9,069 million and $6,699 million at June 30, 2009 and
December 31, 2008, respectively.
|
At
|
||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
||||
Unrecognized
tax benefits
|
$
|
3,590
|
$
|
3,454
|
||
Portion that, if recognized,
would reduce tax expense and
|
||||||
effective tax rate(a)
|
1,853
|
1,734
|
||||
Accrued
interest on unrecognized tax benefits
|
719
|
693
|
||||
Accrued
penalties on unrecognized tax benefits
|
71
|
65
|
||||
Reasonably
possible reduction to the balance of unrecognized
|
||||||
tax benefits in succeeding 12
months
|
0-150
|
0-350
|
||||
Portion that, if recognized,
would reduce tax expense
|
||||||
and effective tax rate(a)
|
0-50
|
0-50
|
||||
(a)
|
Some
portion of such reduction might be reported as discontinued
operations.
|
Three
months ended June 30
|
Six
months ended June 30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Net
earnings attributable to GECC
|
$
|
181
|
$
|
2,414
|
$
|
1,152
|
$
|
4,849
|
||||
Investment
securities – net
|
556
|
(240
|
)
|
516
|
(741
|
)
|
||||||
Currency
translation adjustments – net
|
4,731
|
(320
|
)
|
1,707
|
789
|
|||||||
Cash
flow hedges – net
|
593
|
1,792
|
1,316
|
114
|
||||||||
Benefit
plans – net
|
(17
|
)
|
5
|
(9
|
)
|
18
|
||||||
Total
|
$
|
6,044
|
$
|
3,651
|
$
|
4,682
|
$
|
5,029
|
Three
months ended June 30
|
Six
months ended June 30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Interest
on loans
|
$
|
5,008
|
$
|
6,675
|
$
|
10,053
|
$
|
13,105
|
||||
Equipment
leased to others
|
2,916
|
3,896
|
6,389
|
7,691
|
||||||||
Fees
|
1,100
|
1,399
|
2,259
|
2,731
|
||||||||
Financing
leases
|
825
|
1,190
|
1,726
|
2,339
|
||||||||
Real
estate investments
|
369
|
1,133
|
715
|
2,290
|
||||||||
Associated
companies
|
309
|
647
|
474
|
1,116
|
||||||||
Investment
income(a)
|
599
|
597
|
924
|
1,146
|
||||||||
Net
securitization gains
|
360
|
273
|
640
|
622
|
||||||||
Other
items(b)(c)
|
871
|
1,811
|
2,513
|
3,337
|
||||||||
Total
|
$
|
12,357
|
$
|
17,621
|
$
|
25,693
|
$
|
34,377
|
||||
(a)
|
Included
net other-than-temporary impairments on investment securities of $57
million and $62 million in the second quarters of 2009 and 2008,
respectively, and $198 million and $97 million in the first six months of
2009 and 2008, respectively. See Note 3.
|
|
(b)
|
Included
a gain on the sale of a limited partnership interest in PTL and a related
gain on the remeasurement of the retained investment to fair value
totaling $296 million in the first quarter of 2009. See Note
12.
|
|
(c)
|
Included
a gain of $343 million on the remeasurement to fair value of our equity
method investment in BAC, following our acquisition of a controlling
interest in the second quarter of 2009. See Note 5.
|
Level 1 –
|
Quoted
prices for identical instruments in active
markets.
|
Level 2 –
|
Quoted
prices for similar instruments in active markets; quoted prices for
identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant
value drivers are observable.
|
Level 3 –
|
Significant
inputs to the valuation model are
unobservable.
|
(In
millions)
|
Level
1
|
Level
2
|
Level
3
|
FIN
39 netting(a)
|
Net
balance
|
||||||||||
June
30, 2009
|
|||||||||||||||
Assets
|
|||||||||||||||
Investment
securities
|
|||||||||||||||
Debt
|
|||||||||||||||
U.S.
corporate
|
$
|
191
|
$
|
1,729
|
$
|
1,546
|
$
|
−
|
$
|
3,466
|
|||||
State and
municipal
|
273
|
562
|
157
|
−
|
992
|
||||||||||
Residential
mortgage-backed
|
58
|
2,443
|
51
|
−
|
2,552
|
||||||||||
Commercial
mortgage-backed
|
−
|
1,112
|
50
|
−
|
1,162
|
||||||||||
Asset-backed
|
−
|
852
|
1,748
|
−
|
2,600
|
||||||||||
Corporate −
non-U.S.
|
143
|
78
|
452
|
−
|
673
|
||||||||||
Government −
non-U.S.
|
1,283
|
51
|
142
|
−
|
1,476
|
||||||||||
U.S. government
and
|
|||||||||||||||
federal
agency
|
2
|
71
|
−
|
−
|
73
|
||||||||||
Retained
interests
|
−
|
−
|
6,259
|
−
|
6,259
|
||||||||||
Equity
|
|||||||||||||||
Available-for-sale
|
404
|
500
|
16
|
−
|
920
|
||||||||||
Trading
|
644
|
−
|
−
|
−
|
644
|
||||||||||
Derivatives(b)
|
−
|
9,523
|
553
|
(4,900
|
)
|
5,176
|
|||||||||
Other(c)
|
−
|
−
|
571
|
−
|
571
|
||||||||||
Total
|
$
|
2,998
|
$
|
16,921
|
$
|
11,545
|
$
|
(4,900
|
)
|
$
|
26,564
|
||||
Liabilities
|
|||||||||||||||
Derivatives
|
$
|
−
|
$
|
9,127
|
$
|
222
|
$
|
(4,978
|
)
|
$
|
4,371
|
||||
Other
|
−
|
30
|
−
|
−
|
30
|
||||||||||
Total
|
$
|
−
|
$
|
9,157
|
$
|
222
|
$
|
(4,978
|
)
|
$
|
4,401
|
December
31, 2008
|
|||||||||||||||
Assets
|
|||||||||||||||
Investment
securities
|
|||||||||||||||
Debt
|
|||||||||||||||
U.S.
corporate
|
$
|
525
|
$
|
1,708
|
$
|
1,640
|
$
|
−
|
$
|
3,873
|
|||||
State and
municipal
|
−
|
603
|
247
|
−
|
850
|
||||||||||
Residential
mortgage-backed
|
30
|
3,113
|
118
|
−
|
3,261
|
||||||||||
Commercial
mortgage-backed
|
−
|
1,098
|
57
|
−
|
1,155
|
||||||||||
Asset-backed
|
−
|
676
|
1,580
|
−
|
2,256
|
||||||||||
Corporate −
non-U.S.
|
69
|
50
|
472
|
−
|
591
|
||||||||||
Government −
non-U.S.
|
495
|
11
|
417
|
−
|
923
|
||||||||||
U.S. government
and
|
|||||||||||||||
federal
agency
|
5
|
24
|
−
|
−
|
29
|
||||||||||
Retained
interests
|
−
|
−
|
5,081
|
−
|
5,081
|
||||||||||
Equity
|
|||||||||||||||
Available-for-sale
|
395
|
498
|
18
|
−
|
911
|
||||||||||
Trading
|
83
|
305
|
−
|
−
|
388
|
||||||||||
Derivatives(b)
|
–
|
17,721
|
544
|
(7,054
|
)
|
11,211
|
|||||||||
Other(c)
|
−
|
288
|
551
|
–
|
839
|
||||||||||
Total
|
$
|
1,602
|
$
|
26,095
|
$
|
10,725
|
$
|
(7,054
|
)
|
$
|
31,368
|
||||
Liabilities
|
|||||||||||||||
Derivatives
|
$
|
2
|
$
|
10,810
|
$
|
162
|
$
|
(7,218
|
)
|
$
|
3,756
|
||||
Other
|
–
|
323
|
–
|
–
|
323
|
||||||||||
Total
|
$
|
2
|
$
|
11,133
|
$
|
162
|
$
|
(7,218
|
)
|
$
|
4,079
|
||||
(a)
|
FASB
Interpretation (FIN) 39, Offsetting of Amounts Related
to Certain Contracts, permits the netting of derivative receivables
and payables when a legally enforceable master netting agreement exists.
Included fair value adjustments related to our own and counterparty credit
risk.
|
(b)
|
The
fair value of derivatives included an adjustment for non-performance risk.
At June 30, 2009 and December 31, 2008, the cumulative adjustment was a
gain of $78 million and $164 million, respectively.
|
(c)
|
Included
private equity investments and loans designated under the fair value
option.
|
(In
millions)
|
Net
realized/
|
Net
change
|
||||||||||||||||||||
unrealized
|
in
unrealized
|
|||||||||||||||||||||
gains
(losses)
|
gains
(losses)
|
|||||||||||||||||||||
Net
realized/
|
included
in
|
relating
to
|
||||||||||||||||||||
unrealized
|
accumulated
|
Purchases,
|
Transfers
|
instruments
|
||||||||||||||||||
gains(losses)
|
other
|
issuances
|
in
and/or
|
still
held at
|
||||||||||||||||||
April
1,
|
included
in
|
comprehensive
|
and
|
out
of
|
June
30,
|
June
30,
|
||||||||||||||||
2009
|
earnings
|
(a)
|
income
|
settlements
|
Level
3
|
(b)
|
2009
|
2009
|
(c)
|
|||||||||||||
Investment
securities
|
||||||||||||||||||||||
Debt
|
||||||||||||||||||||||
U.S. corporate
|
$
|
1,376
|
$
|
4
|
$
|
105
|
$
|
57
|
$
|
4
|
$
|
1,546
|
$
|
−
|
||||||||
State and
municipal
|
89
|
−
|
45
|
(2
|
)
|
25
|
157
|
−
|
||||||||||||||
Residential
|
||||||||||||||||||||||
mortgage-backed
|
58
|
−
|
−
|
−
|
(7
|
)
|
51
|
−
|
||||||||||||||
Commercial
|
||||||||||||||||||||||
mortgage-backed
|
50
|
−
|
−
|
−
|
−
|
50
|
−
|
|||||||||||||||
Asset-backed
|
1,550
|
1
|
117
|
90
|
(10
|
)
|
1,748
|
−
|
||||||||||||||
Corporate –
non-U.S.
|
444
|
(5
|
)
|
47
|
(34
|
)
|
−
|
452
|
−
|
|||||||||||||
Government
|
||||||||||||||||||||||
– non-U.S.
|
124
|
−
|
15
|
3
|
−
|
142
|
−
|
|||||||||||||||
U.S. government
and
|
||||||||||||||||||||||
federal agency
|
−
|
−
|
−
|
−
|
−
|
−
|
−
|
|||||||||||||||
Retained
interests
|
5,420
|
327
|
157
|
355
|
−
|
6,259
|
124
|
|||||||||||||||
Equity
|
||||||||||||||||||||||
Available-for-sale
|
15
|
1
|
1
|
(1
|
)
|
−
|
16
|
−
|
||||||||||||||
Trading
|
−
|
−
|
−
|
−
|
−
|
−
|
−
|
|||||||||||||||
Derivatives(d)(e)
|
398
|
52
|
(22
|
)
|
(60
|
)
|
12
|
380
|
(35
|
)
|
||||||||||||
Other
|
512
|
(9
|
)
|
28
|
40
|
−
|
571
|
(11
|
)
|
|||||||||||||
Total
|
$
|
10,036
|
$
|
371
|
$
|
493
|
$
|
448
|
$
|
24
|
$
|
11,372
|
$
|
78
|
||||||||
(a)
|
Earnings
effects are primarily included in the “Revenues from services” and
“Interest” captions in the Condensed Statement of Current and Retained
Earnings.
|
(b)
|
Transfers
in and out of Level 3 are considered to occur at the beginning of the
period. Transfers out of Level 3 were a result of increased use of quotes
from independent pricing vendors based on recent trading
activity.
|
(c)
|
Represented
the amount of unrealized gains or losses for the period included in
earnings.
|
(d)
|
Gains
from derivatives were partially offset by $15 million in losses from
related derivatives included in Level 2.
|
(e)
|
Represented
derivative assets net of derivative liabilities and included cash accruals
of $49 million not reflected in the fair value hierarchy
table.
|
(In
millions)
|
Net
realized/
|
Net
change
|
||||||||||||||||||||
unrealized
|
in
unrealized
|
|||||||||||||||||||||
gains
(losses)
|
gains
(losses)
|
|||||||||||||||||||||
Net
realized/
|
included
in
|
relating
to
|
||||||||||||||||||||
unrealized
|
accumulated
|
Purchases,
|
Transfers
|
instruments
|
||||||||||||||||||
gains(losses)
|
other
|
issuances
|
in
and/or
|
still
held at
|
||||||||||||||||||
April
1,
|
included
in
|
comprehensive
|
and
|
out
of
|
June
30,
|
June
30,
|
||||||||||||||||
2008
|
earnings
|
(a)
|
income
|
settlements
|
Level
3
|
(b)
|
2008
|
2008
|
(c)
|
|||||||||||||
Investment
securities
|
$
|
8,894
|
$
|
227
|
$
|
3
|
$
|
185
|
$
|
488
|
$
|
9,797
|
$
|
6
|
||||||||
Derivatives(d)
|
489
|
15
|
(31
|
)
|
(59
|
)
|
−
|
414
|
(15
|
)
|
||||||||||||
Other
|
714
|
10
|
(5
|
)
|
(55
|
)
|
51
|
715
|
10
|
|||||||||||||
Total
|
$
|
10,097
|
$
|
252
|
$
|
(33
|
)
|
$
|
71
|
$
|
539
|
$
|
10,926
|
$
|
1
|
|||||||
(a)
|
Earnings
effects are primarily included in the “Revenues from services” and
“Interest” captions in the Condensed Statement of Current and Retained
Earnings.
|
(b)
|
Transfers
in and out of Level 3 are considered to occur at the beginning of the
period.
|
(c)
|
Represented
the amount of unrealized gains or losses for the period included in
earnings.
|
(d)
|
Represented
derivative assets net of derivative liabilities and includes cash accruals
of $12 million not reflected in the fair value hierarchy
table.
|
(In
millions)
|
Net
realized/
|
Net
change
|
||||||||||||||||||||
unrealized
|
in
unrealized
|
|||||||||||||||||||||
gains
(losses)
|
gains
(losses)
|
|||||||||||||||||||||
Net
realized/
|
included
in
|
relating
to
|
||||||||||||||||||||
unrealized
|
accumulated
|
Purchases,
|
Transfers
|
instruments
|
||||||||||||||||||
gains(losses)
|
other
|
issuances
|
in
and/or
|
still
held at
|
||||||||||||||||||
January
1,
|
included
in
|
comprehensive
|
and
|
out
of
|
June
30,
|
June
30,
|
||||||||||||||||
2009
|
earnings
|
(a)
|
income
|
settlements
|
Level
3
|
(b)
|
2009
|
2009
|
(c)
|
|||||||||||||
Investment
securities
|
||||||||||||||||||||||
Debt
|
||||||||||||||||||||||
U.S. corporate
|
$
|
1,640
|
$
|
12
|
$
|
−
|
$
|
(3
|
)
|
$
|
(103
|
)
|
$
|
1,546
|
$
|
−
|
||||||
State and
municipal
|
247
|
−
|
(107
|
)
|
(8
|
)
|
25
|
157
|
−
|
|||||||||||||
Residential
|
||||||||||||||||||||||
mortgage-backed
|
118
|
−
|
(9
|
)
|
(20
|
)
|
(38
|
)
|
51
|
−
|
||||||||||||
Commercial
|
||||||||||||||||||||||
mortgage-backed
|
57
|
−
|
(7
|
)
|
−
|
−
|
50
|
−
|
||||||||||||||
Asset-backed
|
1,580
|
8
|
218
|
83
|
(141
|
)
|
1,748
|
−
|
||||||||||||||
Corporate –
non-U.S.
|
||||||||||||||||||||||
Government
|
472
|
(15
|
)
|
(12
|
)
|
47
|
(40
|
)
|
452
|
−
|
||||||||||||
– non-U.S.
|
||||||||||||||||||||||
U.S. government
and
|
||||||||||||||||||||||
federal agency
|
418
|
−
|
(4
|
)
|
3
|
(275
|
)
|
142
|
−
|
|||||||||||||
Retained
interests
|
5,081
|
606
|
198
|
374
|
−
|
6,259
|
198
|
|||||||||||||||
Equity
|
||||||||||||||||||||||
Available-for-sale
|
17
|
−
|
−
|
(1
|
)
|
−
|
16
|
−
|
||||||||||||||
Trading
|
−
|
−
|
−
|
−
|
−
|
−
|
−
|
|||||||||||||||
Derivatives(d)(e)
|
401
|
77
|
(66
|
)
|
(67
|
)
|
35
|
380
|
(28
|
)
|
||||||||||||
Other
|
551
|
(19
|
)
|
10
|
29
|
−
|
571
|
(21
|
)
|
|||||||||||||
Total
|
$
|
10,582
|
$
|
669
|
$
|
221
|
$
|
437
|
$
|
(537
|
)
|
$
|
11,372
|
$
|
149
|
|||||||
(a)
|
Earnings
effects are primarily included in the “Revenues from services” and
“Interest” captions in the Condensed Statement of Current and Retained
Earnings.
|
(b)
|
Transfers
in and out of Level 3 are considered to occur at the beginning of the
period. Transfers out of Level 3 were a result of increased use of quotes
from independent pricing vendors based on recent trading
activity.
|
(c)
|
Represented
the amount of unrealized gains or losses for the period included in
earnings.
|
(d)
|
Gains
from derivatives were partially offset by $44 million in losses from
related derivatives included in Level 2 and $5 million in losses from
qualifying fair value hedges.
|
(e)
|
Represented
derivative assets net of derivative liabilities and included cash accruals
of $49 million not reflected in the fair value hierarchy
table.
|
(In
millions)
|
Net
realized/
|
Net
change
|
||||||||||||||||||||
unrealized
|
in
unrealized
|
|||||||||||||||||||||
gains
(losses)
|
gains
(losses)
|
|||||||||||||||||||||
Net
realized/
|
included
in
|
relating
to
|
||||||||||||||||||||
unrealized
|
accumulated
|
Purchases,
|
Transfers
|
instruments
|
||||||||||||||||||
gains(losses)
|
other
|
issuances
|
in
and/or
|
still
held at
|
||||||||||||||||||
January
1,
|
included
in
|
comprehensive
|
and
|
out
of
|
June
30,
|
June
30,
|
||||||||||||||||
2008
|
earnings
|
(a)
|
income
|
settlements
|
Level
3
|
(b)
|
2008
|
2008
|
(c)
|
|||||||||||||
Investment
securities
|
$
|
8,329
|
$
|
381
|
$
|
(99
|
)
|
$
|
698
|
$
|
488
|
$
|
9,797
|
$
|
(28
|
)
|
||||||
Derivatives(d)(e)
|
200
|
290
|
26
|
(102
|
)
|
−
|
414
|
272
|
||||||||||||||
Other
|
689
|
(8
|
)
|
28
|
(45
|
)
|
51
|
715
|
(9
|
)
|
||||||||||||
Total
|
$
|
9,218
|
$
|
663
|
$
|
(45
|
)
|
$
|
551
|
$
|
539
|
$
|
10,926
|
$
|
235
|
|||||||
(a)
|
Earnings
effects are primarily included in the “Revenues from services” and
“Interest” captions in the Condensed Statement of Current and Retained
Earnings.
|
(b)
|
Transfers
in and out of Level 3 are considered to occur at the beginning of the
period.
|
(c)
|
Represented
the amount of unrealized gains or losses for the period included in
earnings.
|
(d)
|
Earnings
from derivatives were partially offset by $36 million in losses from
related derivatives included in Level 2 and $57 million in losses from
qualifying fair value hedges.
|
(e)
|
Represented
derivative assets net of derivative liabilities and includes cash accruals
of $12 million not reflected in the fair value hierarchy
table.
|
Three
months ended June 30
|
Six
months ended June 30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Financing
receivables and loans held for sale
|
$
|
(429
|
)
|
$
|
(269
|
)
|
$
|
(715
|
)
|
$
|
(424
|
)
|
Cost
and equity method investments
|
(256
|
)
|
(76
|
)
|
(479
|
)
|
(142
|
)
|
||||
Long-lived
assets(a)
|
(180
|
)
|
(7
|
)
|
(303
|
)
|
(35
|
)
|
||||
Retained
investments in formerly consolidated
|
||||||||||||
subsidiaries(a)
|
11
|
−
|
237
|
−
|
||||||||
Total
|
$
|
(854
|
)
|
$
|
(352
|
)
|
$
|
(1,260
|
)
|
$
|
(601
|
)
|
(a)
|
SFAS
157 was adopted for non-financial assets valued on a non-recurring basis
as of January 1, 2009.
|
At
|
|||||||||||||||||||
June
30, 2009
|
December
31, 2008
|
||||||||||||||||||
Assets
(liabilities)
|
Assets
(liabilities)
|
||||||||||||||||||
(In
millions)
|
Notional
amount
|
Carrying
amount
(net)
|
Estimated
fair
value
|
Notional
amount
|
Carrying
amount
(net)
|
Estimated
fair
value
|
|||||||||||||
Assets
|
|||||||||||||||||||
Loans
|
$
|
(a)
|
$
|
298,978
|
$
|
282,491
|
$
|
(a)
|
$
|
304,010
|
$
|
291,465
|
|||||||
Other commercial
mortgages
|
(a)
|
355
|
355
|
(a)
|
374
|
374
|
|||||||||||||
Loans held for
sale
|
(a)
|
1,791
|
1,841
|
(a)
|
3,640
|
3,670
|
|||||||||||||
Other
financial instruments(b)
|
(a)
|
2,424
|
2,499
|
(a)
|
2,609
|
2,781
|
|||||||||||||
Liabilities
|
|||||||||||||||||||
Borrowings(c)(d)
|
(a)
|
(498,096
|
)
|
(486,675
|
)
|
(a)
|
(510,356
|
)
|
(491,240
|
)
|
|||||||||
Guaranteed investment
contracts
|
(a)
|
(9,136
|
)
|
(9,054
|
)
|
(a)
|
(10,828
|
)
|
(10,677
|
)
|
|||||||||
Insurance – credit life(e)
|
1,364
|
(62
|
)
|
(42
|
)
|
1,052
|
(46
|
)
|
(33
|
)
|
|||||||||
(a)
|
These
financial instruments do not have notional amounts.
|
|
(b)
|
Principally
cost method investments.
|
|
(c)
|
See
Note 6.
|
|
(d)
|
Fair
values exclude interest rate and currency derivatives designated as hedges
of borrowings. Had they been included, the fair value of borrowings at
June 30, 2009 and December 31, 2008 would have been reduced by $425
million and $3,776 million, respectively.
|
|
(e)
|
Net
of reinsurance of $2,500 million and $3,100 million at June 30, 2009 and
December 31, 2008, respectively.
|
Notional
amount at
|
|||||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||||
Ordinary course of business
lending commitments(a)(b)
|
$
|
10,703
|
$
|
8,507
|
|||||||
Unused revolving credit
lines(c)
|
|||||||||||
Commercial
|
30,732
|
26,300
|
|||||||||
Consumer − principally
credit cards
|
244,176
|
252,867
|
|||||||||
(a)
|
Excluded
investment commitments of $2,612 million and $3,501 million as of June 30,
2009 and December 31, 2008, respectively.
|
|
(b)
|
Included
a $1,053 million and $1,067 million commitment as of June 30, 2009 and
December 31, 2008, respectively, associated with a secured financing
arrangement that can increase to a maximum of $4,943 million based on the
asset volume under the arrangement.
|
|
(c)
|
Excluded
inventory financing arrangements, which may be withdrawn at our option, of
$13,427 million and $14,503 million as of June 30, 2009 and December 31,
2008, respectively.
|
At
June 30, 2009
|
||||||
Fair
value
|
||||||
(In
millions)
|
Assets
|
Liabilities
|
||||
Derivatives
accounted for as hedges under SFAS 133
|
||||||
Interest
rate contracts
|
$
|
3,870
|
$
|
4,348
|
||
Currency
exchange contracts
|
3,714
|
3,689
|
||||
Other
contracts
|
32
|
7
|
||||
7,616
|
8,044
|
|||||
Derivatives
not accounted for as hedges under SFAS 133
|
||||||
Interest
rate contracts
|
891
|
812
|
||||
Currency
exchange contracts
|
1,318
|
417
|
||||
Other
contracts
|
251
|
76
|
||||
2,460
|
1,305
|
|||||
FIN
39 netting adjustment(a)
|
(4,900
|
)
|
(4,978
|
)
|
||
Total
|
$
|
5,176
|
$
|
4,371
|
||
Derivatives
are classified in the captions “Other assets” and “Other liabilities” in
our financial statements.
|
(a)
|
FIN
39 permits
the netting of derivative receivables and payables when a legally
enforceable master netting agreement exists. Amounts included fair value
adjustments related to our own and counterparty credit risk. At June 30,
2009 and December 31, 2008, the cumulative adjustment for non-performance
risk was a gain of $78 million and $164 million,
respectively.
|
Three
months ended
June
30, 2009
|
Six
months ended
June
30, 2009
|
||||||||||||||
(In
millions)
|
Financial
statement caption
|
Gain
(loss)
on
hedging
derivatives
|
Gain
(loss)
on
hedged
items
|
Gain
(loss)
on
hedging
derivatives
|
Gain
(loss)
on
hedged
items
|
||||||||||
Interest
rate contracts
|
Interest
|
$
|
(4,243
|
)
|
$
|
4,260
|
$
|
(5,180
|
)
|
$
|
5,246
|
||||
Currency
exchange
|
|||||||||||||||
contracts
|
Interest
|
(91
|
)
|
83
|
(1,058
|
)
|
1,032
|
||||||||
Fair
value hedges resulted in $9 million and $40 million of ineffectiveness of
which $(48) million and $(75) million reflects amounts excluded from the
assessment of effectiveness for the three and six months ended June 30,
2009, respectively.
|
Three
months ended June 30, 2009
|
Gain
(loss)
recognized
in
OCI
|
Financial
statement caption
|
Gain
(loss)
reclassified
from
AOCI
into
earnings
|
||||||
(In
millions)
|
|
|
|
||||||
Cash
flow hedges
|
|||||||||
Interest
rate contracts
|
$
|
632
|
Interest
|
$
|
(603
|
)
|
|||
Currency
exchange contracts
|
1,553
|
Interest
|
997
|
||||||
Revenues
from services
|
273
|
||||||||
Commodity
contracts
|
14
|
||||||||
Total
|
$
|
2,199
|
$
|
667
|
Gain
(loss)
recognized
in
CTA
|
Gain
(loss)
reclassified
from
CTA
|
||||||||
|
|
|
|||||||
Net
investment hedges
|
|||||||||
Currency
exchange contracts
|
$
|
(5,485
|
)
|
Revenues
from services
|
$
|
9
|
|||
Six
months ended June 30, 2009
|
Gain
(loss)
recognized
in
OCI
|
Financial
statement caption
|
Gain
(loss)
reclassified
from
AOCI
into
earnings
|
||||||
(In
millions)
|
|
|
|
||||||
Cash
flow hedges
|
|||||||||
Interest
rate contracts
|
$
|
773
|
Interest
|
$
|
(1,090
|
)
|
|||
Currency
exchange contracts
|
2,122
|
Interest
|
996
|
||||||
Revenues
from services
|
4
|
||||||||
Commodity
contracts
|
15
|
||||||||
Total
|
$
|
2,910
|
$
|
(90
|
)
|
Gain
(loss)
recognized
in
CTA
|
Gain
(loss)
reclassified
from
CTA
|
||||||||
|
|
|
|||||||
Net
investment hedges
|
|||||||||
Currency
exchange contracts
|
$
|
(3,159
|
)
|
Revenues
from services
|
$
|
(30
|
)
|
||
Of
the total pre-tax amount recorded in AOCI, $3,258 million related to cash
flow hedges of forecasted transactions of which we expect to transfer
$1,750 million to earnings as an expense in the next 12 months
contemporaneously with the earnings effects of the related forecasted
transactions. In the first six months of 2009, we recognized insignificant
gains and losses related to hedged forecasted transactions and firm
commitments that did not occur by the end of the originally specified
period. At June 30, 2009, the maximum term of derivative instruments that
hedge forecasted transactions was 27 years and related to hedges of
anticipated interest payments associated with external
debt.
|
At
|
||||||||||||
June
30, 2009
|
December
31, 2008
|
|||||||||||
(In
millions)
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
||||||||
Consolidated, liquidating
securitization entities(a)
|
$
|
3,271
|
$
|
3,141
|
$
|
4,000
|
$
|
3,868
|
||||
Trinity(b)
|
7,720
|
9,341
|
9,192
|
11,623
|
||||||||
Penske Truck Leasing Co., L.P.
(PTL)(c)
|
−
|
−
|
7,444
|
1,339
|
||||||||
Other(d)
|
3,636
|
2,644
|
4,503
|
3,329
|
||||||||
$
|
14,627
|
$
|
15,126
|
$
|
25,139
|
$
|
20,159
|
|||||
(a)
|
If
the short-term credit rating of GE Capital or these entities were reduced
below A–1/P–1, we could be required to provide substitute liquidity for
those entities or provide funds to retire the outstanding commercial
paper. The maximum net amount that we could be required to provide in the
event of such a downgrade is determined by contract and totaled $3,120
million at June 30, 2009. The borrowings of these entities are reflected
in our Statement of Financial Position.
|
(b)
|
If
the long-term credit rating of GE Capital were to fall below AA-/Aa3 or
its short-term credit rating were to fall below A-1+/P-1, GE Capital could
be required to provide approximately $2,802 million to such entities as of
June 30, 2009 pursuant to letters of credit issued by GE Capital. To the
extent that the entities’ liabilities exceed the ultimate value of the
proceeds from the sale of their assets and the amount drawn under the
letters of credit, GE Capital could be required to provide such excess
amount. The borrowings of these entities are reflected in our Statement of
Financial Position.
|
(c)
|
In
the first quarter of 2009, we sold a 1% limited partnership interest in
PTL, a previously consolidated VIE, to Penske Truck Leasing Corporation,
the general partner of PTL, whose majority shareowner is a member of GE’s
Board of Directors. The disposition of the shares, coupled with our
resulting minority position on the PTL advisory committee and related
changes in our contractual rights, resulted in the deconsolidation of PTL.
We recognized a pre-tax gain on the sale of $296 million, including a gain
on the remeasurement of our retained investment of $189 million. The
measurement of the fair value of our retained investment in PTL was based
on a methodology that incorporated both discounted cash flow information
and market data. In applying this methodology, we utilized different
sources of information, including actual operating results, future
business plans, economic projections and market observable pricing
multiples of similar businesses. The resulting fair value reflected our
position as a noncontrolling shareowner at the conclusion of the
transaction.
|
(d)
|
A
majority of the remaining assets and liabilities of VIEs that are included
in our consolidated financial statements were acquired in transactions
subsequent to adoption of FIN 46(R) on January 1, 2004. Assets of these
entities consist of amortizing securitizations of financial assets
originated by acquirees in Australia and Japan, and real estate
partnerships. We have no recourse arrangements with these
entities.
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
Other assets(a)
|
$
|
8,171
|
$
|
1,897
|
|||||
Financing
receivables
|
525
|
974
|
|||||||
Total
investment
|
8,696
|
2,871
|
|||||||
Contractual
obligations to fund new investments
|
1,487
|
1,159
|
|||||||
Maximum
exposure to loss
|
$
|
10,183
|
$
|
4,030
|
|||||
(a)
|
At
June 30, 2009, our remaining investment in PTL of $6,126 million comprised
a 49.9% partnership interest of $973 million and loans and advances of
$5,153 million.
|
(In
millions)
|
Equipment
|
(a)(b)
|
Commercial
real
estate
|
Credit
card
receivables
|
(b)
|
Other
assets
|
Total
assets
|
|||||||||||
June
30, 2009
|
||||||||||||||||||
Asset
amount outstanding
|
$
|
11,396
|
$
|
7,634
|
$
|
23,806
|
$
|
1,976
|
$
|
44,812
|
||||||||
Included
within the amount above are
|
||||||||||||||||||
retained interests
of:
|
||||||||||||||||||
Financing
receivables(c)
|
−
|
−
|
2,565
|
−
|
2,565
|
|||||||||||||
Investment
securities
|
219
|
13
|
5,940
|
48
|
6,220
|
|||||||||||||
December
31, 2008
|
||||||||||||||||||
Asset
amount outstanding
|
$
|
13,298
|
$
|
7,970
|
$
|
26,046
|
$
|
2,782
|
$
|
50,096
|
||||||||
Included
within the amount above are
|
||||||||||||||||||
retained interests
of:
|
||||||||||||||||||
Financing
receivables(c)
|
−
|
–
|
3,802
|
–
|
3,802
|
|||||||||||||
Investment
securities
|
148
|
16
|
4,806
|
61
|
5,031
|
|||||||||||||
(a)
|
Included
inventory floorplan receivables.
|
(b)
|
As
permitted by the terms of the applicable trust documents, in June 2009, we
transferred $268 million of floorplan financing receivables to the GE
Dealer Floorplan Master Note Trust and $145 million of credit card
receivables to the GE Capital Credit Card Master Note Trust in exchange
for additional subordinated interests. These actions had the effect of
maintaining the ‘Aaa’ ratings of the securities issued by these
entities.
|
(c)
|
Uncertificated
seller’s interests.
|
(In
millions)
|
Equipment
|
Commercial
real
estate
|
Credit
card
receivables
|
Other
assets
|
|||||||||||
June
30, 2009
|
|||||||||||||||
Discount
rate(a)
|
10.7
|
%
|
57.4
|
%
|
11.6
|
%
|
9.2
|
%
|
|||||||
Effect
of
|
|||||||||||||||
10%
adverse change
|
$
|
(5
|
)
|
$
|
(1
|
)
|
$
|
(51
|
)
|
$
|
−
|
||||
20%
adverse change
|
(9
|
)
|
(2
|
)
|
(100
|
)
|
−
|
||||||||
Prepayment
rate(a)(b)
|
6.00
|
%
|
0.7
|
%
|
8.9
|
%
|
37.8
|
%
|
|||||||
Effect
of
|
|||||||||||||||
10%
adverse change
|
$
|
−
|
$
|
−
|
$
|
(72
|
)
|
$
|
−
|
||||||
20%
adverse change
|
(1
|
)
|
−
|
(138
|
)
|
−
|
|||||||||
Estimate
of credit losses(a)
|
0.4
|
%
|
5.9
|
%
|
15.5
|
%
|
0.2
|
%
|
|||||||
Effect
of
|
|||||||||||||||
10%
adverse change
|
$
|
−
|
$
|
−
|
$
|
(216
|
)
|
$
|
−
|
||||||
20%
adverse change
|
(1
|
)
|
−
|
(428
|
)
|
−
|
|||||||||
Remaining
weighted average
|
|||||||||||||||
asset
lives (in months)
|
15
|
79
|
10
|
2
|
|||||||||||
Net
credit losses for the quarter
|
$
|
−
|
$
|
14
|
$
|
860
|
$
|
−
|
|||||||
Delinquencies
|
−
|
12
|
1,362
|
1
|
|||||||||||
December
31, 2008
|
|||||||||||||||
Discount
rate(a)
|
16.7
|
%
|
54.2
|
%
|
15.1
|
%
|
13.4
|
%
|
|||||||
Effect
of
|
|||||||||||||||
10%
adverse change
|
$
|
(6
|
)
|
$
|
(1
|
)
|
$
|
(53
|
)
|
$
|
−
|
||||
20%
adverse change
|
(12
|
)
|
(2
|
)
|
(105
|
)
|
(1
|
)
|
|||||||
Prepayment
rate(a)(b)
|
10.0
|
%
|
1.5
|
%
|
9.6
|
%
|
43.8
|
%
|
|||||||
Effect
of
|
|||||||||||||||
10%
adverse change
|
$
|
(1
|
)
|
$
|
−
|
$
|
(60
|
)
|
$
|
–
|
|||||
20%
adverse change
|
(1
|
)
|
−
|
(118
|
)
|
(1
|
)
|
||||||||
Estimate
of credit losses(a)
|
0.4
|
%
|
4.9
|
%
|
16.2
|
%
|
0.1
|
%
|
|||||||
Effect
of
|
|||||||||||||||
10%
adverse change
|
$
|
(1
|
)
|
$
|
−
|
$
|
(223
|
)
|
$
|
–
|
|||||
20%
adverse change
|
(3
|
)
|
−
|
(440
|
)
|
–
|
|||||||||
Remaining
weighted average
|
|||||||||||||||
asset
lives (in months)
|
20
|
70
|
10
|
3
|
|||||||||||
Net
credit losses for the year
|
$
|
4
|
$
|
7
|
$
|
1,512
|
$
|
−
|
|||||||
Delinquencies
|
27
|
58
|
1,833
|
8
|
|||||||||||
(a)
|
Based
on weighted averages.
|
(b)
|
Represented
a payment rate on credit card receivables, inventory financing receivables
(included within equipment) and trade receivables (included within other
assets).
|
Three
months ended June 30
|
Six
months ended June 30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Cash
flows on transfers
|
||||||||||||
Proceeds
from new transfers
|
$
|
3,200
|
$
|
2,333
|
$
|
3,200
|
$
|
3,656
|
||||
Proceeds
from collections reinvested
|
||||||||||||
in revolving period
transfers
|
10,086
|
14,832
|
21,313
|
29,532
|
||||||||
Cash
flows on retained interests recorded
|
||||||||||||
as investment
securities
|
1,140
|
1,002
|
2,017
|
1,851
|
||||||||
Effect
on Revenues from services
|
||||||||||||
Net
gain on sale
|
$
|
360
|
$
|
273
|
$
|
640
|
$
|
622
|
||||
Change
in fair value of retained interests
|
||||||||||||
recorded in
earnings
|
85
|
(18
|
)
|
172
|
(93
|
)
|
||||||
Other-than-temporary
impairments
|
(8
|
)
|
(1
|
)
|
(16
|
)
|
(1
|
)
|
Three
months ended
June
30
(Unaudited)
|
Six
months ended
June
30
(Unaudited)
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
||||||||||||
CLL(a)
|
$
|
5,219
|
$
|
7,217
|
$
|
10,797
|
$
|
13,823
|
||||
Consumer(a)
|
4,883
|
6,656
|
9,630
|
13,096
|
||||||||
Real
Estate
|
1,013
|
1,964
|
1,988
|
3,847
|
||||||||
Energy
Financial Services
|
490
|
989
|
1,134
|
1,759
|
||||||||
GECAS
|
1,192
|
1,155
|
2,336
|
2,425
|
||||||||
Total segment
revenues
|
12,797
|
17,981
|
25,885
|
34,950
|
||||||||
GECC
corporate items and eliminations
|
(119
|
)
|
202
|
504
|
510
|
|||||||
Total
revenues
|
12,678
|
18,183
|
26,389
|
35,460
|
||||||||
Less
portion of revenues not included in GECC
|
(116
|
)
|
(34
|
)
|
(218
|
)
|
(188
|
)
|
||||
Total
revenues in GECC
|
$
|
12,562
|
$
|
18,149
|
$
|
26,171
|
$
|
35,272
|
||||
Segment
profit
|
||||||||||||
CLL(a)
|
$
|
232
|
$
|
908
|
$
|
454
|
$
|
1,596
|
||||
Consumer(a)
|
243
|
1,065
|
970
|
2,056
|
||||||||
Real
Estate
|
(237
|
)
|
484
|
(410
|
)
|
960
|
||||||
Energy
Financial Services
|
65
|
167
|
140
|
300
|
||||||||
GECAS
|
287
|
279
|
555
|
670
|
||||||||
Total segment
profit
|
590
|
2,903
|
1,709
|
5,582
|
||||||||
GECC corporate items and
eliminations(b)(c)
|
(171
|
)
|
(92
|
)
|
(279
|
)
|
(267
|
)
|
||||
Less
portion of segment profit not included in GECC
|
(44
|
)
|
(61
|
)
|
(81
|
)
|
(84
|
)
|
||||
Earnings
from continuing operations attributable to GECC
|
375
|
2,750
|
1,349
|
5,231
|
||||||||
Loss
from discontinued operations, net of taxes,
|
||||||||||||
attributable to
GECC
|
(194
|
)
|
(336
|
)
|
(197
|
)
|
(382
|
)
|
||||
Total
net earnings attributable to GECC
|
$
|
181
|
$
|
2,414
|
$
|
1,152
|
$
|
4,849
|
||||
(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)
|
Included
restructuring and other charges of $0.1 billion in both the first six
months of 2009 and 2008, primarily related to CLL and
Consumer.
|
|
(c)
|
Included
$0.1 billion and an insignificant amount during the first six months of
2009 and 2008, respectively, of net losses, related to our treasury
operations.
|
See
accompanying notes to condensed, consolidated financial
statements.
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
$
|
5,219
|
$
|
7,217
|
$
|
10,797
|
$
|
13,823
|
||||
Less
portion of CLL not included in GECC
|
(101
|
)
|
(27
|
)
|
(196
|
)
|
(187
|
)
|
||||
Total revenues in
GECC
|
$
|
5,118
|
$
|
7,190
|
$
|
10,601
|
$
|
13,636
|
||||
Segment
profit
|
$
|
232
|
$
|
908
|
$
|
454
|
$
|
1,596
|
||||
Less
portion of CLL not included in GECC
|
(35
|
)
|
(54
|
)
|
(70
|
)
|
(81
|
)
|
||||
Total segment profit in
GECC
|
$
|
197
|
$
|
854
|
$
|
384
|
$
|
1,515
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
June
30,
2008
|
December
31,
2008
|
||||||
Total
assets
|
$
|
219,378
|
$
|
241,375
|
$
|
228,176
|
|||
Less
portion of CLL not included in GECC
|
(2,146
|
)
|
(1,506
|
)
|
(2,015
|
)
|
|||
Total assets in
GECC
|
$
|
217,232
|
$
|
239,869
|
$
|
226,161
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
||||||||||||
Americas
|
$
|
2,699
|
$
|
3,049
|
$
|
4,981
|
$
|
6,030
|
||||
Europe
|
1,324
|
1,545
|
2,465
|
2,962
|
||||||||
Asia
|
586
|
796
|
1,090
|
1,413
|
||||||||
Other
|
610
|
1,827
|
2,261
|
3,418
|
||||||||
Segment
profit
|
||||||||||||
Americas
|
$
|
169
|
$
|
534
|
$
|
156
|
$
|
1,106
|
||||
Europe
|
138
|
218
|
202
|
410
|
||||||||
Asia
|
36
|
174
|
46
|
219
|
||||||||
Other
|
(111
|
)
|
(18
|
)
|
50
|
(139
|
)
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
June
30,
2008
|
December
31,
2008
|
||||||
Total
assets
|
|||||||||
Americas
|
$
|
126,215
|
$
|
135,435
|
$
|
135,253
|
|||
Europe
|
53,723
|
60,072
|
49,734
|
||||||
Asia
|
20,353
|
25,261
|
23,127
|
||||||
Other
|
19,087
|
20,607
|
20,062
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
$
|
4,883
|
$
|
6,656
|
$
|
9,630
|
$
|
13,096
|
||||
Less
portion of Consumer not included in GECC
|
−
|
−
|
−
|
−
|
||||||||
Total revenues in
GECC
|
$
|
4,883
|
$
|
6,656
|
$
|
9,630
|
$
|
13,096
|
||||
Segment
profit
|
$
|
243
|
$
|
1,065
|
$
|
970
|
$
|
2,056
|
||||
Less
portion of Consumer not included in GECC
|
(8
|
)
|
(5
|
)
|
(9
|
)
|
(7
|
)
|
||||
Total segment profit in
GECC
|
$
|
235
|
$
|
1,060
|
$
|
961
|
$
|
2,049
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
June
30,
2008
|
December
31,
2008
|
||||||
Total
assets
|
$
|
180,538
|
$
|
226,283
|
$
|
187,927
|
|||
Less
portion of Consumer not included in GECC
|
(167
|
)
|
135
|
(167
|
)
|
||||
Total assets in
GECC
|
$
|
180,371
|
$
|
226,418
|
$
|
187,760
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
$
|
1,013
|
$
|
1,964
|
$
|
1,988
|
$
|
3,847
|
||||
Less
portion of Real Estate not included in GECC
|
(13
|
)
|
(7
|
)
|
(19
|
)
|
−
|
|||||
Total revenues in
GECC
|
$
|
1,000
|
$
|
1,957
|
$
|
1,969
|
$
|
3,847
|
||||
Segment
profit
|
$
|
(237
|
)
|
$
|
484
|
$
|
(410
|
)
|
$
|
960
|
||
Less
portion of Real Estate not included in GECC
|
−
|
(1
|
)
|
(1
|
)
|
6
|
||||||
Total segment profit in
GECC
|
$
|
(237
|
)
|
$
|
483
|
$
|
(411
|
)
|
$
|
966
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
June
30,
2008
|
December
31,
2008
|
||||||
Total
assets
|
$
|
83,960
|
$
|
90,611
|
$
|
85,266
|
|||
Less
portion of Real Estate not included in GECC
|
(155
|
)
|
(131
|
)
|
(357
|
)
|
|||
Total assets in
GECC
|
$
|
83,805
|
$
|
90,480
|
$
|
84,909
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
$
|
490
|
$
|
989
|
$
|
1,134
|
$
|
1,759
|
||||
Less
portion of Energy Financial Services not included in GECC
|
(1
|
)
|
1
|
(2
|
)
|
−
|
||||||
Total revenues in
GECC
|
$
|
489
|
$
|
990
|
$
|
1,132
|
$
|
1,759
|
||||
Segment
profit
|
$
|
65
|
$
|
167
|
$
|
140
|
$
|
300
|
||||
Less
portion of Energy Financial Services not included in GECC
|
−
|
1
|
−
|
1
|
||||||||
Total segment profit in
GECC
|
$
|
65
|
$
|
168
|
$
|
140
|
$
|
301
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
June
30,
2008
|
December
31,
2008
|
||||||
Total
assets
|
$
|
22,956
|
$
|
21,580
|
$
|
22,079
|
|||
Less
portion of Energy Financial Services not included in GECC
|
(70
|
)
|
(52
|
)
|
(54
|
)
|
|||
Total assets in
GECC
|
$
|
22,886
|
$
|
21,528
|
$
|
22,025
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Revenues
|
$
|
1,192
|
$
|
1,155
|
$
|
2,336
|
$
|
2,425
|
||||
Less
portion of GECAS not included in GECC
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
||||
Total revenues in
GECC
|
$
|
1,191
|
$
|
1,154
|
$
|
2,335
|
$
|
2,424
|
||||
Segment
profit
|
$
|
287
|
$
|
279
|
$
|
555
|
$
|
670
|
||||
Less
portion of GECAS not included in GECC
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
(3
|
)
|
||||
Total segment profit in
GECC
|
$
|
286
|
$
|
277
|
$
|
554
|
$
|
667
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
June
30,
2008
|
December
31,
2008
|
||||||
Total
assets
|
$
|
50,337
|
$
|
48,383
|
$
|
49,455
|
|||
Less
portion of GECAS not included in GECC
|
(197
|
)
|
(232
|
)
|
(198
|
)
|
|||
Total assets in
GECC
|
$
|
50,140
|
$
|
48,151
|
$
|
49,257
|
Three
months ended
June
30
|
Six
months ended
June
30
|
|||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||
Loss
from discontinued
|
||||||||||||
operations, net of
taxes
|
$
|
(194
|
)
|
$
|
(336
|
)
|
$
|
(197
|
)
|
$
|
(382
|
)
|
·
|
We
completed the exchange of our Consumer businesses in Austria and Finland,
the credit card and auto businesses in the U.K., and the credit card
business in Ireland for a 100% ownership interest in Interbanca S.p.A., an
Italian corporate bank;
|
·
|
In
order to improve tangible capital and reduce leverage, General Electric
Company (GE), our ultimate parent, contributed $9.5 billion to GECS, of
which $8.8 billion was subsequently contributed to
us;
|
·
|
The
U.S. dollar was weaker at June 30, 2009 than at December 31, 2008,
increasing the translated levels of our non-U.S. dollar assets and
liabilities;
|
·
|
We
deconsolidated PTL following our partial sale during the first quarter of
2009;
|
·
|
We
purchased a controlling interest in BAC in the second quarter of 2009;
and
|
·
|
At
GECS, collections on financing receivables exceeded originations by
approximately $25 billion in the first half of
2009.
|
Financing
receivables at
|
Nonearning
receivables at
|
Allowance
for losses at
|
||||||||||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
June
30,
2009
|
December
31,
2008
|
June
30,
2009
|
December
31,
2008
|
||||||||||||
CLL(a)
|
||||||||||||||||||
Americas
|
$
|
96,352
|
$
|
104,462
|
$
|
3,023
|
$
|
1,944
|
$
|
1,116
|
$
|
824
|
||||||
Europe
|
40,549
|
36,972
|
1,065
|
345
|
448
|
288
|
||||||||||||
Asia
|
14,057
|
16,683
|
533
|
306
|
199
|
163
|
||||||||||||
Other
|
751
|
786
|
15
|
2
|
6
|
2
|
||||||||||||
Consumer(a)
|
||||||||||||||||||
Non-U.S.
residential
|
||||||||||||||||||
mortgages
|
62,587
|
60,753
|
4,878
|
3,321
|
831
|
383
|
||||||||||||
Non-U.S.
installment
|
||||||||||||||||||
and
revolving credit
|
25,485
|
24,441
|
524
|
413
|
1,147
|
1,051
|
||||||||||||
U.S.
installment and
|
||||||||||||||||||
revolving
credit
|
23,939
|
27,645
|
818
|
758
|
1,575
|
1,700
|
||||||||||||
Non-U.S.
auto
|
14,853
|
18,168
|
84
|
83
|
269
|
222
|
||||||||||||
Other
|
13,218
|
11,541
|
289
|
175
|
250
|
226
|
||||||||||||
Real Estate(b)
|
46,018
|
46,735
|
1,325
|
194
|
570
|
301
|
||||||||||||
Energy
Financial
|
||||||||||||||||||
Services
|
8,471
|
8,355
|
241
|
241
|
91
|
58
|
||||||||||||
GECAS
|
14,992
|
15,326
|
204
|
146
|
61
|
60
|
||||||||||||
Other
|
3,324
|
4,031
|
70
|
38
|
27
|
28
|
||||||||||||
Total
|
$
|
364,596
|
$
|
375,898
|
$
|
13,069
|
$
|
7,966
|
$
|
6,590
|
$
|
5,306
|
||||||
(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)
|
Financing
receivables included $660 million and $731 million of construction loans
at June 30, 2009 and December 31, 2008, respectively.
|
Nonearning
receivables as
a
percent of financing receivables
|
Allowance
for losses as a percent of nonearning
receivables
|
Allowance
for losses as a percent of total financing
receivables
|
||||||||||||||||
June
30,
2009
|
December
31,
2008
|
June
30,
2009
|
December
31,
2008
|
June
30,
2009
|
December
31,
2008
|
|||||||||||||
CLL(a)
|
||||||||||||||||||
Americas
|
3.1
|
%
|
1.9
|
%
|
36.9
|
%
|
42.4
|
%
|
1.2
|
%
|
0.8
|
%
|
||||||
Europe
|
2.6
|
0.9
|
42.1
|
83.5
|
1.1
|
0.8
|
||||||||||||
Asia
|
3.8
|
1.8
|
37.3
|
53.3
|
1.4
|
1.0
|
||||||||||||
Other
|
2.0
|
0.3
|
40.0
|
100.0
|
0.8
|
0.3
|
||||||||||||
Consumer(a)
|
||||||||||||||||||
Non-U.S.
residential
|
||||||||||||||||||
mortgages
|
7.8
|
5.5
|
17.0
|
11.5
|
1.3
|
0.6
|
||||||||||||
Non-U.S.
installment
|
||||||||||||||||||
and
revolving credit
|
2.1
|
1.7
|
218.9
|
254.5
|
4.5
|
4.3
|
||||||||||||
U.S.
installment and
|
||||||||||||||||||
revolving
credit
|
3.4
|
2.7
|
192.5
|
224.3
|
6.6
|
6.1
|
||||||||||||
Non-U.S.
auto
|
0.6
|
0.5
|
320.2
|
267.5
|
1.8
|
1.2
|
||||||||||||
Other
|
2.2
|
1.5
|
86.5
|
129.1
|
1.9
|
2.0
|
||||||||||||
Real
Estate
|
2.9
|
0.4
|
43.0
|
155.2
|
1.2
|
0.6
|
||||||||||||
Energy
Financial
|
||||||||||||||||||
Services
|
2.8
|
2.9
|
37.8
|
24.1
|
1.1
|
0.7
|
||||||||||||
GECAS
|
1.4
|
1.0
|
29.9
|
41.1
|
0.4
|
0.4
|
||||||||||||
Other
|
2.1
|
0.9
|
38.6
|
73.7
|
0.8
|
0.7
|
||||||||||||
Total(b)
|
3.6
|
2.1
|
50.4
|
66.6
|
1.8
|
1.4
|
||||||||||||
(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)
|
Excluding
the effects of the acquisitions of Interbanca S.p.A. and BAC, the ratio of
allowance for losses as a percent of total financing receivables would
have been 1.9% at June 30, 2009.
|
At
|
|||||||||
(In
millions)
|
June
30,
2009
|
December
31,
2008
|
|||||||
Loans
requiring allowance for losses
|
$
|
5,657
|
$
|
2,712
|
|||||
Loans
expected to be fully recoverable
|
2,425
|
871
|
|||||||
Total
impaired loans
|
$
|
8,082
|
$
|
3,583
|
|||||
Allowance
for losses (specific reserves)
|
$
|
1,321
|
$
|
635
|
|||||
Average
investment during the period
|
5,836
|
2,064
|
|||||||
Interest
income earned while impaired(a)
|
55
|
48
|
|||||||
(a)
|
Recognized
principally on cash basis.
|
Delinquency
rates at
|
||||||||||||||
June
30,
2009(a)
|
December
31,
2008
|
June
30,
2008
|
||||||||||||
Equipment
Financing
|
2.78
|
%
|
2.17
|
%
|
1.48
|
%
|
||||||||
Consumer
|
8.73
|
7.43
|
5.91
|
|||||||||||
U.S.
|
6.99
|
7.14
|
5.55
|
|||||||||||
Non-U.S.
|
9.45
|
7.57
|
6.05
|
|||||||||||
(a)
|
Subject
to update.
|
·
|
GECS
cash and cash equivalents were $50 billion at June 30, 2009, and committed
credit lines were $55.4 billion. GECS intends to maintain committed credit
lines and cash in excess of GECS commercial paper borrowings going
forward;
|
·
|
We
achieved our targeted 2009 reduction of commercial paper borrowings ahead
of plan by reducing GECS commercial paper borrowings to $50 billion at
June 30, 2009;
|
·
|
GECS
completed its funding related to its long-term debt funding target of $45
billion for 2009 and have issued $20 billion of its targeted long-term
debt funding for 2010;
|
·
|
During
the first six months of 2009, GECS issued an aggregate of $9.2 billion of
long-term debt that is not guaranteed under the Federal Deposit Insurance
Corporation’s (FDIC) Temporary Liquidity Guarantee Program (TLGP).
Subsequent to June 30, 2009, we issued an additional $3 billion of debt
that is not guaranteed under the
TLGP;
|
·
|
GECS
is managing collections versus originations to help support liquidity
needs. In the first half of 2009, collections have exceeded originations
by approximately $25 billion;
|
·
|
In
May 2009, we issued Series 2009-1, Class A Notes, in the amount of $1.0
billion utilizing our GE Capital Credit Card Master Note Trust
securitization platform. The Class A Notes were eligible collateral under
the Federal Reserve Bank of New York’s Term Asset-Backed Securities Loan
Facility (“TALF”). Depending on market conditions and terms, we may
securitize additional credit card assets, floorplan receivables, equipment
receivables and commercial mortgage loans, in transactions for which
investors can access TALF;
|
·
|
In
February 2009, GE announced the reduction of its quarterly stock dividend
by 68% from $0.31 per share to $0.10 per share, effective in the third
quarter of 2009, which will save the company approximately $4 billion
during the remainder of 2009 and approximately $9 billion annually
thereafter;
|
·
|
In
September 2008, GECS reduced its dividend to GE and GE suspended its stock
repurchase program. Effective January 2009, GECS fully suspended its
dividend to GE;
|
·
|
In
October 2008, GE raised $15 billion in cash through common and preferred
stock offerings and contributed $15 billion to GECS, including $9.5
billion in the first quarter of 2009 (of which $8.8 billion was further
contributed to GE Capital through capital contribution and share
issuance), in order to improve tangible capital and reduce leverage. We do
not anticipate additional contributions in 2009;
and
|
·
|
GECS
registered in October 2008 to use the Federal Reserve’s Commercial Paper
Funding Facility (CPFF) for up to $83 billion, which is available through
February 1, 2010.
|
·
|
Controlling
new originations in GE Capital to reduce capital and funding
requirements;
|
·
|
Using
part of our available cash balance;
|
·
|
Pursuing
alternative funding sources, including deposits and asset-backed
fundings;
|
·
|
Using
our bank credit lines which, with our cash, we plan to maintain in excess
of our outstanding commercial paper;
and
|
·
|
Obtaining
additional capital from GE, including from funds retained as a result of
the reduction in GE’s dividend announced in February 2009 or future
dividend reductions.
|
Exhibit
12
|
Computation
of Ratio of Earnings to Fixed Charges.*
|
|
Exhibit
31(a)
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange
Act of 1934, as Amended.*
|
|
Exhibit
31(b)
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange
Act of 1934, as Amended.*
|
|
Exhibit
32
|
Certification
Pursuant to 18 U.S.C. Section 1350.*
|
|
Exhibit
99
|
Financial
Measures That Supplement Generally Accepted Accounting
Principles.*
|
|
*
Filed electronically herewith.
|
General
Electric Capital Corporation
(Registrant)
|
|||
August
3, 2009
|
/s/Michael
A. Neal
|
||
Date
|
Michael
A. Neal
Chief
Executive Officer
|
||