Investment Securities

3 Months Ended

Mar. 31, 2012

Investments, Debt and Equity Securities [Abstract]

Investment Securities

3.INVESTMENT SECURITIES

Substantially all of our investment securities are classified as available-for-sale. These comprise mainly investment grade debt securities supporting obligations to annuitants, policyholders and holders of guaranteed investment contracts (GICs) in our run-off insurance operations and Trinity,investment securities at our treasury operations and investments held in our Commercial Lending and Leasing (CLL) business collateralized by senior secured loans of high-quality, middle-market companies in a variety of industries. We do not have any securities classified as held to maturity.

	At
	March 31, 2012								December 31, 2011
			Gross		Gross						Gross		Gross
	Amortized		unrealized		unrealized		Estimated		Amortized		unrealized		unrealized		Estimated
(In millions)	cost		gains		losses		fair value		cost		gains		losses		fair value
GE
Debt – U.S. corporate	$	1	$	0	$	0	$	1	$	0	$	0	$	0	$	0
Equity – available-for-sale		17		0		0		17		18		0		0		18
		18		0		0		18		18		0		0		18
GECC
Debt
U.S. corporate		20,758		3,236		(279)		23,715		20,748		3,432		(410)		23,770
State and municipal		3,179		385		(120)		3,444		3,027		350		(143)		3,234
Residential mortgage-
backed(a)		2,555		175		(220)		2,510		2,711		184		(286)		2,609
Commercial mortgage-backed		2,989		169		(177)		2,981		2,913		162		(247)		2,828
Asset-backed		5,376		76		(133)		5,319		5,102		32		(164)		4,970
Corporate – non-U.S.		2,514		142		(136)		2,520		2,414		126		(207)		2,333
Government – non-U.S.		2,171		125		(23)		2,273		2,488		129		(86)		2,531
U.S. government and federal
agency		4,073		77		(1)		4,149		3,974		84		0		4,058
Retained interests		28		6		0		34		25		10		0		35
Equity
Available-for-sale		530		105		(16)		619		713		75		(38)		750
Trading		250		0		0		250		241		0		0		241
		44,423		4,496		(1,105)		47,814		44,356		4,584		(1,581)		47,359
Eliminations		(3)		0		0		(3)		(3)		0		0		(3)
Total	$	44,438	$	4,496	$	(1,105)	$	47,829	$	44,371	$	4,584	$	(1,581)	$	47,374

(a)Substantially collateralized by U.S. mortgages. Of our total residential mortgage-backed securities (RMBS) portfolio at March 31, 2012, $1,607 million relates to securities issued by government-sponsored entities and $903 million relates to securities of private label issuers. Securities issued by private label issuers are collateralized primarily by pools of individual direct mortgage loans of financial institutions.

The fair value of investment securities increased to $47,829 million at March 31, 2012, from $47,374 million at December 31, 2011, primarily due to the impact of lower interest rates and additional purchases in our CLL business of investments collateralized by senior secured loans of high-quality, middle-market companies in a variety of industries.

The following tables present the estimated fair values and gross unrealized losses of our available-for-sale investment securities.

	In loss position for
	Less than 12 months					12 months or more
			Gross					Gross
	Estimated		unrealized			Estimated		unrealized
(In millions)	fair value		losses		(a)	fair value		losses		(a)
March 31, 2012
Debt
U.S. corporate	$	922	$	(155)		$	732	$	(124)
State and municipal		136		(2)			252		(118)
Residential mortgage-backed		68		0			804		(220)
Commercial mortgage-backed		165		(11)			1,111		(166)
Asset-backed		70		(2)			795		(131)
Corporate – non-U.S.		255		(10)			621		(126)
Government – non-U.S.		508		(2)			184		(21)
U.S. government and federal agency		231		(1)			0		0
Retained interests		5		0			0		0
Equity		87		(15)			7		(1)
Total	$	2,447	$	(198)		$	4,506	$	(907)
December 31, 2011
Debt
U.S. corporate	$	1,435	$	(241)		$	836	$	(169)
State and municipal		87		(1)			307		(142)
Residential mortgage-backed		219		(9)			825		(277)
Commercial mortgage-backed		244		(23)			1,320		(224)
Asset-backed		100		(7)			850		(157)
Corporate – non-U.S.		330		(28)			607		(179)
Government – non-U.S.		906		(5)			203		(81)
U.S. government and federal agency		502		0			0		0
Retained interests		0		0			0		0
Equity		440		(38)			0		0
Total	$	4,263	$	(352)		$	4,948	$	(1,229)

• Includes gross unrealized losses at March 31, 2012 of $(195) million related to securities that had other-than-temporary impairments recognized in a prior period.

We regularly review investment securities for impairment using both qualitative and quantitative criteria. We presently do not intend to sell the vast majority of our debt securities and believe that it is not more likely than not that we will be required to sell these securities that are in an unrealized loss position before recovery of our amortized cost. We believe that the unrealized loss associated with our equity securities will be recovered within the foreseeable future. The methodologies and significant inputs used to measure the amount of credit loss for our investment securities during thethree months ended March 31, 2012 have not changed from those described in our 2011 consolidated financial statements. See Note 3 in our 2011 consolidated financial statements for additional information regarding these methodologies and inputs.

During the first quarter of 2012, we recorded pre-tax,other-than-temporary impairments of $32 million, which were recorded through earnings ($7 million relates to equity securities). At January 1, 2012, cumulative impairments recognized in earnings associated with debt securities still held were $726 million. During the firstquarter, we recognized first-time impairments of $7 million and incremental charges on previously impaired securities of $5 million. These amounts included $136 million related to securities that were subsequently sold.

During the first quarter of 2011, we recorded pre-tax,other-than-temporary impairments of $71 million, of which $64 million was recorded through earnings ($5 million relates to equity securities)and $7 million was recorded in accumulated other comprehensive income (AOCI). At January 1, 2011, cumulative impairments recognized in earnings associated with debt securities still held were $500 million. During the first quarter of 2011, we recognized first-time impairments of $1 million and incremental charges on previously impaired securities of $58 million. These amounts included $23 million related to securities that were subsequently sold.

Contractual Maturities of GECC Investment in Available-for-Sale Debt Securities (Excluding Mortgage-
Backed and Asset-Backed Securities)
	Amortized		Estimated
(In millions)	cost		fair value
Due in
2012	$	2,717	$	2,748
2013-2016		7,832		7,925
2017-2021		4,373		4,730
2022 and later		17,766		20,691

We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

Supplemental information about gross realized gains and losses on available-for-sale investment securities follows.

	Three months ended March 31
(In millions)	2012		2011
GE
Gains	$	0	$	0
Losses, including impairments		0		0
Net		0		0
GECC
Gains		38		116
Losses, including impairments		(70)	$	(71)
Net		(32)		45
Total	$	(32)	$	45

Although we generally do not have the intent to sell any specific securities at the end of the period, in the ordinary course of managing our investment securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements and the funding of claims and obligations to policyholders. In some of our bank subsidiaries, we maintain a certain level of purchases and sales volume principally of non-U.S. government debt securities. In these situations, fair value approximates carrying value for these securities.

Proceeds from investment securities sales and early redemptions by issuers totaled $3,762 million and $5,139 million in the first quarters of 2012 and 2011, respectively, principally from the sales of short-term securities in our bank subsidiaries and treasury operations.

We recognized pre-tax gains (losses) on trading securities of $(23) million and $3 million in the first quarters of 2012 and 2011, respectively.