VARIABLE INTEREST ENTITIES

A VIE is an entity that has one of three characteristics: (1) it is controlled by someone other than its shareowners or partners, (2) its shareowners or partners are not economically exposed to the entity's earnings (for example, they are protected against losses), or (3) it was thinly capitalized when it was formed.

In the normal course of business we become involved with VIEs either because we help create them or we invest in them. Our VIEs either provide goods and services to customers or provide financing to third parties for the purchase of GE goods and services. If we control the VIE, we consolidate it and provide disclosure below. However, if the VIE is a business and use of its assets is not limited to settling its liabilities, ongoing disclosures are not required.

CONSOLIDATED VARIABLE INTEREST ENTITIES

Our most significant consolidated VIEs are the three joint ventures that were formed as part of the Alstom acquisition. These joint ventures include grid technology, renewable energy, and global nuclear and French steam power and have combined assets, liabilities and redeemable non-controlling interest as of June 30, 2017 and December 31, 2016 of $16,193 million, $9,006 million and $2,894 million and $14,460 million, $9,922 million and $2,709 million, respectively. These joint ventures are considered VIEs because the equity held by Alstom does not participate fully in the earnings of the ventures due to contractual features allowing Alstom to sell their interests back to GE. We consolidate these ventures because we control all their significant activities. These joint ventures are in all other respects regular businesses and are therefore exempt from ongoing disclosure requirements for consolidated VIEs provided below.

The table below provides information about consolidated VIEs that are subject to ongoing disclosure requirements. Substantially all of these entities were created to help our customers finance the purchase of GE goods and services or to purchase GE customer notes receivable arising from sales of GE goods and services. These entities have no features that could expose us to losses that could significantly exceed the difference between the consolidated assets and liabilities.



ASSETS AND LIABILITIES OF CONSOLIDATED VIEs
			GE Capital
(In millions)	GE		Customer Notes receivables(a)		Other		Total

June 30, 2017
Assets
Financing receivables, net	$	—	$	—	$	881	$	881
Current receivables	56		560		—		616
Investment securities	—		—		1,004		1,004
Other assets	587		1,320		2,101		4,008
Total	$	643	$	1,880	$	3,986	$	6,509

Liabilities
Borrowings	$	38	$	—	$	1,134	$	1,172
Non-recourse borrowings	—		667		16		683
Other liabilities	494		1,185		1,555		3,234
Total	$	532	$	1,852	$	2,705	$	5,089

December 31, 2016
Assets
Financing receivables, net	$	—	$	—	$	1,035	$	1,035
Current receivables	57		670		—		727
Investment securities	—		—		982		982
Other assets	492		1,122		1,747		3,361
Total	$	549	$	1,792	$	3,764	$	6,105

Liabilities
Borrowings	$	1	$	—	$	818	$	819
Non-recourse borrowings	—		401		16		417
Other liabilities	457		1,378		1,482		3,317
Total	$	458	$	1,779	$	2,316	$	4,553


(a)	Two funding vehicles established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt.

Total revenues from our consolidated VIEs were $256 million and $439 million for the three months ended June 30, 2017 and 2016, respectively and $508 million and $794 million in the six months ended June 30, 2017 and 2016, respectively. Related expenses consisted primarily of cost of goods and services of $83 million and $257 million for the three months ended June 30, 2017 and 2016, respectively and $178 million and $601 million in the six months ended June 30, 2017 and 2016, respectively.

Where we provide servicing for third-party investors, we are contractually permitted to commingle cash collected from customers on financing receivables sold to third-party investors with our own cash prior to payment to third-party investors, provided our short-term credit rating does not fall below A-1/P1. These third-party investors also owe us amounts for purchased financial assets and scheduled interest and principal payments, At June 30, 2017 and December 31, 2016, the amounts of commingled cash owed to the third-party investors were $1,123 million and $1,117 million, respectively, and the amounts owed to us by third-party investors were $10 million and $5 million, respectively.

UNCONSOLIDATED VARIABLE INTEREST ENTITIES

We become involved with unconsolidated VIEs primarily through assisting in the formation and financing of the entity. We do not consolidate these entities because we do not have power over decisions that significantly affect their economic performance. Our investments in unconsolidated VIEs, at June 30, 2017 and December 31, 2016 were $6,210 million and $6,346 million, respectively. Substantially all of these investments are held by Energy Financial Services. Obligations to make additional investments in these entities are not significant.