XML 158 R47.htm IDEA: XBRL DOCUMENT v3.8.0.1
FINANCIAL INSTRUMENTS AND NON-RECURRING FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Information About Assets and Liabilities Not Carried at Fair Value
The following table provides information about assets and liabilities not carried at fair value. The table excludes finance leases and non-financial assets and liabilities. Substantially all of the assets discussed below are considered to be Level 3. The vast majority of our liabilities’ fair value can be determined based on significant observable inputs and thus considered Level 2. Few of the instruments are actively traded and their fair values must often be determined using financial models. Realization of the fair value of these instruments depends upon market forces beyond our control, including marketplace liquidity.

September 30, 2017
 
December 31, 2016
(In millions)
Carrying
amount
(net)

Estimated
fair value

 
Carrying
amount
(net)

Estimated
fair value




 


GE


 


Assets


 


Investments and notes receivable
$
1,337

$
1,404

 
$
1,526

$
1,595

Liabilities


 


Borrowings(a)(b)
33,982

35,180

 
19,184

19,923

Borrowings (debt assumed)(a)(c)
49,864

56,894

 
60,109

66,998




 


GE Capital


 


Assets


 


Loans
19,994

20,069

 
21,060

20,830

Other commercial mortgages
1,490

1,576

 
1,410

1,472

Loans held for sale
1,063

1,063

 
473

473

Other financial instruments(d)
115

161

 
121

150

Liabilities


 


Borrowings(a)(e)(f)(g)
54,945

59,327

 
58,523

62,024

Investment contracts
2,606

3,057

 
2,813

3,277

(a)
See Note 10.
(b)
Included $230 million and $115 million of accrued interest in estimated fair value at September 30, 2017 and December 31, 2016, respectively.
(c)
Included $575 million and $803 million of accrued interest in estimated fair value at September 30, 2017 and December 31, 2016, respectively.
(d)
Principally comprises cost method investments.
(e)
Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at September 30, 2017 and December 31, 2016 would have been reduced by $2,604 million and $2,397 million, respectively.
(f)
Included $764 million and $775 million of accrued interest in estimated fair value at September 30, 2017 and December 31, 2016, respectively.
(g)
Excluded $42,593 million and $58,780 million of net intercompany payable to GE at September 30, 2017 and December 31, 2016, respectively.
Schedule of Notional Amounts of Loan Commitments
NOTIONAL AMOUNTS OF LOAN COMMITMENTS
 
 
 
 
 
(In millions)
September 30, 2017

December 31, 2016

 
 
 
Ordinary course of business lending commitments(a)
$
1,729

$
687

Unused revolving credit lines
232

238

(a)
Excluded investment commitments of $451 million and $522 million at September 30, 2017 and December 31, 2016, respectively.
Schedule of Non-Recurring Fair Value Amounts and Fair Value Adjustments
The following table represents non-recurring fair value amounts (as measured at the time of the adjustment) for those assets remeasured to fair value on a non-recurring basis during the fiscal year and still held at September 30, 2017 and December 31, 2016.

 
Remeasured during
the nine months ended
September 30, 2017
Remeasured during
the year ended
December 31, 2016
(In millions)
Level 2
Level 3
Level 2
Level 3
 
 
 
 
 
Financing receivables
$
—

$
10

$
—

$
30

Cost and equity method investments
—

60

—

103

Long-lived assets
277

743

17

1,055

Goodwill
$
—

$
191

$
—

$
—

Total
$
277

$
1,004

$
17

$
1,189



The following table represents the fair value adjustments to assets measured at fair value on a non-recurring basis and still held at September 30, 2017 and 2016.
 
Three months ended September 30
Nine months ended September 30
(In millions)
2017

2016

 
2017

2016

 
 
 
 
 
 
Financing receivables
$
(1
)
$
—

 
$
(1
)
$
(14
)
Cost and equity method investments
(58
)
(2
)
 
(89
)
(95
)
Long-lived assets
(671
)
(21
)
 
(712
)
(161
)
Goodwill
$
(947
)
$
—

 
$
(947
)
$
—

Total
$
(1,676
)
$
(24
)
 
$
(1,748
)
$
(270
)
Schedule of Level 3 Measurements - Significant Unobservable Inputs
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS
 
(Dollars in millions)
Fair value
Valuation technique
Unobservable inputs
Range
(weighted-average)
 
 
 
 
 
September 30, 2017
 
 
 
 
 
 
 
 
 
Non-recurring fair value measurements
 
 
 
 
Cost and equity method investments
$
51

Income approach
Discount rate(a)
 9.0%-40.0%(13.9)%
 
 
 
 
 
Long-lived assets
508

Income approach
Discount rate(a)
 2.7%-17.0% (7.2%)
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
Non-recurring fair value measurements
 
 
 
 
Financing receivables
$
30

Income approach
Discount rate(a)
2.5%-30.0% (20.3%)
 
 
 
 
 
Cost and equity method investments
94

Income approach,
Discount rate(a)
9.0%-30.0% (11.8%)
 
 
 
 
 
Long-lived assets
683

Income approach
Discount rate(a)
2.5%-20.0% (10.4%)
Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value.
Schedule of Financial Statement Effects - Cash Flow Hedges
FINANCIAL STATEMENT EFFECTS - CASH FLOW HEDGES
 
Three months ended September 30
 
Nine months ended September 30
(In millions)
2017

2016

 
2017

2016

 
 
 
 
 
 
Balance sheet changes
 
 
 
 
 
Fair value of derivatives increase (decrease)
$
225

$
2

 
$
281

$
(43
)
Shareowners' equity (increase) decrease
(225
)
(2
)
 
(281
)
43

 
 
 
 
 
 
Earnings (loss) related to ineffectiveness
—

—

 
—

—

Earnings (loss) effect of derivatives(a)
104

(57
)
 
167

(128
)
(a)
Offsets earnings effect of the hedged forecasted transaction
Schedule of Financial Statement Effects - Fair Value Hedges
FINANCIAL STATEMENT EFFECTS - FAIR VALUE HEDGES
 
 
 
 
 
 
 
 
 
 
Three months ended September 30
Nine months ended September 30
(In millions)
2017

2016

2017

2016

 
 
 
 
 
Balance sheet changes
 
 
 
 
Fair value of derivative increase (decrease)
$
(148
)
$
(116
)
$
(430
)
$
2,494

Adjustment to carrying amount of hedged debt (increase) decrease
103

37

267

(2,651
)
 
 
 
 
 
Earnings (loss) related to hedge ineffectiveness
(45
)
(79
)
(162
)
(156
)
Schedule of Financial Statement Effects - Net Investment Hedges
FINANCIAL STATEMENT EFFECTS - NET INVESTMENT HEDGES
 
Three months ended September 30
Nine months ended September 30
(In millions)
2017

2016

2017

2016

 
 
 
 
 
Balance sheet changes
 
 
 
 
Fair value of derivatives increase (decrease)
$
(111
)
$
107

$
(302
)
$
154

Fair value of non-derivative instruments (increase) decrease
(905
)
475

(1,764
)
425

Shareowners' equity (increase) decrease
1,020

(552
)
2,082

(513
)
 
 
 
 
 
Earnings (loss) related to
 
 
 
 
spot-forward differences and ineffectiveness
4

30

17

67

Earnings (loss) related to
 
 
 
 
reclassification upon sale or liquidation(a)
18

47

78

(1,025
)
(a)
Included zero and $47 million recorded in discontinued operations in the three months ended September 30, 2017 and 2016 and $59 million and $(1,026) million recorded in discontinued operations in the nine months ended September 30, 2017 and 2016, respectively.
Schedule of Financial Statement Effects - Economic Hedges
FINANCIAL STATEMENT EFFECTS - ECONOMIC HEDGES
 
 
 
 
 
Three months ended September 30
Nine months ended September 30
(In millions)
2017

2016

2017

2016

 
 
 
 
 
Balance sheet changes
 
 
 
 
Change in fair value of economic hedge increase (decrease)
$
663

$
(686
)
$
1,304

$
(808
)
Change in carrying amount of item being hedged increase (decrease)
(920
)
380

(1,876
)
182

 
 
 
 
 
Earnings (loss) effect of economic hedges(a)
(257
)
(306
)
(572
)
(626
)
(a)
Offset by the future earnings effects of economically hedged item.
Schedule of Carrying Amounts Related to Derivatives
The table below provides additional information about how derivatives are reflected in our financial statements.
CARRYING AMOUNTS RELATED TO DERIVATIVES
 
 
(In millions)
September 30, 2017
December 31, 2016
 
 
 
Derivative assets
$
4,601

$
5,467

Derivative liabilities
(2,453
)
(4,883)
Accrued interest
490

792
Cash collateral & credit valuation adjustment
(1,816
)
(672)
Net Derivatives
822

703
Securities held as collateral
(437
)
(442)
Net amount
$
385

$
262
Schedule of Effects of Derivatives on Earnings
 
Three months ended September 30
Nine months ended September 30
(In millions)
Effect on
hedging instrument
Effect on
underlying
Effect on
earnings
Effect on
hedging instrument
Effect on
underlying
Effect on
earnings
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
Cash flow hedges
$
225

$
(225
)
$
—

$
281

$
(281
)
$
—

Fair value hedges
(148
)
103

(45
)
(430
)
267

(162
)
Net investment hedges(a)
(1,016
)
1,020

4

(2,065
)
2,082

17

Economic hedges(b)
663

(920
)
(257
)
1,304

(1,876
)
(572
)
Total


$
(298
)


$
(717
)
 
 
 
 
 
 
 
2016
 
 
 
 
 
 
Cash flow hedges
$
2

$
(2
)
$
—

$
(43
)
$
43

$
—

Fair value hedges
(116
)
37

(79
)
2,494

(2,651
)
(156
)
Net investment hedges(a)
582

(552
)
30

580

(513
)
67

Economic hedges(b)
(686
)
380

(306
)
(808
)
182

(626
)
Total


$
(355
)


$
(715
)


The amounts in the table above generally do not include associated derivative accruals in income or expense.

(a)
Both derivatives and non-derivatives hedging instruments are included.
(b)
Net effect is substantially offset by the change in fair value of the hedged item that will affect earnings in future periods.