XML 74 R46.htm IDEA: XBRL DOCUMENT v3.8.0.1
FINANCIAL INSTRUMENTS (Tables)
 3 Months Ended
Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Estimated Fair Value of Assets and Liabilities
The following table provides information about assets and liabilities not carried at fair value. The table excludes finance leases, equity investments without readily determinable fair value 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.

March 31, 2018
 
December 31, 2017
(In millions)
Carrying
amount
(net)

Estimated
fair value

 
Carrying
amount
(net)

Estimated
fair value




 


GE


 


Assets


 


Notes receivable
$
798

$
798

 
$
700

$
700

Liabilities


 


Borrowings(a)(b)
33,948

33,750

 
34,473

35,416

Borrowings (debt assumed)(a)(c)
43,459

47,600

 
47,114

53,502




 


GE Capital


 


Assets


 


Loans
15,734

15,673

 
17,363

17,331

Other commercial mortgages
1,497

1,553

 
1,489

1,566

Loans held for sale
3,145

3,145

 
3,274

3,274

Liabilities


 


Borrowings(a)(d)(e)(f)
50,381

52,974

 
55,353

60,415

Investment contracts
2,521

2,851

 
2,569

2,996

(a)
See Note 11.
(b)
Included $286 million and $217 million of accrued interest in estimated fair value at March 31, 2018 and December 31, 2017, respectively.
(c)
Included $522 million and $696 million of accrued interest in estimated fair value at March 31, 2018 and December 31, 2017, respectively.
(d)
Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at March 31, 2018 and December 31, 2017 would have been reduced by $1,565 million and $1,754 million, respectively.
(e)
Included $587 million and $731 million of accrued interest in estimated fair value at March 31, 2018 and December 31, 2017, respectively.
(f)
Excluded $35,903 million and $39,844 million of net intercompany payable to GE at March 31, 2018 and December 31, 2017, respectively.
Loan Commitments
NOTIONAL AMOUNTS OF LOAN COMMITMENTS
 
 
 
 
 
(In millions)
March 31, 2018

December 31, 2017

 
 
 
Ordinary course of business lending commitments(a)
$
1,076

$
1,105

Unused revolving credit lines
158

198

(a)
Excluded investment commitments of $653 million and $677 million at March 31, 2018 and December 31, 2017, respectively.
Fair Value of Derivative Assets
FAIR VALUE OF DERIVATIVES
 
 
 
 
 
 
 
 
March 31, 2018
 
December 31, 2017
(In millions)
Assets

Liabilities

 
Assets

Liabilities

 
 
 
 
 
 
Derivatives accounted for as hedges
 
 
 
 
 
Interest rate contracts
$
1,619

$
208

 
$
1,862

$
148

Currency exchange contracts
329

71

 
160

70

 
1,948

279

 
2,021

218

 
 
 
 
 
 
Derivatives not accounted for as hedges
 
 
 
 
 
Interest rate contracts
39

10

 
93

8

Currency exchange contracts
1,264

1,658

 
1,111

2,043

Other contracts
89

127

 
139

91

 
1,392

1,795

 
1,343

2,143

 
 
 
 
 
 
Gross derivatives recognized in statement of financial position
 
 
 
 
 
Gross derivatives
3,340

2,074

 
3,364

2,361

Gross accrued interest
231

(26
)
 
469

(38
)
 
3,571

2,048

 
3,833

2,323

 
 
 
 
 
 
Amounts offset in statement of financial position
 
 
 
 
 
Netting adjustments(a)
(1,534
)
(1,536
)
 
(1,457
)
(1,456
)
Cash collateral(b)
(1,329
)
(155
)
 
(1,529
)
(578
)
 
(2,863
)
(1,691
)
 
(2,986
)
(2,034
)
 
 
 
 
 
 
Net derivatives recognized in statement of financial position
 
 
 
 
 
Net derivatives
708

357

 
847

289

 
 
 
 
 
 
Amounts not offset in statement of financial position
 
 
 
 
 
Securities held as collateral(c)
(350
)
—

 
(405
)
—

 
 
 
 
 
 
Net amount
$
358

$
357

 
$
441

$
289



Derivatives are classified in the captions "All other assets" and "All other liabilities" and the related accrued interest is classified in "Other GE Capital receivables" and "All other liabilities" in our Statement of Financial Position.

(a)
The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At March 31, 2018 and December 31, 2017, the cumulative adjustment for non-performance risk was $1 million and $(1) million, respectively.
(b)
Excluded excess cash collateral received and posted of $103 million and $432 million at March 31, 2018, respectively, and $10 million and $255 million at March 31, 2018 and December 31, 2017, respectively.
(c)
Excluded excess securities collateral received of $34 million and $16 million at March 31, 2018 and December 31, 2017, respectively.
Fair Value of Derivative Liabilities
FAIR VALUE OF DERIVATIVES
 
 
 
 
 
 
 
 
March 31, 2018
 
December 31, 2017
(In millions)
Assets

Liabilities

 
Assets

Liabilities

 
 
 
 
 
 
Derivatives accounted for as hedges
 
 
 
 
 
Interest rate contracts
$
1,619

$
208

 
$
1,862

$
148

Currency exchange contracts
329

71

 
160

70

 
1,948

279

 
2,021

218

 
 
 
 
 
 
Derivatives not accounted for as hedges
 
 
 
 
 
Interest rate contracts
39

10

 
93

8

Currency exchange contracts
1,264

1,658

 
1,111

2,043

Other contracts
89

127

 
139

91

 
1,392

1,795

 
1,343

2,143

 
 
 
 
 
 
Gross derivatives recognized in statement of financial position
 
 
 
 
 
Gross derivatives
3,340

2,074

 
3,364

2,361

Gross accrued interest
231

(26
)
 
469

(38
)
 
3,571

2,048

 
3,833

2,323

 
 
 
 
 
 
Amounts offset in statement of financial position
 
 
 
 
 
Netting adjustments(a)
(1,534
)
(1,536
)
 
(1,457
)
(1,456
)
Cash collateral(b)
(1,329
)
(155
)
 
(1,529
)
(578
)
 
(2,863
)
(1,691
)
 
(2,986
)
(2,034
)
 
 
 
 
 
 
Net derivatives recognized in statement of financial position
 
 
 
 
 
Net derivatives
708

357

 
847

289

 
 
 
 
 
 
Amounts not offset in statement of financial position
 
 
 
 
 
Securities held as collateral(c)
(350
)
—

 
(405
)
—

 
 
 
 
 
 
Net amount
$
358

$
357

 
$
441

$
289



Derivatives are classified in the captions "All other assets" and "All other liabilities" and the related accrued interest is classified in "Other GE Capital receivables" and "All other liabilities" in our Statement of Financial Position.

(a)
The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At March 31, 2018 and December 31, 2017, the cumulative adjustment for non-performance risk was $1 million and $(1) million, respectively.
(b)
Excluded excess cash collateral received and posted of $103 million and $432 million at March 31, 2018, respectively, and $10 million and $255 million at March 31, 2018 and December 31, 2017, respectively.
(c)
Excluded excess securities collateral received of $34 million and $16 million at March 31, 2018 and December 31, 2017, respectively.
Effects of Derivatives on Earnings
 
Three months ended March 31
(In millions)
Effect on hedging instrument
Effect on underlying
Effect on earnings (a)
 
 
 
 
2018
 
 
 
Cash flow hedges
$
142

$
(142
)
$
—

Fair value hedges
(697
)
672

(26
)
Net investment hedges(b)
(603
)
605

2

Economic hedges(c)
464

(574
)
(110
)
Total


$
(134
)
 
 
 
 
2017
 
 
 
Cash flow hedges
$
22

$
(22
)
$
—

Fair value hedges
(225
)
163

(62
)
Net investment hedges(b)
(563
)
573

10

Economic hedges(c)
(339
)
224

(115
)
Total


$
(167
)


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

(a)
For cash flow and fair value hedges, the effect on earnings is primarily related to ineffectiveness. For net investment hedges, the effect on earnings is related to ineffectiveness and spot-forward differences.
(b)
Both non-derivatives and derivatives hedging instruments are included. The carrying value of non-derivative instruments designated as net investment hedges was $(13,627) million and $(3,328) million at March 31, 2018 and 2017, respectively. Total pre-tax reclassifications from CTA to gain (loss) was zero and $60 million at March 31, 2018 and 2017, respectively. Total pre-tax reclassifications from CTA to gain (loss) included zero and $60 million recorded in discontinued operations at March 31, 2018 and 2017, respectively.
(c)
Net effect is substantially offset by the change in fair value of the hedged item that will affect earnings in future periods.
Cash Flow Hedge Activity
The table below summarizes this activity by hedging instrument.

CASH FLOW HEDGE ACTIVITY


 



 

Gain (loss) recognized in AOCI

Gain (loss) reclassified
from AOCI into earnings

for the three months ended March 31

for the three months ended March 31
(In millions)
2018

2017

2016


2018

2017

2016




 




 
Interest rate contracts
$
(4
)
$
(2
)
19


$
(2
)
$
(9
)
(30
)
Currency exchange contracts
146

22

(77
)

66

8

(53
)
Commodity contracts
—

2

1


—

—

(2
)
Total(a)
$
142

$
22

(57
)

$
65

$
(1
)
$
(84
)
(a)
Gain (loss) is recorded in "GE Capital revenues from services", "Interest and other financial charges", and "Other costs and expenses" in our Statement of Earnings when reclassified.