Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

									Netting
(In millions)	Level 1		(a)	Level 2		(a)	Level 3		adjustment		(b)	Net balance

December 31, 2013
Assets
Investment securities
Debt
U.S. corporate	$	-		$	18,788		$	2,953	$	-		$	21,741
State and municipal		-			4,193			96		-			4,289
Residential mortgage-backed		-			1,824			86		-			1,910
Commercial mortgage-backed		-			3,025			10		-			3,035
Asset-backed(c)		-			489			6,898		-			7,387
Corporate – non-U.S.		61			645			1,064		-			1,770
Government – non-U.S.		1,590			789			31		-			2,410
U.S. government and federal
agency		-			545			225		-			770
Retained interests		-			-			72		-			72
Equity
Available-for-sale		475			31			11		-			517
Trading		78			2			-		-			80
Derivatives(d)		-			8,304			175		(6,739)			1,740
Other(e)		-			-			494		-			494
Total	$	2,204		$	38,635		$	12,115	$	(6,739)		$	46,215

Liabilities
Derivatives	$	-		$	5,409		$	20	$	(4,355)		$	1,074
Other(f)		-			1,170			-		-			1,170
Total	$	-		$	6,579		$	20	$	(4,355)		$	2,244

December 31, 2012
Assets
Investment securities
Debt
U.S. corporate	$	-		$	20,580		$	3,591	$	-		$	24,171
State and municipal		-			4,469			77		-			4,546
Residential mortgage-backed		-			2,162			100		-			2,262
Commercial mortgage-backed		-			3,088			6		-			3,094
Asset-backed(c)		-			715			5,023		-			5,738
Corporate – non-U.S.		71			1,132			1,218		-			2,421
Government – non-U.S.		702			1,019			42		-			1,763
U.S. government and federal
agency		-			3,288			277		-			3,565
Retained interests		-			-			83		-			83
Equity
Available-for-sale		590			16			13		-			619
Trading		248			-			-		-			248
Derivatives(d)		-			11,432			434		(7,926)			3,940
Other(e)		35			-			799		-			834
Total	$	1,646		$	47,901		$	11,663	$	(7,926)		$	53,284

Liabilities
Derivatives	$	-		$	3,434		$	20	$	(3,177)		$	277
Other(f)		-			908			-		-			908
Total	$	-		$	4,342		$	20	$	(3,177)		$	1,185

(a) The fair value of securities transferred between Level 1 and Level 2 was $2 million during 2013.

(b) The netting of derivative receivables and payables (including the effects of any collateral posted or received) is permitted when a legally enforceable master netting agreement exists.

(c) Includes investments in our CLL business in asset-backed securities collateralized by senior secured loans of high-quality, middle-market companies in a variety of industries.

(d) The fair value of derivatives included an adjustment for non-performance risk. The cumulative adjustment was a gain (loss) of $(7) million and $(15) million at December 31, 2013 and 2012, respectively. See Note 22 for additional information on the composition of our derivative portfolio.

(e) Included private equity investments and loans designated under the fair value option.

(f) Primarily represented the liability associated with certain of our deferred incentive compensation plans.

Changes in level 3 instruments

Changes in Level 3 Instruments for the Year Ended December 31, 2013
																						Net
(In millions)																						change in
						Net realized/																unrealized
			Net			unrealized																gains
			realized/			gains (losses)																(losses)
			unrealized			included in																relating to
	Balance		gains			accumulated														Balance		instruments
	at		(losses)			other								Transfers			Transfers			at		still held at
	January 1,		included			comprehensive								into			out of			December 31,		December 31,
	2013		in earnings		(a)	income		Purchases		Sales		Settlements		Level 3		(b)	Level 3		(b)	2013		2013		(c)

Investment securities
Debt
U.S. corporate	$	3,591	$	(497)		$	135	$	380	$	(424)	$	(231)	$	108		$	(109)		$	2,953	$	-
State and municipal		77		-			(7)		21		-		(5)		10			-			96		-
Residential
mortgage-backed		100		-			(5)		-		(2)		(7)		-			-			86		-
Commercial
mortgage-backed		6		-			-		-		-		(6)		10			-			10		-
Asset-backed		5,023		5			32		2,632		(4)		(795)		12			(7)			6,898		-
Corporate – non-U.S.		1,218		(103)			49		5,814		(3)		(5,874)		21			(58)			1,064		-
Government
– non-U.S.		42		1			(12)		-		-		-		-			-			31		-
U.S. government and
federal agency		277		-			(52)		-		-		-		-			-			225		-
Retained interests		83		3			1		6		-		(21)		-			-			72		-
Equity
Available-for-sale		13		-			-		-		-		-		-			(2)			11		-
Trading		-		-			-		-		-		-		-			-			-		-
Derivatives(d)(e)		416		(66)			2		(2)		-		(226)		37			3			164		(30)
Other		799		(68)			12		538		(779)		-		4			(12)			494		(102)
Total	$	11,645	$	(725)		$	155	$	9,389	$	(1,212)	$	(7,165)	$	202		$	(185)		$	12,104	$	(132)

(a) Earnings effects are primarily included in the “GECC revenues from services” and “Interest and other financial charges” captions in the Statement of 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.

(d) Represented derivative assets net of derivative liabilities and included cash accruals of $9 million not reflected in the fair value hierarchy table.

(e) Gains (losses) included in net realized/unrealized gains (losses) included in earnings were offset by the earnings effects from the underlying items that were economically hedged. See Note 22.

Changes in Level 3 Instruments for the Year Ended December 31, 2012
																						Net
(In millions)																						change in
						Net realized/																unrealized
			Net			unrealized																gains
			realized/			gains (losses)																(losses)
			unrealized			included in																relating to
	Balance		gains			accumulated														Balance		instruments
	at		(losses)			other								Transfers			Transfers			at		still held at
	January 1,		included			comprehensive								into			out of			December 31,		December 31,
	2012		in earnings		(a)	income		Purchases		Sales		Settlements		Level 3		(b)	Level 3		(b)	2012		2012		(c)

Investment securities
Debt
U.S. corporate	$	3,235	$	66		$	32	$	483	$	(214)	$	(110)	$	299		$	(200)		$	3,591	$	-
State and municipal		77		-			10		16		-		(1)		78			(103)			77		-
Residential
mortgage-backed		41		(3)			1		6		-		(3)		135			(77)			100		-
Commercial
mortgage-backed		4		-			(1)		-		-		-		6			(3)			6		-
Asset-backed		4,040		1			(25)		1,490		(502)		-		25			(6)			5,023		-
Corporate – non-U.S.		1,204		(11)			19		341		(51)		(172)		24			(136)			1,218		-
Government
– non-U.S.		84		(33)			38		65		(72)		(40)		-			-			42		-
U.S. government and
federal agency		253		-			24		-		-		-		-			-			277		-
Retained interests		35		(1)			(3)		16		(6)		(12)		54			-			83		-
Equity
Available-for-sale		17		-			(1)		3		(3)		(1)		2			(4)			13		-
Trading		-		-			-		-		-		-		-			-			-		-
Derivatives(d)(e)		369		29			(1)		(1)		-		(112)		190			(58)			416		160
Other		817		50			2		159		(137)		-		-			(92)			799		43
Total	$	10,176	$	98		$	95	$	2,578	$	(985)	$	(451)	$	813		$	(679)		$	11,645	$	203

(a) Earnings effects are primarily included in the “GECC revenues from services” and “Interest and other financial charges” captions in the Statement of Earnings.

(d) Represented derivative assets net of derivative liabilities and included cash accruals of $2 million not reflected in the fair value hierarchy table.

(e) Gains (losses) included in net realized/unrealized gains (losses) included in earnings were offset by the earnings effects from the underlying items that were economically hedged. See Note 22.

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

	Remeasured during the year ended December 31
	2013				2012
(In millions)	Level 2		Level 3		Level 2		Level 3

Financing receivables and loans held for sale	$	210	$	2,986	$	366	$	4,094
Cost and equity method investments(a)		-		690		8		313
Long-lived assets, including real estate		2,050		1,088		702		2,182
Total	$	2,260	$	4,764	$	1,076	$	6,589

(a) Includes the fair value of private equity and real estate funds included in Level 3 of $126 million and $84 million at December 31, 2013 and 2012, respectively.

Fair value adjustments to assets measured on a non-recurring basis

	Year ended December 31
(In millions)		2013		2012

Financing receivables and loans held for sale	$	(361)	$	(595)
Cost and equity method investments(a)		(484)		(153)
Long-lived assets, including real estate(b)		(1,188)		(624)
Total	$	(2,033)	$	(1,372)

(a) Includes fair value adjustments associated with private equity and real estate funds of $(14) million and $(33) million during 2013 and 2012, respectively.

(b) Includes impairments related to real estate equity properties and investments recorded in other costs and expenses of $108 million and $218 million during 2013 and 2012, respectively.

Level 3 Measurements

			Valuation	Unobservable	Range (weighted
(Dollars in millions)	Fair value		technique	inputs	average)

December 31, 2013

Recurring fair value measurements

Investment securities
Debt

U.S. corporate	$	898	Income approach	Discount rate(a)	1.5%-13.3% (6.5%)

Asset-backed		6,854	Income approach	Discount rate(a)	1.2%-10.5% (3.7%)

Corporate – non-U.S.		819	Income approach	Discount rate(a)	1.4%-46.0% (15.1%)

Other financial assets		381	Income approach, Market comparables	Weighted average cost of capital	9.3%-9.3% (9.3%)

				EBITDA multiple	5.4X-12.5X (9.5X)

				Discount rate(a)	5.2%-8.8% (5.3%)

				Capitalization rate(b)	6.3%-7.5% (7.2%)

Non-recurring fair value measurements

Financing receivables and loans held for sale	$	1,937	Income approach, Business enterprise value	Capitalization rate(b)	5.5%-16.7% (8.0%)

				EBITDA multiple	4.3X-5.5X (4.8X)

				Discount rate(a)	6.6%-6.6% (6.6%)

Cost and equity method investments		102	Income approach, Market comparables	Discount rate(a)	5.7%-5.9% (5.8%)

				Capitalization rate(b)	8.5%-10.6% (10.0%)

				Weighted average cost of capital	9.3%-9.6% (9.4%)

				EBITDA multiple	7.1X-14.5X (11.3X)

				Revenue multiple	2.2X-12.6X (9.4X)

Long-lived assets, including real estate		694	Income approach	Capitalization rate(b)	5.4%-14.5% (7.8%)

				Discount rate(a)	4.0%-23.0% (9.0%)

December 31, 2012

Recurring fair value measurements

Investment securities
Debt
U.S. corporate	$	1,652	Income approach	Discount rate(a)	1.3%-29.9% (11.1%)

Asset-backed		4,977	Income approach	Discount rate(a)	2.1%-13.1% (3.8%)

Corporate – non-U.S.		865	Income approach	Discount rate(a)	1.5%-25.0% (13.2%)

Other financial assets		633	Income approach, Market comparables	Weighted average cost of capital	8.7%-10.2% (8.7%)

				EBITDA multiple	4.9X-10.6X (7.9X)

Non-recurring fair value measurements

Financing receivables and loans held for sale	$	2,835	Income approach, Business enterprise value	Capitalization rate(b)	3.8%-14.0% (8.0%)

				EBITDA multiple	2.0X-6.0X (4.8X)

Cost and equity method investments		72	Income approach	Capitalization rate(b)	9.2%-12.8% (12.0%)

Long-lived assets, including real estate		985	Income approach	Capitalization rate(b)	4.8%-14.6% (7.3%)

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.
Represents the rate of return on net operating income that is considered acceptable for an investor and is used to determine a property's capitalized value. An increase in the capitalization rate would result in a decrease in the fair value.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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