NOTE 4. FINANCING RECEIVABLES, ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES AND SUPPLEMENTAL INFORMATION ON CREDIT QUALITY

December 31 (In millions)	2013		2012

Loans, net of deferred income(a)	$	231,268	$	240,634
Investment in financing leases, net of deferred income		26,939		32,471
		258,207		273,105
Less allowance for losses		(5,178)		(4,944)
Financing receivables – net(b)	$	253,029	$	268,161

(a) Deferred income was $2,013 million and $2,184 million at December 31, 2013 and 2012, respectively.

(b) Financing receivables at December 31, 2013 and 2012 included $544 million and $750 million, respectively, relating to loans that had been acquired in a transfer but have been subject to credit deterioration since origination.

GECC financing receivables include both loans and financing leases. Loans represent transactions in a variety of forms, including revolving charge and credit, mortgages, installment loans, intermediate-term loans and revolving loans secured by business assets. The portfolio includes loans carried at the principal amount on which finance charges are billed periodically, and loans carried at gross book value, which includes finance charges.

Investment in financing leases consists of direct financing and leveraged leases of aircraft, railroad rolling stock, autos, other transportation equipment, data processing equipment, medical equipment, commercial real estate and other manufacturing, power generation, and commercial equipment and facilities.

For federal income tax purposes, the leveraged leases and the majority of the direct financing leases are leases in which GECC depreciates the leased assets and is taxed upon the accrual of rental income. Certain direct financing leases are loans for federal income tax purposes. For these transactions, GECC is taxed only on the portion of each payment that constitutes interest, unless the interest is tax-exempt (e.g., certain obligations of state governments).

Investment in direct financing and leveraged leases represents net unpaid rentals and estimated unguaranteed residual values of leased equipment, less related deferred income. GECC has no general obligation for principal and interest on notes and other instruments representing third-party participation related to leveraged leases; such notes and other instruments have not been included in liabilities but have been offset against the related rentals receivable. The GECC share of rentals receivable on leveraged leases is subordinate to the share of other participants who also have security interests in the leased equipment. For federal income tax purposes, GECC is entitled to deduct the interest expense accruing on non-recourse financing related to leveraged leases.

	Total financing leases				Direct financing leases(a)				Leveraged leases(b)
December 31 (In millions)	2013		2012		2013		2012		2013		2012

Total minimum lease payments receivable	$	29,970	$	36,451	$	24,571	$	29,416	$	5,399	$	7,035
Less principal and interest on third-party
non-recourse debt		(3,480)		(4,662)		-		-		(3,480)		(4,662)
Net rentals receivables		26,490		31,789		24,571		29,416		1,919		2,373
Estimated unguaranteed residual value of
leased assets		5,073		6,346		3,067		4,272		2,006		2,074
Less deferred income		(4,624)		(5,664)		(3,560)		(4,453)		(1,064)		(1,211)
Investment in financing leases, net of
deferred income		26,939		32,471		24,078		29,235		2,861		3,236
Less amounts to arrive at net investment
Allowance for losses		(202)		(198)		(192)		(193)		(10)		(5)
Deferred taxes		(4,075)		(4,506)		(1,783)		(2,245)		(2,292)		(2,261)
Net investment in financing leases	$	22,662	$	27,767	$	22,103	$	26,797	$	559	$	970

(a) Included $317 million and $330 million of initial direct costs on direct financing leases at December 31, 2013 and 2012, respectively.

(b) Included pre-tax income of $31 million and $81 million and income tax of $11 million and $32 million during 2013 and 2012, respectively. Net investment credits recognized on leveraged leases during 2013 and 2012 were insignificant.

	Total		Net rentals
(In millions)	loans		receivable

Due in
2014	$	54,971	$	8,184
2015		19,270		6,114
2016		19,619		4,209
2017		17,281		2,733
2018		14,714		1,798
2019 and later		43,121		3,452
		168,976		26,490
Consumer revolving loans		62,292		-
Total	$	231,268	$	26,490

The following tables provide additional information about our financing receivables and related activity in the allowance for losses for our Commercial, Real Estate and Consumer portfolios.


December 31 (In millions)	2013		2012

Commercial
CLL
Americas	$	68,585	$	72,517
Europe (a)		37,962		37,037
Asia		9,469		11,401
Other (a)		451		603
Total CLL		116,467		121,558

Energy Financial Services		3,107		4,851

GECAS		9,377		10,915

Other		318		486
Total Commercial		129,269		137,810

Real Estate		19,899		20,946

Consumer
Non-U.S. residential mortgages		30,501		33,350
Non-U.S. installment and revolving credit		13,677		17,816
U.S. installment and revolving credit		55,854		50,853
Non-U.S. auto		2,054		4,260
Other		6,953		8,070
Total Consumer		109,039		114,349

Total financing receivables		258,207		273,105

Less allowance for losses		(5,178)		(4,944)
Total financing receivables – net	$	253,029	$	268,161

(a) During 2013, we transferred our European equipment services portfolio from CLL Other to CLL Europe. Prior-period amounts were reclassified to conform to the current period presentation.

	Balance at		Provision											Balance at
	January 1,		charged to					Gross						December 31,
(In millions)	2013		operations		Other		(a)	write-offs		(b)	Recoveries		(b)	2013

Commercial
CLL
Americas	$	490	$	292	$	(1)		$	(422)		$	114		$	473
Europe		445		321		12			(441)			78			415
Asia		80		124		(11)			(115)			12			90
Other		6		(3)		–			(3)			–			–
Total CLL		1,021		734		–			(981)			204			978


Energy Financial Services		9		(1)		–			–			–			8

GECAS		8		9		–			–			–			17

Other		3		(1)		–			(2)			2			2
Total Commercial		1,041		741		–			(983)			206			1,005

Real Estate		320		28		(4)			(163)			11			192

Consumer
Non-U.S. residential mortgages		480		269		10			(458)			57			358
Non-U.S. installment and revolving credit		582		589		(93)			(967)			483			594
U.S. installment and revolving credit		2,282		3,006		(51)			(2,954)			540			2,823
Non-U.S. auto		67		58		(13)			(126)			70			56
Other		172		127		11			(236)			76			150
Total Consumer		3,583		4,049		(136)			(4,741)			1,226			3,981
Total	$	4,944	$	4,818	$	(140)		$	(5,887)		$	1,443		$	5,178

(b) Net write-offs (gross write-offs less recoveries) in certain portfolios may exceed the beginning allowance for losses as a result of losses that are incurred subsequent to the beginning of the fiscal year due to information becoming available during the current year, which may identify further deterioration on existing financing receivables.

	Balance at		Provision											Balance at
	January 1,		charged to					Gross						December 31,
(In millions)	2012		operations		Other		(a)	write-offs		(b)	Recoveries		(b)	2012

Commercial
CLL
Americas	$	889	$	109	$	(51)		$	(568)		$	111		$	490
Europe		400		374		(3)			(390)			64			445
Asia		157		37		(3)			(134)			23			80
Other		4		13		(1)			(10)			-			6
Total CLL		1,450		533		(58)			(1,102)			198			1,021

Energy Financial Services		26		4		-			(24)			3			9

GECAS		17		4		-			(13)			-			8

Other		37		1		(20)			(17)			2			3
Total Commercial		1,530		542		(78)			(1,156)			203			1,041

Real Estate		1,089		72		(44)			(810)			13			320

Consumer
Non-U.S. residential mortgages		545		112		8			(261)			76			480
Non-U.S. installment and revolving credit		690		290		24			(974)			552			582
U.S. installment and revolving credit		2,008		2,666		(24)			(2,906)			538			2,282
Non-U.S. auto		101		18		(4)			(146)			98			67
Other		199		132		18			(257)			80			172
Total Consumer		3,543		3,218		22			(4,544)			1,344			3,583
Total	$	6,162	$	3,832	$	(100)		$	(6,510)		$	1,560		$	4,944

	Balance at		Provision												Balance at
	January 1,		charged to						Gross						December 31,
(In millions)	2011		operations		(a)	Other		(b)	write-offs		(c)	Recoveries		(c)	2011

Commercial
CLL
Americas	$	1,288	$	281		$	(96)		$	(700)		$	116		$	889
Europe		429		195			(5)			(286)			67			400
Asia		222		105			13			(214)			31			157
Other		6		3			(3)			(2)			–			4
Total CLL		1,945		584			(91)			(1,202)			214			1,450


Energy Financial Services		22		–			(1)			(4)			9			26

GECAS		20		–			–			(3)			–			17

Other		58		23			–			(47)			3			37
Total Commercial		2,045		607			(92)			(1,256)			226			1,530

Real Estate		1,488		324			2			(747)			22			1,089

Consumer
Non-U.S. residential
mortgages		688		116			(13)			(295)			49			545
Non-U.S. installment
and revolving credit		898		470			(29)			(1,198)			549			690
U.S. installment and
revolving credit		2,333		2,241			1			(3,095)			528			2,008
Non-U.S. auto		168		30			(4)			(216)			123			101
Other		259		142			(20)			(272)			90			199
Total Consumer		4,346		2,999			(65)			(5,076)			1,339			3,543
Total	$	7,879	$	3,930		$	(155)		$	(7,079)		$	1,587		$	6,162

We provide further detailed information about the credit quality of our Commercial, Real Estate and Consumer financing receivables portfolios. For each portfolio, we describe the characteristics of the financing receivables and provide information about collateral, payment performance, credit quality indicators, and impairment. We manage these portfolios using delinquency and nonearning data as key performance indicators. The categories used within this section such as impaired loans, TDR and nonaccrual financing receivables are defined by the authoritative guidance and we base our categorization on the related scope and definitions contained in the related standards. The categories of nonearning and delinquent are defined by us and are used in our process for managing our financing receivables. Definitions of these categories are provided in Note 1.

The following tables display payment performance of Commercial, Real Estate, and Consumer financing receivables.

	2013				2012
	Over 30 days		Over 90 days		Over 30 days		Over 90 days
December 31	past due		past due(a)		past due		past due

Commercial
CLL
Americas	1.1	%	0.5	%	1.1	%	0.5	%
Europe	3.8		2.1		3.7		2.1
Asia	0.5		0.3		0.9		0.6
Other	-		-		0.1		-
Total CLL	1.9		1.0		1.9		1.0

Energy Financial Services	-		-		-		-

GECAS	-		-		-		-

Other	0.1		0.1		2.8		2.8
Total Commercial	1.7		0.9		1.7		0.9

Real Estate	1.2		1.1		2.3		2.2

Consumer
Non-U.S. residential mortgages(b)	11.2		6.9		12.0		7.5
Non-U.S. installment and revolving credit	3.7		1.1		3.8		1.1
U.S. installment and revolving credit	4.4		2.0		4.6		2.0
Non-U.S. auto	4.4		0.7		3.1		0.5
Other	2.5		1.4		2.8		1.7
Total Consumer	6.1		3.2		6.5		3.4

Total	3.5	%	1.9	%	3.7	%	2.1	%

(a) Included $1,197 million of Consumer loans at December 31, 2013, which are over 90 days past due and continue to accrue interest until the accounts are written off in the period that the account becomes 180 days past due.

(b) Consumer loans secured by residential real estate (both revolving and closed-end loans) are written down to the fair value of collateral, less costs to sell, no later than when they become 180 days past due.

	Nonaccrual financing						Nonearning financing
	receivables (a)						receivables (a)
December 31 (Dollars in millions)	2013			2012			2013			2012

Commercial

CLL
Americas	$	1,275		$	1,951		$	1,243		$	1,333
Europe		1,046			1,740			1,046			1,299
Asia		413			395			413			193
Other		-			52			-			52
Total CLL		2,734			4,138			2,702			2,877

Energy Financial Services		4			-			4			-

GECAS		-			3			-			-

Other		6			25			6			13
Total Commercial		2,744	(b)		4,166	(b)		2,712			2,890

Real Estate		2,551	(c)		4,885	(c)		2,301			444

Consumer
Non-U.S. residential mortgages		2,161			2,598			1,766			2,567
Non-U.S. installment and revolving credit		88			213			88			213
U.S. installment and revolving credit		2			1,026			2			1,026
Non-U.S. auto		18			24			18			24
Other		351			427			345			351
Total Consumer		2,620	(d)		4,288	(d)		2,219			4,181
Total	$	7,915		$	13,339		$	7,232		$	7,515


Allowance for losses percentage

Commercial		36.6	%		25.0	%		37.1	%		36.0	%
Real Estate		7.5			6.6			8.3			72.1
Consumer		151.9			83.6			179.4			85.7

Total		65.4	%		37.1	%		71.6	%		65.8	%

The following tables provide information about loans classified as impaired and specific reserves related to Commercial, Real Estate and Consumer.

	With no specific allowance						With a specific allowance
		Recorded	Unpaid		Average			Recorded	Unpaid				Average
	investment		principal		investment		investment		principal		Associated		investment
December 31 (In millions)	in loans		balance		in loans		in loans		balance		allowance		in loans

2013

Commercial
CLL
Americas	$	1,670	$	2,187	$	2,154	$	417	$	505	$	96	$	497
Europe		802		1,589		956		580		921		211		536
Asia		302		349		180		111		125		20		93
Other		-		-		-		-		-		-		12
Total CLL		2,774		4,125		3,290		1,108		1,551		327		1,138

Energy Financial Services		-		-		-		4		4		1		2

GECAS		-		-		-		-		-		-		1

Other		2		3		9		4		4		-		5
Total Commercial(a)		2,776		4,128		3,299		1,116		1,559		328		1,146

Real Estate(b)		2,615		3,036		3,058		1,245		1,507		74		1,688

Consumer(c)		109		153		98		2,879		2,948		567		3,058
Total	$	5,500	$	7,317	$	6,455	$	5,240	$	6,014	$	969	$	5,892

(a) We recognized $218 million and $253 million of interest income, including $60 million and $92 million on a cash basis, for the years ended December 31, 2013 and 2012, respectively, principally in our CLL Americas business. The total average investment in impaired loans for the years ended December 31, 2013 and 2012 was $4,445 million and $5,688 million, respectively.

(b) We recognized $187 million and $329 million of interest income, including $135 million and $237 million on a cash basis, for the years ended December 31, 2013 and 2012, respectively. The total average investment in impaired loans for the years ended December 31, 2013 and 2012 was $4,746 million and $7,525 million, respectively.

(c) We recognized $221 million and $168 million of interest income, including $3 million and $4 million on a cash basis, for the years ended December 31, 2013 and 2012, respectively, principally in our Consumer U.S. installment and revolving credit portfolios. The total average investment in impaired loans for the years ended December 31, 2013 and 2012 was $3,156 million and $3,049 million, respectively.



December 31 (In millions)	2013		2012

Commercial
Non-impaired financing receivables	$	125,377	$	132,741
General reserves		677		554

Impaired loans		3,892		5,069
Specific reserves		328		487

Real Estate
Non-impaired financing receivables	$	16,039	$	15,253
General reserves		118		132

Impaired loans		3,860		5,693
Specific reserves		74		188

Consumer
Non-impaired financing receivables	$	106,051	$	111,141
General reserves		3,414		2,910

Impaired loans		2,988		3,208
Specific reserves		567		673

Total
Non-impaired financing receivables	$	247,467	$	259,135
General reserves		4,209		3,596

Impaired loans		10,740		13,970
Specific reserves		969		1,348

Impaired loans classified as TDRs in our CLL business were $2,961 million and $3,872 million at December 31, 2013 and 2012, respectively, and were primarily attributable to CLL Americas ($1,770 million and $2,577 million, respectively). For the year ended December 31, 2013, we modified $1,509 million of loans classified as TDRs, primarily in CLL Americas ($737 million). Changes to these loans primarily included extensions, interest-only payment periods, debt to equity exchange and forbearance or other actions, which are in addition to, or sometimes in lieu of, fees and rate increases. Of our $1,509 million and $2,936 million of modifications classified as TDRs during 2013 and 2012, respectively, $71 million and $217 million have subsequently experienced a payment default in 2013 and 2012, respectively.

Real Estate TDRs decreased from $5,146 million at December 31, 2012 to $3,625 million at December 31, 2013, primarily driven by resolution of TDRs through paydowns, partially offset by extensions of loans scheduled to mature during 2013, some of which were classified as TDRs upon modification. We deem loan modifications to be TDRs when we have granted a concession to a borrower experiencing financial difficulty and we do not receive adequate compensation in the form of an effective interest rate that is at current market rates of interest given the risk characteristics of the loan or other consideration that compensates us for the value of the concession. The limited liquidity and higher return requirements in the real estate market for loans with higher loan-to-value (LTV) ratios have typically resulted in the conclusion that the modified terms are not at current market rates of interest, even if the modified loans are expected to be fully recoverable. For the year ended December 31, 2013, we modified $1,595 million of loans classified as TDRs. Changes to these loans primarily included maturity extensions, principal payment acceleration, changes to collateral or covenant terms and cash sweeps, which are in addition to, or sometimes in lieu of, fees and rate increases. Of our $1,595 million and $4,351 million of modifications classified as TDRs during 2013 and 2012, respectively, $197 million and $210 million have subsequently experienced a payment default in 2013 and 2012, respectively.

The vast majority of our Consumer nonaccrual financing receivables are smaller-balance homogeneous loans evaluated collectively, by portfolio, for impairment and therefore are outside the scope of the disclosure requirement for impaired loans. Accordingly, impaired loans in our Consumer business represent restructured smaller-balance homogeneous loans meeting the definition of a TDR, and are therefore subject to the disclosure requirement for impaired loans, and commercial loans in our Consumer–Other portfolio. The recorded investment of these impaired loans totaled $2,988 million (with an unpaid principal balance of $3,101 million) and comprised $109 million with no specific allowance, primarily all in our Consumer–Other portfolio, and $2,879 million with a specific allowance of $567 million at December 31, 2013. The impaired loans with a specific allowance included $261 million with a specific allowance of $35 million in our Consumer–Other portfolio and $2,618 million with a specific allowance of $532 million across the remaining Consumer business and had an unpaid principal balance and average investment of $2,948 million and $3,058 million, respectively, at December 31, 2013.

Impaired loans classified as TDRs in our Consumer business were $2,874 million and $3,041 million at December 31, 2013 and 2012, respectively. We utilize certain loan modification programs for borrowers experiencing financial difficulties in our Consumer loan portfolio. These loan modification programs primarily include interest rate reductions and payment deferrals in excess of three months, which were not part of the terms of the original contract, and are primarily concentrated in our non-U.S. residential mortgage and U.S. credit card portfolios. For the year ended December 31, 2013, we modified $1,441 million of consumer loans for borrowers experiencing financial difficulties, which are classified as TDRs, and included $879 million of non-U.S. consumer loans, primarily residential mortgages, credit cards and personal loans and $562 million of U.S. consumer loans, primarily credit cards. We expect borrowers whose loans have been modified under these programs to continue to be able to meet their contractual obligations upon the conclusion of the modification. Of our $1,441 million and $1,751 million of modifications classified as TDRs during 2013 and 2012, respectively, $266 million and $334 million have subsequently experienced a payment default in 2013 and 2012, respectively.

Substantially all of our Commercial financing receivables portfolio is secured lending and we assess the overall quality of the portfolio based on the potential risk of loss measure. The metric incorporates both the borrower's credit quality along with any related collateral protection.

Our internal risk ratings process is an important source of information in determining our allowance for losses and represents a comprehensive, statistically validated approach to evaluate risk in our financing receivables portfolios. In deriving our internal risk ratings, we stratify our Commercial portfolios into 21 categories of default risk and/or six categories of loss given default to group into three categories: A, B and C. Our process starts by developing an internal risk rating for our borrowers, which is based upon our proprietary models using data derived from borrower financial statements, agency ratings, payment history information, equity prices and other commercial borrower characteristics. We then evaluate the potential risk of loss for the specific lending transaction in the event of borrower default, which takes into account such factors as applicable collateral value, historical loss and recovery rates for similar transactions, and our collection capabilities. Our internal risk ratings process and the models we use are subject to regular monitoring and validation controls. The frequency of rating updates is set by our credit risk policy, which requires annual Risk Committee approval. The models are updated on a regular basis and statistically validated annually, or more frequently as circumstances warrant.

The table below summarizes our Commercial financing receivables by risk category. As described above, financing receivables are assigned one of 21 risk ratings based on our process and then these are grouped by similar characteristics into three categories in the table below. Category A is characterized by either high-credit-quality borrowers or transactions with significant collateral coverage that substantially reduces or eliminates the risk of loss in the event of borrower default. Category B is characterized by borrowers with weaker credit quality than those in Category A, or transactions with moderately strong collateral coverage that minimizes but may not fully mitigate the risk of loss in the event of default. Category C is characterized by borrowers with higher levels of default risk relative to our overall portfolio or transactions where collateral coverage may not fully mitigate a loss in the event of default.

	Secured
December 31 (In millions)	A		B		C		Total

2013

CLL
Americas	$	65,444	$	1,587	$	1,554	$	68,585
Europe (a)		35,968		479		1,019		37,466
Asia		8,962		140		218		9,320
Other (a)		101		-		-		101
Total CLL		110,475		2,206		2,791		115,472

Energy Financial Services		2,969		9		-		2,978

GECAS		9,175		50		152		9,377

Other		318		-		-		318
Total	$	122,937	$	2,265	$	2,943	$	128,145

2012

CLL
Americas	$	68,360	$	1,775	$	2,382	$	72,517
Europe(a)		33,756		1,188		1,256		36,200
Asia		10,732		117		372		11,221
Other(a)		159		-		94		253
Total CLL		113,007		3,080		4,104		120,191

Energy Financial Services		4,725		-		-		4,725

GECAS		10,681		223		11		10,915

Other		486		-		-		486
Total	$	128,899	$	3,303	$	4,115	$	136,317

(a) During 2013, we transferred our European equipment services portfolio from CLL Other to CLL Europe. Prior-period amounts were reclassified to conform to the current period presentation.

For our secured financing receivables portfolio, our collateral position and ability to work out problem accounts mitigates our losses. Our asset managers have deep industry expertise that enables us to identify the optimum approach to default situations. We price risk premiums for weaker credits at origination, closely monitor changes in creditworthiness through our risk ratings and watch list process, and are engaged early with deteriorating credits to minimize economic loss. Secured financing receivables within risk Category C are predominantly in our CLL businesses and are primarily composed of senior term lending facilities and factoring programs secured by various asset types including inventory, accounts receivable, cash, equipment and related business facilities as well as franchise finance activities secured by underlying equipment.

Loans within Category C are reviewed and monitored regularly, and classified as impaired when it is probable that they will not pay in accordance with contractual terms. Our internal risk rating process identifies credits warranting closer monitoring; and as such, these loans are not necessarily classified as nonearning or impaired.

Our unsecured Commercial financing receivables portfolio is primarily attributable to our Interbanca S.p.A. and GE Sanyo Credit acquisitions in Europe and Asia, respectively. At December 31, 2013 and 2012, these financing receivables included $313 million and $458 million rated A, $580 million and $583 million rated B, and $231 million and $452 million rated C, respectively.

Due to the primarily non-recourse nature of our Debt portfolio, loan-to-value ratios provide the best indicators of the credit quality of the portfolio.

	Loan-to-value ratio
	2013						2012
	Less than		80% to		Greater than		Less than		80% to		Greater than
December 31 (In millions)	80%		95%		95%		80%		95%		95%

Debt	$	15,576	$	1,300	$	2,111	$	13,570	$	2,572	$	3,604

By contrast, the credit quality of the owner occupied/credit tenant portfolio is primarily influenced by the strength of the borrower's general credit quality, which is reflected in our internal risk rating process, consistent with the process we use for our Commercial portfolio. At December 31, 2013, the internal risk rating of A, B and C for our owner occupied/credit tenant portfolio approximated $571 million, $179 million and $162 million, respectively, as compared to December 31, 2012, ratings of $956 million, $25 million and $219 million, respectively.

Within Real Estate-Debt, these financing receivables are primarily concentrated in our North American and European Lending platforms and are secured by various property types. A substantial majority of the Real Estate-Debt financing receivables with loan-to-value ratios greater than 95% are paying in accordance with contractual terms. Substantially all of these loans and the majority of our owner occupied/credit tenant financing receivables included in Category C are impaired loans that are subject to the specific reserve evaluation process described in Note 1. The ultimate recoverability of impaired loans is driven by collection strategies that do not necessarily depend on the sale of the underlying collateral and include full or partial repayments through third-party refinancing and restructurings.

At December 31, 2013, our U.S. consumer financing receivables included private-label credit card and sales financing for approximately 61 million customers across the U.S. with no metropolitan area accounting for more than 6% of the portfolio. Of the total U.S. consumer financing receivables, approximately 67% relate to credit card loans that are often subject to profit and loss-sharing arrangements with the retailer (which are recorded in revenues), and the remaining 33% are sales finance receivables that provide financing to customers in areas such as electronics, recreation, medical and home improvement.

Our Consumer financing receivables portfolio comprises both secured and unsecured lending. Secured financing receivables comprise residential loans and lending to small and medium-sized enterprises predominantly secured by auto and equipment, inventory finance and cash flow loans. Unsecured financing receivables include private-label credit card financing. A substantial majority of these cards are not for general use and are limited to the products and services sold by the retailer. The private-label portfolio is diverse with no metropolitan area accounting for more than 6% of the related portfolio.

For our secured non-U.S. residential mortgage book, we assess the overall credit quality of the portfolio through loan-to-value ratios (the ratio of the outstanding debt on a property to the value of that property at origination). In the event of default and repossession of the underlying collateral, we have the ability to remarket and sell the properties to eliminate or mitigate the potential risk of loss. The table below provides additional information about our non-U.S. residential mortgages based on loan-to-value ratios.

	Loan-to-value ratio
	2013						2012
	80% or		Greater than		Greater than		80% or		Greater than		Greater than
December 31 (In millions)	less		80% to 90%		90%		less		80% to 90%		90%

Non-U.S. residential mortgages	$	17,224	$	5,130	$	8,147	$	18,568	$	5,699	$	9,083

The majority of these financing receivables are in our U.K. and France portfolios and have re-indexed loan-to-value ratios of 77% and 56%, respectively. Re-indexed loan-to-value ratios may not reflect actual realizable values of future repossessions. We have third-party mortgage insurance for about 24% of the balance of Consumer non-U.S. residential mortgage loans with loan-to-value ratios greater than 90% at December 31, 2013. Such loans were primarily originated in France and the U.K.

For our unsecured lending products, including the non-U.S. and U.S. installment and revolving credit and non-U.S. auto portfolios, we assess overall credit quality using internal and external credit scores. Our internal credit scores imply a probability of default that we consistently translate into three approximate credit bureau equivalent credit score categories, including (a) 671 or higher, which are considered the strongest credits; (b) 626 to 670, which are considered moderate credit risk; and (c) 625 or less, which are considered weaker credits.

	Internal ratings translated to approximate credit bureau equivalent score
	2013						2012
	671 or		626 to		625 or		671 or		626 to		625 or
(In millions)	higher		670		less		higher		670		less

Non-U.S. installment and
revolving credit	$	8,310	$	2,855	$	2,512	$	10,228	$	4,267	$	3,321
U.S. installment and
revolving credit		36,723		11,101		8,030		33,204		9,753		7,896
Non-U.S. auto		1,395		373		286		3,141		666		453

Of those financing receivable accounts with credit bureau equivalent scores of 625 or less at December 31, 2013, 97% relate to installment and revolving credit accounts. These smaller-balance accounts have an average outstanding balance less than one thousand U.S. dollars and are primarily concentrated in our retail card and sales finance receivables in the U.S. (which are often subject to profit and loss-sharing arrangements), and closed-end loans outside the U.S., which minimizes the potential for loss in the event of default. For lower credit scores, we adequately price for the incremental risk at origination and monitor credit migration through our risk ratings process. We continuously adjust our credit line underwriting management and collection strategies based on customer behavior and risk profile changes.

Secured lending in Consumer – Other comprises loans to small and medium-sized enterprises predominantly secured by auto and equipment, inventory finance and cash flow loans. We develop our internal risk ratings for this portfolio in a manner consistent with the process used to develop our Commercial credit quality indicators, described above. We use the borrower's credit quality and underlying collateral strength to determine the potential risk of loss from these activities.

At December 31, 2013, Consumer – Other financing receivables of $6,137 million, $315 million and $501 million were rated A, B and C, respectively. At December 31, 2012, Consumer – Other financing receivables of $6,873 million, $451 million and $746 million were rated A, B and C, respectively.