GE 2005 Annual Report Download - page 102
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(102)
The following tables present the gross unrealized losses and estimated fair values of our available-for-sale
investment securities.
Less than 12 months 12 months or more
December 31 (In millions)
Estimated
fair
value
Gross
unrealized
losses
Estimated
fair
value
Gross
unrealized
losses
2005
Debt:
U.S. corporate $3,640 $(131) $2,584 $ (208)
State and municipal 77 (2)
–
–
Mortgage-backed 1,859 (22) 1,190 (34)
Asset-backed 1,495 (10) 383 (9)
Corporate-non-U.S. 286 (9) 73 (2)
U.S. government and
federal agency 297 (5)
–
–
Equity
84 (25) 38 (13)
Total $7,738 $(204) $4,268 $ (266)
2004
Debt:
U.S. corporate $ 3,198 $ (88) $ 1,346 $ (274)
Mortgage-backed 2,465 (19) 197 (6)
Asset-backed 1,586 (15) 429 (31)
Corporate-non-U.S. 2,512 (2) 168 (5)
U.S. government and
federal agency 116 (1)
–
–
Equity 148 (14) 49 (4)
Total $ 10,025 $ (139) $ 2,189 $ (320)
Securities in an unrealized loss position for 12 months or more at December 31, 2005 and 2004, included investment
securities collateralized by commercial aircraft, primarily Enhanced Equipment Trust Certificates, with unrealized
losses of $96 million and $259 million, respectively, and estimated fair values of $1,207 million and $810 million,
respectively. We review all of our investment securities routinely for other than temporary impairment as described
in note 1. In accordance with that policy, we have provided for all amounts that we did not expect either to collect in
accordance with the contractual terms of the instruments or to recover based on underlying collateral values. For our
securities collateralized by commercial aircraft, that review included our best estimates of the securities’ cash flows
and underlying collateral values, and assessment of whether the borrower was in compliance with terms and
conditions. We believe that these securities, which are current on all payment terms, were trading at a discount to
market value since the respective stated interest rates on the securities were below what was perceived as a market
rate based on the ongoing negative market reaction to difficulties in the commercial airline industry. We do not
anticipate changes in the timing and amount of estimated cash flows and we expect full recovery of our amortized
cost. Should our cash flow expectation prove to be incorrect, the current appraised market values of associated
collateral exceeded both the market value and the amortized cost of our related securities at December 31, 2005.
We presently intend to hold our investment securities in an unrealized loss position at December 31, 2005,
at least until we can recover their respective amortized cost. We have the ability to hold our debt securities until their
maturities.