GE 2005 Annual Report Download - page 138

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(138)
Key assumptions used in measuring the fair value of retained interests in securitizations and the sensitivity of the
current fair value of residual cash flows to changes in those assumptions related to all outstanding retained interests
as of December 31, 2005, are noted in the following table.
(Dollars in millions) Equipment
Commercial
real estate
Other
assets
Credit card
receivables
DISCOUNT RATE(a) 6.4% 11.0% 5.5 % 11.1%
Effect of:
10% Adverse change $ (12) $ (14) $ (4 ) $ (10)
20% Adverse change (24) (26) (8 ) (23)
PREPAYMENT RATE(a) 9.7% 1.8% 8.4 % 12.8%
Effect of:
10% Adverse change $ (6) $ (5) $ (7 ) $ (40)
20% Adverse change (12) (10) (12 ) (77)
ESTIMATE OF CREDIT LOSSES(a) 2.0% 1.1% 0.5 % 7.1%
Effect of:
10% Adverse change $ (11) $ (7) $ (5 ) $ (39)
20% Adverse change (22) (13) (9 ) (81)
Remaining weighted
average lives (in months) 27 51 15 7
Net credit losses $ 63 $
$ 8 $ 588
Delinquencies 93 5 59 374
(a) Based on weighted averages.
GUARANTEE AND REIMBURSEMENT CONTRACTS. We provide protection to certain counterparties of
interest rate swaps entered into by securitization-related entities related to changes in the relationship between
commercial paper interest rates and the timing and amount of the payment streams. These arrangements provide
protection for the life of the assets held by the securitization entities but generally amortize in proportion to the
decline in underlying asset principal balances. At December 31, 2005, the notional amount of such support was
$1,259 million and related assets and liabilities were insignificant.
Note 29
Commitments and Guarantees
Commitments, including guarantees
In our Aviation business of Infrastructure, we had committed to provide financial assistance on $2,269 million of
future customer acquisitions of aircraft equipped with our engines, including commitments made to airlines in 2005
for future sales under our GE90 and GEnx engine campaigns. The Aviation Financial Services business of
Infrastructure had placed multiple-year orders for various Boeing, Airbus and other aircraft with list prices
approximating $10,595 million at December 31, 2005.
At December 31, 2005, we were committed under the following guarantee arrangements beyond those
provided on behalf of securitization entities. See note 28.