GE 2006 Annual Report Download - page 89

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    
The following tables present the gross unrealized losses and
estimated fair values of our investment securities.
Less than 12 months 12 months or more
Gross Gross
Estimated unrealized Estimated unrealized
December 31 (In millions) fair value losses fair value losses
2006
Debt
U.S. corporate $2,478 $ (52) $ 4,260 $(151)
State and municipal 164 (2) 77 (2)
Mortgage-backed 668 (4) 1,851 (42)
Asset-backed 1,393 (15) 674 (8)
Corporate — non-U.S. 112 (3) 93 (2)
Government — non-U.S. 33 (3) — —
U.S. government and
federal agency 66 (1) 247 (5)
Equity 40 (12) 3,895 (3)
Total $4,954 $ (92) $11,097 $(213)
2005
Debt
U.S. corporate $3,633 $(131) $ 2,584 $(208)
State and municipal 77 (2) — —
Mortgage-backed 1,858 (22) 1,190 (34)
Asset-backed 1,494 (10) 383 (9)
Corporate — non-U.S. 221 (8) 53 (2)
U.S. government and
federal agency 297 (5) — —
Equity 84 (25) 38 (13)
Total $7,664 $(203) $ 4,248 $(266)
Our portfolio at December 31, 2006 and 2005, contained securities
that had been, for 12 months or more, in an unrealized loss
position for reasons other than changes in market interest rates.
The level of this unrealized loss was insignifi cant, individually
and in the aggregate, at December 31, 2006, refl ecting improved
pricing in the commercial aircraft Enhanced Equipment Trust
Certificate market. 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. We presently intend to hold our
investment securities in an unrealized loss position at December 31,
2006, at least until we can recover their respective amortized cost
and we have the ability to hold our debt securities until their
maturities.
CONTRACTUAL MATURITIES OF GECS INVESTMENT IN
DEBT SECURITIES (EXCLUDING MORTGAGE-BACKED AND
ASSET-BACKED SECURITIES)
Amortized Estimated
(In millions) cost fair value
Due in
2007 $ 1,832 $ 1,826
2008–2011 4,766 4,784
2012–2016 3,470 3,545
2017 and later 15,950 16,964
We expect actual maturities to differ from contractual
maturities because borrowers have the right to call or prepay
certain obligations.
Supplemental information about gross realized gains and
losses on investment securities follows.
(In millions) 2006 2005 2004
GE
Gains $ 125 $ 6 $ 15
Losses, including impairments (1) (5) —
Net 124 1 15
GECS
Gains 313 509 371
Losses, including impairments (181) (132) (149)
Net 132 377 222
Total $ 256 $ 378 $ 237
In the ordinary course of managing our investment securities
portfolio, we may sell securities prior to their maturities for a
variety of reasons, including diversification, credit quality,
yield and liquidity requirements and the funding of claims and
obligations to policyholders.
Proceeds from investment securities sales amounted to
$12,394 million, $14,047 million and $11,685 million in 2006, 2005
and 2004, respectively, principally from the short-term nature
of the investments that support the guaranteed investment
contracts portfolio.
ge 2006 annual report 87