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100 GE 2009 ANNUAL REPORT
    
The following tables present the changes in Level 3 instruments measured on a recurring basis for the years ended December 31, 2009
and 2008, respectively. The majority of our Level 3 balances consist of investment securities classified as available-for-sale with changes
in fair value recorded in shareowners’ equity.
CHANGES IN LEVEL 3 INSTRUMENTS FOR THE YEAR ENDED DECEMBER 31, 2009
(In millions) January 1, 2009
Net realized
unrealized
gains (losses
included in
earnings
/
)
(a)
Net realized
unrealized
gains (losses
included in
accumulated
other
comprehensive
income
/
)
Purchases,
issuances and
settlements
Transfers
in and/or out
of Level 3 (b) December 31,
2009
Net change in
unrealized
gains (losses)
relating to
instruments
still held at
December 31,
2009 (c)
Investment securities
Debt
U.S. corporate $ 3,220 $ (108) $ 388 $(248) $ 6 $ 3,258 $ 4
State and municipal 247 — (100) (10) 36 173 —
Residential mortgage-backed 173 (1) (6) (20) (23) 123 —
Commercial mortgage-backed 66 — (5) (7) 1 55 —
Asset-backed 1,605 3 246 97 (74) 1,877 —
Corporate — non-U.S. 659 (1) 82 77 172 989 —
Government — non-U.S. 424 — 9 4 (261) 176 —
U.S. government and federal agency 183 — 102 (3) — 282 —
Retained interests 6,356 1,273 (d) 382 820 — 8,831 252
Equity
Available-for-sale 23 (1) 3 (1) (5) 19 —
Trading ———————
Derivatives (e) 1,003 80 (29) (294) (159) 601 90
Other 1,105 (172) 31 35 7 1,006 (134)
Total $15,064 $1,073 $1,103 $ 450 $ (300) $17,390 $ 212
(a) Earnings effects are primarily included in the “GECS 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.
(c) Represented the amount of unrealized gains or losses for the period included in earnings.
(d) Primarily comprised of interest accretion.
(e) Represented derivative assets net of derivative liabilities and included cash accruals of $19 million not reflected in the fair value hierarchy table.
CHANGES IN LEVEL 3 INSTRUMENTS FOR THE YEAR ENDED DECEMBER 31, 2008
(In millions) January 1, 2008
Net realized
unrealized
gains (losses
included in
earnings
/
)
(a)
Net realized
unrealized
gains (losses
included in
accumulated
other
comprehensive
income
/
)
Purchases,
issuances and
settlements
Transfers
in and/or out
of Level 3 (b) December 31,
2008
Net change in
unrealized
gains (losses)
relating to
instruments
still held at
December 31,
2008 (c)
Investment securities $12,447 $ 430 $(1,586) $ 671 $ 994 $12,956 $ 7
Derivatives (d) (e) 265 866 141 (256) (13) 1,003 636
Other 1,330 (157) (29) (90) 51 1,105 (165)
Total $14,042 $1,139 $(1,474) $ 325 $1,032 $15,064 $ 478
(a) Earnings effects are primarily included in the “GECS 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 into Level 3 were a result of increased use of non-binding broker quotes that
could not be validated with other market observable data, resulting from continued deterioration in the credit markets.
(c) Represented the amount of unrealized gains or losses for the period included in earnings.
(d) Earnings from derivatives were partially offset by $760 million in losses from related derivatives included in Level 2 and $4 million in losses from underlying debt obligations in
qualifying fair value hedges.
(e) Represented derivative assets net of derivative liabilities and included cash accruals of $27 million not reflected in the fair value hierarchy table.