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GE 2010 ANNUAL REPORT 111
    
CHANGES IN LEVEL 3 INSTRUMENTS FOR THE YEAR ENDED DECEMBER 31, 2009
Net realized/ Net change
unrealized in unrealized
gains (losses) gains (losses)
Net realized/ included in relating to
unrealized accumulated Purchases, Transfers instruments
gains (losses) other issuances in and/or still held at
January 1, included in comprehensive and out of December 31, December 31,
(In millions) 2009 earnings (a) income settlements Level 3 (b) 2009 2009 (c)
Investment securities
Debt
U.S. corporate $ 3,114 $ (108) $ 360 $(304) $ 6 $ 3,068 $ 4
State and municipal 252 — (101) 18 36 205 —
Residential mortgage-backed 173 (1) (6) (20) (23) 123 —
Commercial mortgage-backed 70 — (5) (8) 1 58 —
Asset-backed 1,601 3 246 98 (74) 1,874 —
Corporate—non-U.S. 790 — 108 44 172 1,114 —
Government—non-U.S. 424 — 10 (10) (261) 163 —
U.S. government and federal agency 153 — 103 — — 256 —
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 (171) 30 (6) 7 965 (134)
Total $15,064 $1,075 $1,101 $ 337 $(300) $17,277 $ 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.
The following table represents the fair value adjustments to
assets measured at fair value on a non-recurring basis and still
held at December 31, 2010 and 2009.
Year ended December 31
(In millions) 2010 2009
Financing receivables
and loans held for sale $(1,745) $(1,683)
Cost and equity method
investments (a) (274) (921)
Long-lived assets,
including real estate
(b) (2,958) (1,107)
Retained investments in
formerly consolidated subsidiaries 184 237
Total $(4,793) $(3,474)
(a) Includes fair value adjustments associated with private equity and real estate
funds of $(198) million and $(238) million during 2010 and 2009, respectively.
(b) Includes $2,089 million of impairments related to real estate equity properties and
investments recorded in other costs and expenses during 2010.
Non-Recurring Fair Value Measurements
The following table represents non-recurring fair value amounts
(as measured at the time of the adjustment) for those assets
remeasured to fair value on a non-recurring basis during the fiscal
year and still held at December 31, 2010 and 2009. These assets
can include loans and long-lived assets that have been reduced to
fair value when they are held for sale, impaired loans that have
been reduced based on the fair value of the underlying collateral,
cost and equity method investments and long-lived assets that
are written down to fair value when they are impaired and the
remeasurement of retained investments in formerly consolidated
subsidiaries upon a change in control that results in deconsolida-
tion of a subsidiary, if we sell a controlling interest and retain a
noncontrolling stake in the entity. Assets that are written down to
fair value when impaired and retained investments are not subse-
quently adjusted to fair value unless further impairment occurs.
Remeasured during the year ended December 31
2010 2009
(In millions) Level 2 Level 3 Level 2 Level 3
Financing receivables
and loans held for sale $ 54 $ 6,833 $ 81 $ 5,352
Cost and equity method
investments(a) — 510 — 1,006
Long-lived assets,
including real estate 1,025 5,811 435 5,074
Retained investments in
formerly consolidated
subsidiaries(b) — 113 — 5,903
Total $1,079 $13,267 $516 $17,335
(a) Includes the fair value of private equity and real estate funds included in Level 3
of $296 million and $409 million at December 31, 2010 and 2009, respectively.
(b) During 2010, our retained investment in Regency, a formerly consolidated
subsidiary, was remeasured to a Level 1 fair value of $549 million.