GE 2011 Annual Report Download - page 115

GE 2011 ANNUAL REPORT 113
    
The fair value of each restricted stock unit is the market price of
our stock on the date of grant. The weighted average grant date
fair value of RSUs granted during 2011, 2010 and 2009 was $16.74,
$15.89 and $13.63, respectively. The total intrinsic value of RSUs
vested during 2011, 2010 and 2009 amounted to $154 million,
$111 million and $139 million, respectively. As of December 31,
2011, there was $210 million of total unrecognized compensation
cost related to nonvested RSUs. That cost is expected to be rec-
ognized over a weighted average period of two years, of which
approximately $72 million after tax is expected to be recognized
in 2012. As of December 31, 2011, 0.7 million PSUs with a
weighted average remaining contractual term of three years, an
aggregate intrinsic value of $13 million and $2 million of unrecog-
nized compensation cost were outstanding. Other share-based
compensation expense for RSUs and PSUs recognized in net
earnings amounted to $84 million, $116 million and $127 million in
2011, 2010 and 2009, respectively.
The income tax benefi t recognized in earnings based on the
compensation expense recognized for all share-based compen-
sation arrangements amounted to $163 million, $143 million and
$118 million in 2011, 2010 and 2009, respectively. The excess of
actual tax deductions over amounts assumed, which are recognized
in shareowners’ equity, were insignifi cant in 2011, 2010 and 2009.
When stock options are exercised and restricted stock vests,
the difference between the assumed tax benefi t and the actual
tax benefi t must be recognized in our fi nancial statements. In
circumstances in which the actual tax benefi t is lower than the
estimated tax benefi t, that difference is recorded in equity, to
the extent there are suffi cient accumulated excess tax benefi ts.
At December 31, 2011, our accumulated excess tax benefi ts
are suffi cient to absorb any future differences between actual
and estimated tax benefi ts for all of our outstanding option and
restricted stock grants.
Note 17.
Other Income
(In millions) 2011 2010 2009
GE
Purchases and sales of business
interests (a) $3,804 $ 319 $ 363
Associated companies (b) 894 413 667
Licensing and royalty income 304 364 217
Interest income from GECS 206 133 173
Marketable securities and bank deposits 52 40 54
Other items 916 (295)
5,269 1,285 1,179
ELIMINATIONS (206) (134) (173)
Total $5,063 $1,151 $1,006
(a) Included a pre-tax gain of $3,705 million ($526 million after tax) related to our
transfer of the assets of our NBCU business to a newly formed entity, NBCU
LLC, in 2011. See Note 2.
(b) Included income of $789 million from our equity method investment in NBCU
LLC in 2011 and a gain of $552 million related to dilution of our interest in A&E
Television Network from 25% to 15.8% in 2009.
Note 18.
GECS Revenues from Services
(In millions) 2011 2010 2009
Interest on loans (a) $20,069 $20,835 $18,518
Equipment leased to others 11,343 11,116 12,231
Fees (a) 4,698 4,734 4,432
Investment income (a)(b) 2,500 2,185 3,379
Financing leases (a) 2,378 2,749 3,255
Associated companies (c) 2,337 2,035 1,006
Premiums earned by insurance
activities 1,905 2,014 2,065
Real estate investments 1,625 1,240 1,543
Net securitization gains (a) —— 1,589
Other items (d) 2,078 2,440 2,830
Total $48,933 $49,348 $50,848
(a) On January 1, 2010, we adopted ASU 2009-16 & 17, which required us to
consolidate substantially all of our former QSPEs. As a result, 2011 and 2010
GECS revenues from services include interest, investment and fee income from
these entities, which were not presented on a consolidated basis in 2009. During
2011 and 2010, we did not recognize gains from securitization transactions, as
they were recorded as on-book financings. See Note 24.
(b) Included net other-than-temporary impairments on investment securities of
$387 million, $253 million and $581 million in 2011, 2010 and 2009, respectively.
See Note 3.
(c) During 2011, we sold an 18.6% equity interest in Garanti Bank and recorded a
pre-tax gain of $690 million. Following the sale, we hold a 2.25% equity interest,
which is classified as an available-for-sale security.
(d) Included a gain on the sale of a limited partnership interest in PTL and a related
gain on the remeasurement of the retained investment to fair value totaling
$296 million in the first quarter of 2009. See Note 24.
Note 19.
Supplemental Cost Information
We funded research and development expenditures of
$4,601 million in 2011, $3,939 million in 2010 and $3,288 million in
2009. Research and development costs are classifi ed in cost of
goods sold in the Statement of Earnings. In addition, research and
development funding from customers, principally the U.S. gov-
ernment, totaled $788 million, $979 million and $1,050 million in
2011, 2010 and 2009, respectively.
Rental expense under operating leases is shown below.
(In millions) 2011 2010 2009
GE $968 $1,073 $1,012
GECS 615 637 801
At December 31, 2011, minimum rental commitments under
noncancellable operating leases aggregated $2,387 million and
$2,119 million for GE and GECS, respectively. Amounts payable
over the next fi ve years follow.
(In millions) 2012 2013 2014 2015 2016
GE $519 $450 $381 $307 $263
GECS 505 332 253 197 167