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116 GE 2011 ANNUAL REPORT
    
The following tables present the changes in Level 3 instruments measured on a recurring basis for the years ended December 31, 2011
and 2010, respectively. The majority of our Level 3 balances consist of investment securities classifi ed as available-for-sale with changes
in fair value recorded in shareowners’ equity.
CHANGES IN LEVEL 3 INSTRUMENTS FOR THE YEAR ENDED DECEMBER 31, 2011
(In millions)
Balance at
January 1,
2011
Net realized/
unrealized
gains (losses)
included in
earnings (a)
Net realized/
unrealized
gains (losses)
included in
accumulated
other
compre hensive
income Purchases Sales Settlements
Transfers
into Level 3 (b)
Transfers
out of
Level 3 (b)
Balance at
December 31,
2011
Net change in
unrealized
gains (losses)
relating to
instruments
still held at
December 31,
2011 (c)
Investment securities
Debt
U.S. corporate $3,199 $ 78 $(157) $ 235 $(183) $(112) $182 $ (7) $ 3,235 $ —
State and municipal 225 — — 12 — (8) — (152) 77 —
Residential
mortgage-backed 66 (3) 1 2 (5) (1) 71 (90) 41 —
Commercial
mortgage-backed 49 — — 6 — (4) 3 (50) 4 —
Asset-backed 2,540 (10) 61 2,157 (185) (11) 1 (513) 4,040 —
Corporate—non-U.S. 1,486 (47) (91) 25 (55) (118) 85 (81) 1,204 —
Government—non-U.S. 156 (100) 48 41 (1) (27) 107 (140) 84 —
U.S. government and
federal agency 210 — 43 500 — — — (500) 253 —
Retained interests 39 (28) 26 8 (5) (5) — — 35 —
Equity
Available-for-sale 24 — — — — — 4 (11) 17 —
Trading — — ——— — —— — —
Derivatives (d)(e) 265 151 2 (2) — (207) 150 10 369 130
Other 906 95 (9) 152 (266) (6) — (55) 817 34
Total $9,165 $136 $ (76) $3,136 $(700) $(499) $603 $(1,589) $10,176 $164
(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) Represented derivative assets net of derivative liabilities and included cash accruals of $3 million not reflected in the fair value hierarchy table.
(e) Gains (losses) included in net realized/unrealized gains (losses) included in earnings were offset by the earnings effects from the underlying items that were economically
hedged. See Note 22.