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124 GE 2013 ANNUAL REPORT
    
CHANGES IN LEVEL 3 INSTRUMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
(In millions)
Balance at
January 1,
2012
Net realized/
unrealized
gains (losses)
included in
earnings (a)
Net realized/
unrealized
gains (losses)
included in
accumulated
other
comprehen-
sive income Purchases Sales Settlements
Transfers
into
Level 3 (b)
Transfers
out of
Level 3 (b)
Balance at
December 31,
2012
Net change
in unrealized
gains (losses)
relating to
instruments
still held at
December 31,
2012 (c)
Investment securities
Debt
U.S. corporate $ 3,235 $ 66 $ 32 $ 483 $ (214) $ (110) $ 299 $ (200) $ 3,591 $ —
State and municipal 77 — 10 16 — (1) 78 (103) 77 —
Residential
mortgage-backed 41 (3) 1 6 — (3) 135 (77) 100 —
Commercial
mortgage-backed 4 — (1) — — — 6 (3) 6 —
Asset-backed 4,040 1 (25) 1,490 (502) — 25 (6) 5,023 —
Corporate—non-U.S. 1,204 (11) 19 341 (51) (172) 24 (136) 1,218 —
Government—non-U.S. 84 (33) 38 65 (72) (40) — — 42 —
U.S. government and
federal agency 253 — 24 — — — — — 277 —
Retained interests 35 (1) (3) 16 (6) (12) 54 — 83 —
Equity
Available-for-sale 17 — (1) 3 (3) (1) 2 (4) 13 —
Trading — — — — — — — — — —
Derivatives (d) (e) 369 29 (1) (1) — (112) 190 (58) 416 160
Other 817 50 2 159 (137) — — (92) 799 43
Total $ 10,176 $ 98 $ 95 $ 2,578 $ (985) $ (451) $ 813 $ (679) $ 11,645 $ 203
(a) Earnings effects are primarily included in the “GECC 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 $2 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.
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
fi scal year and still held at December 31, 2013 and 2012. 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 deconsolidation 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 invest-
ments are not subsequently adjusted to fair value unless further
impairment occurs.
Remeasured during the year ended December 31
2013 2012
(In millions) Level 2 Level 3 Level 2 Level 3
Financing receivables
and loans held for sale $ 210 $ 2,986 $ 366 $ 4,094
Cost and equity method
investments (a) — 690 8 313
Long-lived assets,
including real estate 2,050 1,088 702 2,182
Total $ 2,260 $ 4,764 $ 1,076 $ 6,589
(a) Includes the fair value of private equity and real estate funds included in Level 3
of $126 million and $84 million at December 31, 2013 and 2012, respectively.
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, 2013 and 2012.
Year ended December 31
(In millions) 2013 2012
Financing receivables and loans held for sale $ (361) $ (595)
Cost and equity method investments (a) (484) (153)
Long-lived assets, including real estate (b) (1,188) (624)
Total $ (2,033) $ (1,372)
(a) Includes fair value adjustments associated with private equity and real estate
funds of $(14) million and $(33) million during 2013 and 2012, respectively.
(b) Includes impairments related to real estate equity properties and investments
recorded in other costs and expenses of $108 million and $218 million during
2013 and 2012, respectively.