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128 GE 2013 ANNUAL REPORT
    
The following table provides information about the fair value of our derivatives by contract type, separating those accounted for as
hedges and those that are not.
Fair value
2013 2012
December 31 (In millions) Assets Liabilities Assets Liabilities
DERIVATIVES ACCOUNTED FOR AS HEDGES
Interest rate contracts $ 3,837 $ 1,989 $ 8,443 $ 719
Currency exchange contracts 1,830 984 890 1,777
Other contracts 1 — 1 —
5,668 2,973 9,334 2,496
DERIVATIVES NOT ACCOUNTED FOR AS HEDGES
Interest rate contracts 270 169 452 195
Currency exchange contracts 2,257 2,245 1,797 691
Other contracts 284 42 283 72
2,811 2,456 2,532 958
GROSS DERIVATIVES RECOGNIZED IN STATEMENT OF FINANCIAL POSITION
Gross derivatives 8,479 5,429 11,866 3,454
Gross accrued interest 1,227 241 1,683 14
9,706 5,670 13,549 3,468
AMOUNTS OFFSET IN STATEMENT OF FINANCIAL POSITION
Netting adjustments (a) (4,120) (4,113) (2,801) (2,786)
Cash collateral (b) (2,619) (242) (5,125) (391)
(6,739) (4,355) (7,926) (3,177)
NET DERIVATIVES RECOGNIZED IN STATEMENT OF FINANCIAL POSITION
Net derivatives 2,967 1,315 5,623 291
AMOUNTS NOT OFFSET IN STATEMENT OF FINANCIAL POSITION
Securities held as collateral (c) (1,962) — (5,227) —
Net amount $ 1,005 $ 1,315 $ 396 $ 291
Derivatives are classified in the captions “All other assets” and “All other liabilities” and the related accrued interest is classified in “Other GECC receivables” and “All other
liabilities” in our financial statements.
(a) The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts included fair value adjustments
related to our own and counterparty non-performance risk. At December 31, 2013 and 2012, the cumulative adjustment for non-performance risk was a gain (loss) of $(7)
million and $(15) million, respectively.
(b) Excludes excess cash collateral received and posted of $160 million and $37 million at December 31, 2013, respectively, and $42 million and $10 million at December 31,
2012, respectively.
(c) Excludes excess securities collateral received of $363 million and $359 million at December 31, 2013 and 2012, respectively.
Fair Value Hedges
We use interest rate and currency exchange derivatives to hedge
the fair value effects of interest rate and currency exchange rate
changes on local and non-functional currency denominated
fi xed-rate debt. For relationships designated as fair value hedges,
changes in fair value of the derivatives are recorded in earnings
within interest and other fi nancial charges, along with offset-
ting adjustments to the carrying amount of the hedged debt.
The following table provides information about the earnings
effects of our fair value hedging relationships for the years ended
December 31, 2013 and 2012, respectively.
2013 2012
(In millions)
Gain (loss)
on hedging
derivatives
Gain (loss)
on hedged
items
Gain (loss)
on hedging
derivatives
Gain (loss)
on hedged
items
Interest rate contracts $ (5,258) $ 5,180 $ 708 $ (1,041)
Currency exchange
contracts (7) 6 (68) 98
Fair value hedges resulted in $(79) million and $(303) million of ineffectiveness in
2013 and 2012, respectively. In both 2013 and 2012, there were insignificant
amounts excluded from the assessment of effectiveness.
Cash Flow Hedges
We use interest rate, currency exchange and commodity
derivatives to reduce the variability of expected future cash
fl ows associated with variable-rate borrowings and commercial
purchase and sale transactions, including commodities. For
derivatives that are designated in a cash fl ow hedging relation-
ship, the effective portion of the change in fair value of the
derivative is reported as a component of AOCI and reclassifi ed
into earnings contemporaneously and in the same caption with
the earnings effects of the hedged transaction.
The following table provides information about the amounts
recorded in AOCI, as well as the gain (loss) recorded in earn-
ings, primarily in GECC revenues from services, interest and
other fi nancial charges, and other costs and expenses, when