GE 2013 Annual Report Download - page 134

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132 GE 2013 ANNUAL REPORT
    
Our largest exposure to any single unconsolidated VIE at
December 31, 2013 is an investment in asset-backed securi-
ties issued by the Senior Secured Loan Program (SSLP), a fund
that invests in high-quality senior secured debt of various
middle-market companies ($6,996 million). Other signifi cant
unconsolidated VIEs include investments in real estate entities
($2,369 million), which generally consist of passive limited part-
nership investments in tax-advantaged, multi-family real estate
and investments in various European real estate entities; and
exposures to joint ventures that purchase factored receivables
($2,624 million).
The classifi cation of our variable interests in these entities in
our fi nancial statements is based on the nature of the entity and
the type of investment we hold. Variable interests in partnerships
and corporate entities are classifi ed as either equity method or
cost method investments. In the ordinary course of business, we
also make investments in entities in which we are not the pri-
mary benefi ciary but may hold a variable interest such as limited
partner interests or mezzanine debt investments. These invest-
ments are classifi ed in two captions in our fi nancial statements:
“All other assets” for investments accounted for under the equity
method, and “Financing receivables—net” for debt fi nancing pro-
vided to these entities. Our investments in unconsolidated VIEs at
December 31, 2013 and December 31, 2012 follow.
December 31 (In millions) 2013 2012
Other assets and investment securities $ 9,129 $ 10,027
Financing receivables—net 3,346 2,654
Total investments 12,475 12,681
Contractual obligations to fund
investments or guarantees 2,741 2,608
Revolving lines of credit 31 41
Total $ 15,247 $ 15,330
As previously reported, during 2012, Penske Truck Leasing Co.,
L.P. (PTL) effected a recapitalization and subsequently acquired
third-party fi nancing in order to repay outstanding debt owed to
GECC. In the fi rst quarter of 2013, PTL had repaid all outstanding
debt owed and terminated its borrowing arrangement with GECC.
During the second quarter of 2013, PTL ceased to be a VIE as a
result of a principal in PTL retiring from the GE Board. Therefore,
our investment in PTL ($899 million at December 31, 2013) is not
reported in the December 31, 2013 balance in the table above.
As co-issuer and co-guarantor of the $700 million of debt raised
by the funding entity related to PTL, GECC reports this amount,
which is also our loss exposure and excluded from the table
above, as debt of GECC in its fi nancial statements. GECC has been
indemnifi ed by the other limited partners of PTL for their propor-
tionate share of the debt obligation.
In addition to the entities included in the table above, we also
hold passive investments in RMBS, CMBS and ABS issued by VIEs.
Such investments were, by design, investment grade at issuance
and held by a diverse group of investors. Further information
about such investments is provided in Note 3.