GE 2015 Annual Report Download - page 110

MD&A FINANCIAL RESOURCES AND LIQUIDITY
82 GE 2015 FORM 10-K
Swap, forward and option contracts are executed under standard master agreements that typically contain mutual downgrade
provisions that provide the ability of the counterparty to require termination if the long-term credit ratings of the applicable GE entity
were to fall below A-/A3 or other ratings levels agreed upon with the counterparty. In certain of these master agreements, the
counterparty also has the ability to require termination if the short-term ratings of the applicable GE entity were to fall below A-1/P-1.
The net derivative liability after consideration of netting arrangements, outstanding interest payments and collateral posted by us under
these master agreements was estimated to be $0.7 billion at December 31, 2015. See Notes 20 and 27 to the consolidated financial
statements.
For further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements see
Notes 20 and 27 to the consolidated financial statements.
INCOME MAINTENANCE AGREEMENT AND GE GUARANTEE OF CERTAIN GE CAPITAL DEBT
GE provides implicit and explicit support to GE Capital through commitments, capital contributions and operating support. As part of the
GE Capital Exit Plan, on April 10, 2015, GE and GE Capital entered into an amendment to their existing financial support agreement.
Under this amendment (the Amendment), the Company has provided a full and unconditional guarantee (the Guarantee) of the
payment of principal and interest on all tradable senior and subordinated outstanding long-term debt securities and all commercial
paper issued or guaranteed by GE Capital identified in the Amendment. The Guarantee replaced the requirement that the Company
make certain income maintenance payments to GE Capital in certain circumstances. GE &DSLWDO¶V U.S. public indentures were
concurrently amended to provide the full and unconditional guarantee by the Company set forth in the Guarantee. At December 31,
2015, the balance of this debt that GE assumed was $85.1 billion, and the Guarantee applied to approximately $85.8 billion of GE
Capital debt.
STATEMENT OF CASH FLOWS ± OVERVIEW FROM 2013 THROUGH 2015
CONSOLIDATED CASH FLOWS
We evaluate our cash flow performance by reviewing our industrial (non-GE Capital) businesses and GE Capital businesses
separately. Cash from operating activities (CFOA) is the principal source of cash generation for our industrial businesses. The industrial
businesses also have liquidity available via the public capital markets.
GE CASH FLOWS
(Dollars in billions)
OPERATING CASH FLOWS INVESTING CASH FLOWS FINANCING CASH FLOWS
2013 2014 2015 2013 2014 2015
With respect to GE CFOA, we believe that it is useful to supplement our GE Statement of Cash Flows and to examine in a broader
context the business activities that provide and require cash.
2013 2014 2015
82 GE 2015 FORM 10-K