GE 2015 Annual Report Download - page 216

FINANCIAL STATEMENTS FAIR VALUE MEASUREMENTS
188 GE 2015 FORM 10-K
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS
Range
(Dollars in millions) Fair value Valuation technique Unobservable inputs (weighted average)
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December 31, 2015
Recurring fair value measurements
Investment securities ± Debt
U.S. corporate $ 834 Income approach Discount rate(a) 1.7%-14.1% (8.6%)
Mortgage and asset-backed 31 Income approach Discount rate(a) 5.0%-12.0% (10.5%)
Corporate ± non-U.S. 236 Income approach Discount rate(a) 6.5%-14.0% (7.5%)
Other financial assets 259 Income approach, EBITDA multiple 6.1X-15.0X (9.9X)
Market comparables Capitalization rate 7.8%-7.8% (7.8%)
Non-recurring fair value measurements
Financing receivables and $ 146 Income approach Discount rate(a) 6.5%-30.0% (10.7%)
financing receivables held for sale
Cost and equity method investments 293 Income approach Discount rate(a) 9.5%-35.0% (14.4%)
Long-lived assets 830 Income approach Discount rate(a) 1.8%-11.7% (10.5%)
December 31, 2014
Recurring fair value measurements
Investment securities ± Debt
U.S. corporate $ 917 Income approach Discount rate(a) 1.5%-14.8% (6.6%)
State and municipal 17 Income approach Discount rate(a) 4.9%-4.9% (4.9%)
Mortgage and asset-backed 102 Income approach Discount rate(a) 4.3%-9.0% (5.6%)
Corporate ± non-U.S. 278 Income approach Discount rate(a) 3.3%-14.0% (6.5%)
Other financial assets 117 Income approach, EBITDA multiple 5.4X-9.1X (7.7X)
Market comparables Capitalization rate 6.5%-7.8% (7.7%)
Non-recurrin
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fair value measurements
Cost and equity method investments $ 309 Income approach, Discount rate(a) 8.0%-10.0% (9.4%)
Market comparables EBITDA multiple 1.8X-5.2X (4.8X)
Long-lived assets 664 Income approach Discount rate(a) 2.0%-10.8% (6.7%)
(a) Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk.
An increase in the discount rate would result in a decrease in the fair value.
At December 31, 2015 and 2014, other Level 3 recurring fair value measurements of $2,637 million and $2,532 million, respectively,
and non-recurring measurements of $122 million and $55 million, respectively, are valued using non-binding broker quotes or other
third-party sources. At December 31, 2015 and 2014, other recurring fair value measurements of $32 million and $203 million,
respectively, and non-recurring fair value measurements of $80 million and $16 million, respectively, were individually insignificant and
utilize a number of different unobservable inputs not subject to meaningful aggregation.
188 GE 2015 FORM 10-K