GE 2015 Annual Report Download - page 217

FINANCIAL STATEMENTS FINANCIAL INSTRUMENTS
GE 2015 FORM 10-K 189
NOTE 20. FINANCIAL INSTRUMENTS
The following table provides information about assets and liabilities not carried at fair value. The table excludes finance leases and non-
financial assets and liabilities. Substantially all of the assets discussed below are considered to be Level 3. The vast majority of our
OLDELOLWLHV¶ fair value can be determined based on significant observable inputs and thus considered Level 2. For those instruments that
are not actively traded their fair values must often be determined using financial models. Realization of the fair value of these
instruments depends upon market forces beyond our control, including marketplace liquidity.
2015 2014
Assets
(
liabilities
)
Assets
(
liabilities
)
Carr
y
in
g
Carr
y
in
g
amoun
t
Estimated amoun
t
Estimated
December 31
(
In millions
)
(
net
)
fair value
(
net
)
fair value
GE
A
ssets
Investments and notes receivable $ 1,104 $ 1,174 $ 502 $ 551
Liabilities
Borrowings(a)(b) (18,455) (19,011) (16,340) (17,503)
Borrowings (debt assumed)(a)(c) (85,114) (92,641) - -
GE Capital
A
ssets
Loans 20,061 19,774 20,153 20,182
Time deposits(d) 10,386 10,386 - -
Other commercial mortgages 1,381 1,447 1,427 1,508
Loans held for sale 342 342 419 419
Other financial instruments(e) 94 110 103 113
Liabilities
Borrowings(a)(f)(g)(h) (95,681) (99,602) (245,993) (261,569)
Investment contracts (2,955) (3,441) (3,970) (4,596)
(a) See Note 10.
(b) Included $116 million and $94 million of accrued interest in estimated fair value at December 31, 2015 and December 31, 2014, respectively.
(c) Included $1,006 million of accrued interest in estimated fair value at December 31, 2015.
(d) Balances at December 31, 2015 included $10,386 million of high quality interest bearing deposits with European branches of global banks,
predominantly in the UK, that mature in April 2016.
(e) Principally comprises cost method investments.
(f) Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of
borrowings at December 31, 2015 and 2014 would have been reduced by $3,001 million and $5,020 million, respectively.
(g) Included $1,103 million and $2,888 million of accrued interest in estimated fair value at December 31, 2015 and 2014, respectively.
(h) Excluded $85,114 million of intercompany payable to GE related to the debt assumption at December 31, 2015.
A description of how we estimate fair values follows:
Loans. Based on a discounted future cash flows methodology, using current market interest rate data adjusted for inherent credit risk
or quoted market prices and recent transactions, if available.
Borrowings. Based on valuation methodologies using current market interest rate data that are comparable to market quotes adjusted
for our non-performance risk.
Investment contracts. Based on expected future cash flows, discounted at currently offered rates for immediate annuity contracts or
the income approach for single premium deferred annuities.
Time deposits. Carrying value approximates fair value as these financial instruments have limited credit risk, short-term maturities and
interest rates that approximate market.
All other instruments. Based on observable market transaction and/or valuation methodologies using current market interest rate data
adjusted for inherent credit risk.
GE 2015 FORM 10-K 189