GE 2015 Annual Report Download - page 225

FINANCIAL STATEMENTS
GE 2015 FORM 10-K 197
INVESTMENTS IN UNCONSOLIDATED VARIABLE INTEREST ENTITIES
Our involvement with unconsolidated VIEs consists of the following activities: assisting in the formation and financing of the entity;
providing recourse and/or liquidity support; servicing the assets; and receiving variable fees for services provided. We are not required
to consolidate these entities because the nature of our involvement with the activities of the VIEs does not give us power over decisions
that significantly affect their economic performance.
The classification of our variable interests in these entities in our financial statements is based on the nature of the entity and the
characteristics of the investment we hold.
INVESTMENTS IN UNCONSOLIDATED VIEs
December 31 (In millions) 2015 2014
Other assets and investment securities $ 745 $ 704
Financing receivables ± net 13 109
Total investments 758 813
Contractual obligations to fund investments, guarantees or revolving lines of credit 29 11
Total $ 787 $ 824
In addition to the entities included in the table above, we also hold passive investments in investment securities 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.
NOTE 22. COMMITMENTS, GUARANTEES AND PRODUCT WARRANTIES
COMMITMENTS
The GECAS business in Capital had placed multiple-year orders for various Boeing, Airbus and other aircraft manufacturers with list
prices approximating $27,115 million and secondary orders with airlines for used aircraft of approximately $766 million at December 31,
2015. In our Aviation segment, we had committed to provide financing assistance on $2,565 million of future customer acquisitions of
aircraft equipped with our engines, including commitments made to airlines in 2015 for future sales under our GE90 and GEnx engine
campaigns.
GUARANTEES
Our guarantees are provided in the ordinary course of business. We underwrite these guarantees considering economic, liquidity and
credit risk of the counterparty. We believe that the likelihood is remote that any such arrangements could have a significant adverse
effect on our financial position, results of operations or liquidity. We record liabilities for guarantees at estimated fair value, generally the
amount of the premium received, or if we do not receive a premium, the amount based on appraisal, observed market values or
discounted cash flows. Any associated expected recoveries from third parties are recorded as other receivables, not netted against the
liabilities.
At December 31, 2015, we were committed under the following guarantee arrangements beyond those provided on behalf of VIEs. See
Note 21.
Credit Support. We have provided $816 million of credit support on behalf of certain customers or associated companies,
predominantly joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees.
These arrangements enable these customers and associated companies to execute transactions or obtain desired financing
arrangements with third parties. Should the customer or associated company fail to perform under the terms of the transaction or
financing arrangement, we would be required to perform on their behalf. Under most such arrangements, our guarantee is secured,
usually by the asset being purchased or financed, or possibly by certain other assets of the customer or associated company. The
length of these credit support arrangements parallels the length of the related financing arrangements or transactions. The liability for
such credit support was $36 million at December 31, 2015.
COMMITMENTS, GUARANTEES AND PRODUCT WARRANTIES
GE 2015 FORM 10-K 197