geccform10q1q14.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, D.C. 20549
 
     
 
FORM 10-Q
  

(Mark One)
        
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 
THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2014
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ___________to ___________
_____________________________
 
Commission file number 001-06461
_____________________________
 
GENERAL ELECTRIC CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
  
13-1500700
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
     
901 Main Avenue, Norwalk, CT
  
06851-1168
(Address of principal executive offices)
  
(Zip Code)

(Registrant’s telephone number, including area code) (203) 840-6300

                                                                                              
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þNo ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer ¨ 
Accelerated filer ¨
Non-accelerated filer þ
Smaller reporting company ¨

 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
 
At May 1, 2014, 1,000 shares of voting common stock, which constitute all of the outstanding common equity, with a par value of $14 per share were outstanding.
 
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION h(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT.
 
 
 
(1)
 
 
 
General Electric Capital Corporation
 
PART I – FINANCIAL INFORMATION
  
Page
       
Item 1.
Financial Statements
    
 
Condensed Statement of Earnings
  
4
 
Condensed Statement of Comprehensive Income
  
5
 
Condensed Statement of Changes in Shareowners’ Equity
  
5
 
Condensed Statement of Financial Position
  
6
 
Condensed Statement of Cash Flows
  
7
 
Notes to Condensed Financial Statements (Unaudited)
  
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  
43
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
  
60
Item 4.
Controls and Procedures
  
60
       
PART II – OTHER INFORMATION
    
       
Item 1.
Legal Proceedings
  
61
Item 6.
Exhibits
  
62
Signatures
  
63
     

 
 
(2)
 
 
 
FORWARD-LOOKING STATEMENTS
 
This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, equity prices and the value of financial assets; potential market disruptions or other impacts arising in the United States or Europe from developments in sovereign debt situations; the impact of conditions in the financial and credit markets on the availability and cost of our funding and on our ability to reduce our asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage securitization claims and litigation in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; our ability to pay dividends to GE at the planned level, which may be affected by our cash flows and earnings, financial services regulation and oversight, and other factors; the level of demand and financial performance of the major industries GE serves, including, without limitation, air transportation, energy generation, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; our success in completing announced transactions and integrating acquired businesses; our ability to complete the staged exit from our North American Retail Finance business as planned; the impact of potential information technology or data security breaches; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
 
 
CORPORATE INFORMATION
 
GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.
 
 
(3)
 
 
 
PART I. FINANCIAL INFORMATION
 
 
ITEM 1. FINANCIAL STATEMENTS.
 
General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Earnings
(Unaudited)

 
 
 
 
 
 
 
Three months ended March 31
(In millions)
 
 
 
 
 
 
 
2014 
 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
Revenues from services (a)
 
 
 
 
 
 
$
 10,522 
 
$
 11,720 
Other-than-temporary impairment on investment securities:
 
 
 
 
 
 
 
 
 
 
 
   Total other-than-temporary impairment on investment securities
 
 
 
 
 
 
 
 (38)
 
 
 (289)
      Less: other-than-temporary impairment recognized in
 
 
 
 
 
 
 
 
 
 
 
         accumulated other comprehensive income
 
 
 
 
 
 
 
 4 
 
 
 11 
   Net other-than-temporary impairment on investment securities
 
 
 
 
 
 
 
 
 
 
 
      recognized in earnings
 
 
 
 
 
 
 
 (34)
 
 
 (278)
Revenues from services (Note 9)
 
 
 
 
 
 
 
 10,488 
 
 
 11,442 
Sales of goods
 
 
 
 
 
 
 
 27 
 
 
 26 
   Total revenues
 
 
 
 
 
 
 
 10,515 
 
 
 11,468 
 
 
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
Interest
 
 
 
 
 
 
 
 2,161 
 
 
 2,382 
Operating and administrative
 
 
 
 
 
 
 
 2,958 
 
 
 3,189 
Cost of goods sold
 
 
 
 
 
 
 
 25 
 
 
 21 
Investment contracts, insurance losses and insurance annuity benefits
 
 
 
 
 
 
 
 643 
 
 
 689 
Provision for losses on financing receivables
 
 
 
 
 
 
 
 970 
 
 
 1,457 
Depreciation and amortization
 
 
 
 
 
 
 
 1,616 
 
 
 1,697 
   Total costs and expenses
 
 
 
 
 
 
 
 8,373 
 
 
 9,435 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from continuing operations before income taxes
 
 
 
 
 
 
 
 2,142 
 
 
 2,033 
Benefit (provision) for income taxes
 
 
 
 
 
 
 
 (198)
 
 
 (84)
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from continuing operations
 
 
 
 
 
 
 
 1,944 
 
 
 1,949 
Earnings (loss) from discontinued operations, net of taxes (Note 2)
 
 
 
 
 
 
 
 12 
 
 
 (120)
Net earnings
 
 
 
 
 
 
 
 1,956 
 
 
 1,829 
Less: net earnings (loss) attributable to noncontrolling interests
 
 
 
 
 
 
 
 11 
 
 
 11 
Net earnings attributable to GECC
 
 
 
 
 
 
 
 1,945 
 
 
 1,818 
Preferred stock dividends declared
 
 
 
 
 
 
 
 - 
 
 
 - 
Net earnings attributable to GECC common shareowner
 
 
 
 
 
 
$
 1,945 
 
$
 1,818 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts attributable to GECC
 
 
 
 
 
 
 
 
 
 
 
Earnings from continuing operations
 
 
 
 
 
 
$
 1,933 
 
$
 1,938 
Earnings (loss) from discontinued operations, net of taxes
 
 
 
 
 
 
 
 12 
 
 
 (120)
Net earnings attributable to GECC
 
 
 
 
 
 
$
 1,945 
 
$
 1,818 
 
 
 
 
 
 
 
 
 
 
 
 
(a)  
Excluding net other-than-temporary impairment on investment securities.
 
See accompanying notes.
 
 
(4)
 
 
 
General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Comprehensive Income
(Unaudited)

 
 
 
Three months ended March 31
(In millions)
 
 
 
 
 
 
 
2014 
 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 
 
 
 
 
 
$
 1,956 
 
$
 1,829 
Less: net earnings (loss) attributable to noncontrolling interests
 
 
 
 
 
 
 
 11 
 
 
 11 
Net earnings attributable to GECC
 
 
 
 
 
 
$
 1,945 
 
$
 1,818 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
      Investment securities
 
 
 
 
 
 
$
 484 
 
$
 66 
      Currency translation adjustments
 
 
 
 
 
 
 
 (84)
 
 
 8 
      Cash flow hedges
 
 
 
 
 
 
 
 68 
 
 
 92 
      Benefit plans
 
 
 
 
 
 
 
 (18)
 
 
 13 
Other comprehensive income (loss)
 
 
 
 
 
 
 
 450 
 
 
 179 
Less: other comprehensive income (loss) attributable to
 
 
 
 
 
 
 
 
 
 
 
      noncontrolling interests
 
 
 
 
 
 
 
 2 
 
 
 (3)
Other comprehensive income (loss) attributable to GECC
 
 
 
 
 
 
$
 448 
 
$
 182 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income
 
 
 
 
 
 
$
 2,406 
 
$
 2,008 
Less: comprehensive income (loss) attributable to
 
 
 
 
 
 
 
 
 
 
 
      noncontrolling interests
 
 
 
 
 
 
 
 13 
 
 
 8 
Comprehensive income attributable to GECC
 
 
 
 
 
 
$
 2,393 
 
$
 2,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts presented net of taxes. See Note 8 for further information about other comprehensive income and noncontrolling interests.
 
See accompanying notes.
 

General Electric Capital Corporation and consolidated affiliates
 
 
 
 
 
 
Condensed Statement of Changes in Shareowners’ Equity
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31
(In millions)
 
 
 
 
 
 
 
2014 
 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
GECC shareowners' equity balance at January 1
 
 
 
 
 
 
$
 82,694 
 
$
 81,890 
Increases from net earnings attributable to GECC
 
 
 
 
 
 
 
 1,945 
 
 
 1,818 
Dividends and other transactions with shareowners
 
 
 
 
 
 
 
 (500)
 
 
 - 
Other comprehensive income (loss) attributable to GECC
 
 
 
 
 
 
 
 448 
 
 
 182 
Changes in additional paid-in capital
 
 
 
 
 
 
 
 - 
 
 
 (8)
Ending balance at March 31
 
 
 
 
 
 
 
 84,587 
 
 
 83,882 
Noncontrolling interests
 
 
 
 
 
 
 
 440 
 
 
 587 
Total equity balance at March 31
 
 
 
 
 
 
$
 85,027 
 
$
 84,469 
 
 
 
 
 
 
 
 
 
 
 
 
 
See Note 8 for further information about changes in shareowners’ equity.
 
See accompanying notes.
 
 
(5)
 
 
 
General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Financial Position
 
 
 
 
 
 
 
(In millions, except share information)
March 31, 2014
 
December 31, 2013
 
(Unaudited)
 
 
Assets
 
 
 
 
 
Cash and equivalents
$
 75,289 
 
$
 74,873 
Investment securities (Note 3)
 
 45,450 
 
 
 43,662 
Inventories
 
 62 
 
 
 68 
Financing receivables – net (Note 4)
 
 247,242 
 
 
 253,029 
Other receivables
 
 15,643 
 
 
 16,513 
Property, plant and equipment, less accumulated amortization of $27,023
 
 
 
 
 
   and $26,960
 
 50,489 
 
 
 51,607 
Goodwill (Note 5)
 
 26,336 
 
 
 26,195 
Other intangible assets – net (Note 5)
 
 1,275 
 
 
 1,136 
Other assets
 
 47,164 
 
 
 47,366 
Assets of businesses held for sale (Note 2)
 
 48 
 
 
 50 
Assets of discontinued operations (Note 2)
 
 1,449 
 
 
 2,330 
Total assets(a)
$
 510,447 
 
$
 516,829 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
Short-term borrowings (Note 6)
$
 75,102 
 
$
 77,298 
Accounts payable
 
 7,740 
 
 
 6,549 
Non-recourse borrowings of consolidated securitization entities (Note 6)
 
 28,724 
 
 
 30,124 
Bank deposits (Note 6)
 
 54,743 
 
 
 53,361 
Long-term borrowings (Note 6)
 
 206,654 
 
 
 210,279 
Investment contracts, insurance liabilities and insurance annuity benefits
 
 27,604 
 
 
 26,979 
Other liabilities
 
 18,773 
 
 
 20,531 
Deferred income taxes
 
 4,956 
 
 
 4,786 
Liabilities of businesses held for sale (Note 2)
 
 2 
 
 
 6 
Liabilities of discontinued operations (Note 2)
 
 1,122 
 
 
 3,790 
Total liabilities(a)
 
 425,420 
 
 
 433,703 
 
 
 
 
 
 
Preferred stock, $0.01 par value (750,000 shares authorized at both March 31, 2014
 
 
 
 
 
    and December 31, 2013, and 50,000 shares issued and outstanding
 
 - 
 
 
 - 
        at both March 31, 2014 and December 31, 2013)
 
 
 
 
 
Common stock, $14 par value (4,166,000 shares authorized at
 
 
 
 
 
    both March 31, 2014 and December 31, 2013 and 1,000 shares
 
 
 
 
 
        issued and outstanding at both March 31, 2014 and December 31, 2013)
 
 - 
 
 
 - 
Accumulated other comprehensive income (loss) – net(b)
 
 
 
 
 
   Investment securities
 
 793 
 
 
 309 
   Currency translation adjustments
 
 (773)
 
 
 (687)
   Cash flow hedges
 
 (225)
 
 
 (293)
   Benefit plans
 
 (381)
 
 
 (363)
Additional paid-in capital
 
 32,563 
 
 
 32,563 
Retained earnings
 
 52,610 
 
 
 51,165 
Total GECC shareowners' equity
 
 84,587 
 
 
 82,694 
Noncontrolling interests(c)(Note 8)
 
 440 
 
 
 432 
Total equity
 
 85,027 
 
 
 83,126 
Total liabilities and equity
$
 510,447 
 
$
 516,829 
 
 
 
 
 
 
(a)
Our consolidated assets at March 31, 2014 include total assets of $46,778 million of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs. These assets include net financing receivables of $40,749 million and investment securities of $3,797 million. Our consolidated liabilities at March 31, 2014 include liabilities of certain VIEs for which the VIE creditors do not have recourse to GECC. These liabilities include non-recourse borrowings of consolidated securitization entities (CSEs) of $27,175 million. See Note 12.
(b)
The sum of accumulated other comprehensive income (loss) (AOCI) attributable to GECC was $(586) million and $(1,034) million at March 31, 2014 and December 31, 2013, respectively.
(c)
Included AOCI attributable to noncontrolling interests of $(137) million and $(139) million at March 31, 2014 and December 31, 2013, respectively.
 
See accompanying notes.
 
 
(6)
 
 
 
General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Cash Flows
(Unaudited)
 
 
 
 
 
Three months ended March 31
(In millions)
 
 
 
 
2014 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows – operating activities
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 
 
 
 
 
 
$
 1,956 
 
$
 1,829 
Less: net earnings (loss) attributable to noncontrolling interests
 
 
 
 
 
 
 
 11 
 
 
 11 
Net earnings attributable to GECC
 
 
 
 
 
 
 
 1,945 
 
 
 1,818 
(Earnings) loss from discontinued operations
 
 
 
 
 
 
 
 (12)
 
 
 120 
Adjustments to reconcile net earnings attributable to GECC
 
 
 
 
 
 
 
 
 
 
 
   to cash provided from operating activities
 
 
 
 
 
 
 
 
 
 
 
      Depreciation and amortization of property, plant and equipment
 
 
 
 
 
 
 
 1,616 
 
 
 1,697 
      Deferred income taxes
 
 
 
 
 
 
 
 (1,623)
 
 
 251 
      Increase in accounts payable
 
 
 
 
 
 
 
 887 
 
 
 614 
      Provision for losses on financing receivables
 
 
 
 
 
 
 
 970 
 
 
 1,457 
      All other operating activities
 
 
 
 
 
 
 
 (625)
 
 
 (2,803)
Cash from (used for) operating activities – continuing operations
 
 
 
 
 
 
 
 3,158 
 
 
 3,154 
Cash from (used for) operating activities – discontinued operations
 
 
 
 
 
 
 
 (3)
 
 
 (99)
Cash from (used for) operating activities
 
 
 
 
 
 
 
 3,155 
 
 
 3,055 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows – investing activities
 
 
 
 
 
 
 
 
 
 
 
Additions to property, plant and equipment
 
 
 
 
 
 
 
 (2,361)
 
 
 (2,696)
Dispositions of property, plant and equipment
 
 
 
 
 
 
 
 1,192 
 
 
 829 
Increase in loans to customers
 
 
 
 
 
 
 
 (70,938)
 
 
 (69,664)
Principal collections from customers – loans
 
 
 
 
 
 
 
 72,135 
 
 
 73,366 
Investment in equipment for financing leases
 
 
 
 
 
 
 
 (1,861)
 
 
 (1,899)
Principal collections from customers – financing leases
 
 
 
 
 
 
 
 2,324 
 
 
 3,015 
Net change in credit card receivables
 
 
 
 
 
 
 
 2,323 
 
 
 1,508 
Proceeds from sales of discontinued operations
 
 
 
 
 
 
 
 232 
 
 
 - 
Proceeds from principal business dispositions
 
 
 
 
 
 
 
 - 
 
 
 161 
Net cash from (payments for) principal businesses purchased
 
 
 
 
 
 
 
 - 
 
 
 6,392 
All other investing activities
 
 
 
 
 
 
 
 3,009 
 
 
 6,226 
Cash from (used for) investing activities – continuing operations
 
 
 
 
 
 
 
 6,055 
 
 
 17,238 
Cash from (used for) investing activities – discontinued operations
 
 
 
 
 
 
 
 (90)
 
 
 81 
Cash from (used for) investing activities
 
 
 
 
 
 
 
 5,965 
 
 
 17,319 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows – financing activities
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in borrowings (maturities of 90 days or less)
 
 
 
 
 
 
 
 (3,750)
 
 
 (9,457)
Net increase (decrease) in bank deposits
 
 
 
 
 
 
 
 1,175 
 
 
 (3,237)
Newly issued debt (maturities longer than 90 days)
 
 
 
 
 
 
 
 5,743 
 
 
 17,430 
Repayments and other debt reductions (maturities longer than 90 days)
 
 
 
 
 
 
 
 (11,566)
 
 
 (18,452)
Dividends paid to shareowners
 
 
 
 
 
 
 
 (500)
 
 
 - 
All other financing activities
 
 
 
 
 
 
 
 9 
 
 
 (166)
Cash from (used for) financing activities – continuing operations
 
 
 
 
 
 
 
 (8,889)
 
 
 (13,882)
Cash from (used for) financing activities – discontinued operations
 
 
 
 
 
 
 
 (6)
 
 
 (15)
Cash from (used for) financing activities
 
 
 
 
 
 
 
 (8,895)
 
 
 (13,897)
 
 
 
 
 
 
 
 
 
 
 
 
Effect of currency exchange rate changes on cash and equivalents
 
 
 
 
 
 
 
 92 
 
 
 (697)
 
 
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in cash and equivalents
 
 
 
 
 
 
 
 317 
 
 
 5,780 
Cash and equivalents at beginning of year
 
 
 
 
 
 
 
 75,105 
 
 
 62,044 
Cash and equivalents at March 31
 
 
 
 
 
 
 
 75,422 
 
 
 67,824 
Less: cash and equivalents of discontinued operations at March 31
 
 
 
 
 
 
 
 133 
 
 
 158 
Cash and equivalents of continuing operations at March 31
 
 
 
 
 
 
$
 75,289 
 
$
 67,666 
 
 
 
 
 
 
 
 
 
 
 
 

See accompanying notes.
 
 
(7)
 
 
 
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
General Electric Company (GE Company or GE) owns all of the common stock of General Electric Capital Corporation (GECC). Our financial statements consolidate all of our affiliates – companies that we control and in which we hold a majority voting interest. We also consolidate the economic interests we hold in certain businesses within companies in which we hold a voting equity interest and are majority owned by our parent, but which we have agreed to actively manage and control. See Note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (2013 consolidated financial statements), which discusses our consolidation and financial statement presentation. GECC includes Commercial Lending and Leasing (CLL), Consumer, Real Estate, Energy Financial Services and GE Capital Aviation Services (GECAS).

Effects of transactions between related companies are made on an arms-length basis and are eliminated. As a wholly-owned subsidiary, GECC enters into various operating and financing arrangements with its parent, GE. These arrangements are made on an arms-length basis and consist primarily of GECC dividends to GE; GE customer receivables sold to GECC; GECC services for trade receivables management and material procurement; buildings and equipment (including automobiles) leased between GE and GECC; information technology (IT) and other services sold to GECC by GE; aircraft engines manufactured by GE that are installed on aircraft purchased by GECC from third-party producers for lease to others; and various investments, loans and allocations of GE corporate costs.

We have reclassified certain prior-period amounts to conform to the current-period presentation. Unless otherwise indicated, information in these notes to the condensed, consolidated financial statements relates to continuing operations.

Interim Period Presentation
 
The condensed, consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed, consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. It is suggested that these condensed, consolidated financial statements be read in conjunction with the financial statements and notes thereto included in our 2013 consolidated financial statements. We label our quarterly information using a calendar convention, that is, first quarter is labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is our longstanding practice to establish interim quarterly closing dates using a fiscal calendar, which requires our businesses to close their books on either a Saturday or Sunday, depending on the business. The effects of this practice are modest and only exist within a reporting year. The fiscal closing calendar for 2014 is available on our website, www.ge.com/secreports.

Summary of Significant Accounting Policies
 
See the Notes in our 2013 consolidated financial statements for a summary of our significant accounting policies.

Accounting Changes
 
On January 1, 2014, we adopted Accounting Standards Update (ASU) 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. Under the revised guidance, the entire amount of the cumulative translation adjustment associated with the foreign entity will be released into earnings in the following circumstances: (a) the sale of a subsidiary or group of net assets within a foreign entity that represents a complete or substantially complete liquidation of that entity, (b) the loss of a controlling financial interest in an investment in a foreign entity, or (c) when the accounting for an investment in a foreign entity changes from the equity method to full consolidation. The revised guidance applies prospectively to transactions or events occurring on or after January 1, 2014.
 
 
(8)
 
 
 
On January 1, 2014, we adopted ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.  Under the new guidance, an unrecognized tax benefit is required to be presented as a reduction to a deferred tax asset if the disallowance of the tax position would reduce the available tax loss or tax credit carryforward instead of resulting in a cash tax liability. The ASU applies prospectively to all unrecognized tax benefits that exist as of the adoption date and reduced both deferred tax assets and income tax liabilities by $1,009 million as of January 1, 2014.


2. ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS
 
Assets and Liabilities of Businesses Held for Sale
 
In the first quarter of 2013, we committed to sell our Consumer auto and personal loan business in Portugal and completed the sale on July 15, 2013 for proceeds of $83 million.

Discontinued Operations
 
Discontinued operations primarily comprised GE Money Japan (our Japanese personal loan business, Lake, and our Japanese mortgage and card businesses, excluding our investment in GE Nissen Credit Co., Ltd.), our U.S. mortgage business (WMC), our Commercial Lending and Leasing (CLL) trailer services business in Europe (CLL Trailer Services) and our Consumer banking business in Russia (Consumer Russia). Results of operations, financial position and cash flows for these businesses are separately reported as discontinued operations for all periods presented.

Financial Information for Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31
(In millions)
 
 
 
 
 
 
2014 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
Operations
 
 
 
 
 
 
 
 
 
 
 
Total revenues (loss)
 
 
 
 
 
 
$
 29 
 
$
 54 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from discontinued operations
 
 
 
 
 
 
 
 
 
 
 
    before income taxes
 
 
 
 
 
 
$
 (14)
 
$
 (142)
Benefit (provision) for income taxes
 
 
 
 
 
 
 
 7 
 
 
 124 
Earnings (loss) from discontinued operations,
 
 
 
 
 
 
 
 
 
 
 
   net of taxes
 
 
 
 
 
 
$
 (7)
 
$
 (18)
 
 
 
 
 
 
 
 
 
 
 
 
Disposal
 
 
 
 
 
 
 
 
 
 
 
Gain (loss) on disposal before income taxes
 
 
 
 
 
 
$
 18 
 
$
 (187)
Benefit (provision) for income taxes
 
 
 
 
 
 
 
 1 
 
 
 85 
Gain (loss) on disposal, net of taxes
 
 
 
 
 
 
$
 19 
 
$
 (102)
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from discontinued operations,
 
 
 
 
 
 
 
 
 
 
 
   net of taxes
 
 
 
 
 
 
$
 12 
 
$
 (120)
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
 
 
March 31, 2014
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
 
 
 
 
 
 
$
 133 
 
$
 232 
Financing receivables – net
 
 
 
 
 
 
 
 1 
 
 
 711 
Other
 
 
 
 
 
 
 
 1,315 
 
 
 1,387 
Assets of discontinued operations
 
 
 
 
 
 
$
 1,449 
 
$
 2,330 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes
 
 
 
 
 
 
$
 260 
 
$
 250 
Other
 
 
 
 
 
 
 
 862 
 
 
 3,540 
Liabilities of discontinued operations
 
 
 
 
 
 
$
 1,122 
 
$
 3,790 
 
 
 
 
 
 
 
 
 
 
 
 

Other assets at March 31, 2014 and December 31, 2013 primarily comprised a deferred tax asset for a loss carryforward, which expires principally in 2017 and in part in 2019, related to the sale of our GE Money Japan business.
 
 
(9)
 
 
 
GE Money Japan
 
During the third quarter of 2008, we completed the sale of GE Money Japan, which included our Japanese personal loan business. Under the terms of the sale, we reduced the proceeds from the sale for estimated refund claims in excess of the statutory interest rate. Proceeds from the sale were to be increased or decreased based on the actual claims experienced in accordance with loss-sharing terms specified in the sale agreement, with all claims in excess of 258 billion Japanese yen (approximately $3,000 million) remaining our responsibility. On February 26, 2014, we reached an agreement with the buyer to pay 175 billion Japanese yen (approximately $1,700 million) to extinguish this obligation. Our reserve for refund claims decreased from $1,836 million at December 31, 2013 to $56 million at March 31, 2014, reflecting payment in March 2014 of the amount required by the February 26, 2014 agreement. The $56 million liability reflects the final remaining amount payable under the February 26, 2014 agreement.

GE Money Japan earnings (loss) from discontinued operations, net of taxes, were $(1) million and $(51) million in the three months ended March 31, 2014 and 2013, respectively.

WMC
 
During the fourth quarter of 2007, we completed the sale of WMC, our U.S. mortgage business. WMC substantially discontinued all new loan originations by the second quarter of 2007, and is not a loan servicer. In connection with the sale, WMC retained certain representation and warranty obligations related to loans sold to third parties prior to the disposal of the business and contractual obligations to repurchase previously sold loans that had an early payment default. All claims received by WMC for early payment default have either been resolved or are no longer being pursued.

The remaining active claims have been brought by securitization trustees or administrators seeking recovery from WMC for alleged breaches of representations and warranties on mortgage loans that serve as collateral for residential mortgage-backed securities (RMBS). At March 31, 2014, such claims consisted of $4,466 million of individual claims generally submitted before the filing of a lawsuit (compared to $5,643 million at December 31, 2013) and $6,989 million of additional claims asserted against WMC in litigation without making a prior claim (Litigation Claims) (compared to $6,780 at December 31, 2013). The total amount of these claims, $11,455 million, reflects the purchase price or unpaid principal balances of the loans at the time of purchase and does not give effect to pay downs or potential recoveries based upon the underlying collateral, which in many cases are substantial, nor to accrued interest or fees. As of March 31, 2014, these amounts do not include approximately $700 million of repurchase claims relating to alleged breaches of representations that are not in litigation and that are beyond the applicable statute of limitations. WMC believes that repurchase claims brought based upon representations and warranties made more than six years before WMC was notified of the claim would be disallowed in legal proceedings under applicable statutes of limitations.

Reserves related to repurchase claims made against WMC were $550 million at March 31, 2014, reflecting a net decrease to reserves in the quarter ended March 31, 2014 of $250 million due to settlement activity. The reserve estimate takes into account recent settlement activity that reduced WMC's exposure on certain claims and is based upon WMC’s evaluation of the remaining exposures as a percentage of estimated mortgage loan losses within the pool of loans supporting each securitization. Recent settlements reduced WMC’s exposure on claims asserted in certain securitizations and the claim amounts reported above give effect to these settlements.
 
(10)
 
 
 
Rollforward of the Reserve
 
 
Three months ended March 31
(In millions)
2014 
 
 
2013 
 
 
 
 
 
 
Balance, beginning of period
$
 800 
 
$
 633 
Provision
 
 - 
 
 
 107 
Claim resolutions
 
 (250)
 
 
 - 
Balance, end of period
$
 550 
 
$
 740 
 
 
 
 
 
 

Given the significant recent claim and related litigation activity and WMC’s continuing efforts to resolve the lawsuits involving claims made against WMC, it is difficult to assess whether future losses will be consistent with WMC’s past experience. Adverse changes to WMC’s assumptions supporting the reserve may result in an increase to these reserves. Taking into account both recent settlement activity and the potential variability of settlements, WMC estimates a range of reasonably possible loss from $0 to approximately $500 million over its recorded reserve at March 31, 2014. This estimate excludes any possible loss associated with an adverse court decision on the applicable statute of limitations, as WMC is unable at this time to develop such a meaningful estimate.

At March 31, 2014, there were 14 lawsuits involving claims made against WMC arising from alleged breaches of representations and warranties on mortgage loans included in 13 securitizations. The adverse parties in these cases are securitization trustees or parties claiming to act on their behalf. Although the alleged claims for relief vary from case to case, the complaints and counterclaims in these actions generally assert claims for breach of contract, indemnification, and/or declaratory judgment, and seek specific performance (repurchase of defective mortgage loan) and/or money damages. Adverse court decisions, including in cases not involving WMC, could result in new claims and lawsuits on additional loans. However, WMC continues to believe that it has defenses to the claims asserted in litigation, including, for example, based on causation and materiality requirements and applicable statutes of limitations. It is not possible to predict the outcome or impact of these defenses and other factors, any of which could materially affect the amount of any loss ultimately incurred by WMC on these claims.

WMC has also received indemnification demands, nearly all of which are unspecified, from depositors/underwriters/sponsors of RMBS in connection with lawsuits brought by RMBS investors concerning alleged misrepresentations in the securitization offering documents to which WMC is not a party. WMC believes that it has defenses to these demands.

To the extent WMC is required to repurchase loans, WMC’s loss also would be affected by several factors, including pay downs, accrued interest and fees, and the value of the underlying collateral. The reserve and estimate of possible loss reflect judgment, based on currently available information, and a number of assumptions, including economic conditions, claim and settlement activity, pending and threatened litigation, court decisions regarding WMC’s legal defenses, indemnification demands, government activity, and other variables in the mortgage industry. Actual losses arising from claims against WMC could exceed these amounts and additional claims and lawsuits could result if actual claim rates, governmental actions, litigation and indemnification activity, adverse court decisions, actual settlement rates or losses WMC incurs on repurchased loans differ from its assumptions.

WMC revenues (loss) from discontinued operations were $4 million and $(107) million in the three months ended March 31, 2014 and 2013, respectively. WMC earnings (loss) from discontinued operations, net of taxes, were $(2) million and $(71) million in the three months ended March 31, 2014 and 2013, respectively.

Other
 
In the fourth quarter of 2013, we announced the planned disposition of Consumer Russia and classified the business as discontinued operations. At that time, we recorded a $170 million loss on the planned disposal. We completed the sale in the first quarter of 2014 for proceeds of $232 million. Consumer Russia revenues from discontinued operations were $24 million and $67 million in the three months ended March 31, 2014 and 2013, respectively. Consumer Russia earnings (loss) from discontinued operations, net of taxes, were $1 million (including a $4 million gain on disposal) and $(11) million in the three months ended March 31, 2014 and 2013, respectively.
 
 
(11)
 
 
 
In the first quarter of 2013, we announced the planned disposition of CLL Trailer Services and classified the business as discontinued operations. We completed the sale in the fourth quarter of 2013 for proceeds of $528 million. CLL Trailer Services revenues from discontinued operations were $1 million and $93 million in the three months ended March 31, 2014 and 2013, respectively. CLL Trailer Services earnings (loss) from discontinued operations, net of taxes, were $13 million and $14 million in the three months ended March 31, 2014 and 2013, respectively.


3. INVESTMENT SECURITIES
 
Substantially all of our investment securities are classified as available-for-sale. These comprise mainly investment-grade debt securities supporting obligations to annuitants, policyholders in our run-off insurance operations and supporting obligations to holders of guaranteed investment contracts (GICs) in Trinity and investments held in our CLL business collateralized by senior secured loans of high-quality, middle-market companies in a variety of industries. We do not have any securities classified as held-to-maturity.

 
March 31, 2014
 
December 31, 2013
 
 
 
Gross
 
Gross
 
 
 
 
 
Gross
 
Gross
 
 
 
Amortized
 
unrealized
 
unrealized
 
Estimated
 
Amortized
 
unrealized
 
unrealized
 
Estimated
(In millions)
cost
 
gains
 
losses
 
fair value
 
cost
 
gains
 
losses
 
fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   U.S. corporate
$
 19,711 
 
$
 3,088 
 
$
 (138)
 
$
 22,661 
 
$
 19,600 
 
$
 2,323 
 
$
 (217)
 
$
 21,706 
   State and municipal
 
 5,115 
 
 
 409 
 
 
 (130)
 
 
 5,394 
 
 
 4,245 
 
 
 235 
 
 
 (191)
 
 
 4,289 
   Residential mortgage-backed(a)
 
 1,770 
 
 
 143 
 
 
 (39)
 
 
 1,874 
 
 
 1,819 
 
 
 139 
 
 
 (48)
 
 
 1,910 
   Commercial mortgage-backed
 
 2,986 
 
 
 198 
 
 
 (61)
 
 
 3,123 
 
 
 2,929 
 
 
 188 
 
 
 (82)
 
 
 3,035 
   Asset-backed
 
 7,347 
 
 
 32 
 
 
 (41)
 
 
 7,338 
 
 
 7,373 
 
 
 60 
 
 
 (46)
 
 
 7,387 
   Corporate – non-U.S.
 
 1,716 
 
 
 137 
 
 
 (64)
 
 
 1,789 
 
 
 1,741 
 
 
 103 
 
 
 (86)
 
 
 1,758 
   Government – non-U.S.
 
 2,058 
 
 
 103 
 
 
 (3)
 
 
 2,158 
 
 
 2,336 
 
 
 81 
 
 
 (7)
 
 
 2,410 
   U.S. government and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        federal agency
 
 707 
 
 
 48 
 
 
 (18)
 
 
 737 
 
 
 752 
 
 
 45 
 
 
 (27)
 
 
 770 
Retained interests
 
 64 
 
 
 11 
 
 
 - 
 
 
 75 
 
 
 64 
 
 
 8 
 
 
 - 
 
 
 72 
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Available-for-sale
 
 195 
 
 
 46 
 
 
 (8)
 
 
 233 
 
 
 203 
 
 
 51 
 
 
 (3)
 
 
 251 
   Trading
 
 68 
 
 
 - 
 
 
 - 
 
 
 68 
 
 
 74 
 
 
 - 
 
 
 - 
 
 
 74 
Total
$
 41,737 
 
$
 4,215 
 
$
 (502)
 
$
 45,450 
 
$
 41,136 
 
$
 3,233 
 
$
 (707)
 
$
 43,662 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)  
Substantially collateralized by U.S. mortgages. At March 31, 2014, $1,225 million relates to securities issued by government-sponsored entities and $649 million relates to securities of private-label issuers. Securities issued by private-label issuers are collateralized primarily by pools of individual direct mortgage loans of financial institutions.
 
 
(12)
 
 
 
Estimated Fair Value and Gross Unrealized Losses of Available-for-Sale Investment Securities

 
In loss position for
 
 
Less than 12 months
 
12 months or more
 
 
 
 
Gross
 
 
 
Gross
 
 
Estimated
unrealized
 
Estimated
unrealized
 
(In millions)
fair value
losses
(a)
fair value
losses
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
 
 
 
 
 
 
   U.S. corporate
$
 1,578 
 
$
 (63)
 
$
 563 
 
$
 (75)
 
   State and municipal
 
 942 
 
 
 (37)
 
 
 347 
 
 
 (93)
 
   Residential mortgage-backed
 
 187 
 
 
 (6)
 
 
 430 
 
 
 (33)
 
   Commercial mortgage-backed
 
 254 
 
 
 (11)
 
 
 803 
 
 
 (50)
 
   Asset-backed
 
 101 
 
 
 (1)
 
 
 294 
 
 
 (40)
 
   Corporate – non-U.S.
 
 43 
 
 
 (1)
 
 
 430 
 
 
 (63)
 
   Government – non-U.S.
 
 1,098 
 
 
 (3)
 
 
 52 
 
 
 - 
 
   U.S. government and federal agency
 
 238 
 
 
 (18)
 
 
 - 
 
 
 - 
 
Retained interests
 
 1 
 
 
 - 
 
 
 1 
 
 
 - 
 
Equity
 
 40 
 
 
 (8)
 
 
 - 
 
 
 - 
 
Total
$
 4,482 
 
$
 (148)
 
$
 2,920 
 
$
 (354)
(b)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
 
 
 
 
 
 
   U.S. corporate
$
 2,170 
 
$
 (122)
 
$
 598 
 
$
 (95)
 
   State and municipal
 
 1,076 
 
 
 (82)
 
 
 367 
 
 
 (109)
 
   Residential mortgage-backed
 
 232 
 
 
 (11)
 
 
 430 
 
 
 (37)
 
   Commercial mortgage-backed
 
 396 
 
 
 (24)
 
 
 780 
 
 
 (58)
 
   Asset-backed
 
 112 
 
 
 (2)
 
 
 359 
 
 
 (44)
 
   Corporate – non-U.S.
 
 96 
 
 
 (3)
 
 
 454 
 
 
 (83)
 
   Government – non-U.S.
 
 1,479 
 
 
 (6)
 
 
 42 
 
 
 (1)
 
   U.S. government and federal agency
 
 229 
 
 
 (27)
 
 
 254 
 
 
 - 
 
Retained interests
 
 2 
 
 
 - 
 
 
 - 
 
 
 - 
 
Equity
 
 31 
 
 
 (3)
 
 
 - 
 
 
 - 
 
Total
$
 5,823 
 
$
 (280)
 
$
 3,284 
 
$
 (427)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)  
Includes gross unrealized losses related to securities that had other-than-temporary impairments previously recognized of $(85) million at March 31, 2014.
(b)  
The majority relate to debt securities held to support obligations to holders of GICs and more than 70% are debt securities that were considered to be investment-grade by the major rating agencies at March 31, 2014.  
 
 
We regularly review investment securities for other-than-temporary impairment (OTTI) using both qualitative and quantitative criteria. For debt securities, our qualitative review considers our ability and intent to hold the security and the financial condition of and near-term prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. Our quantitative review considers whether there has been an adverse change in expected future cash flows. Unrealized losses are not indicative of the amount of credit loss that would be recognized and at March 31, 2014 are primarily due to increases in market yields subsequent to our purchase of the securities. We presently do not intend to sell the vast majority of our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell the vast majority of these securities before anticipated recovery of our amortized cost. The methodologies and significant inputs used to measure the amount of credit loss for our investment securities during the three months ended March 31, 2014 have not changed. For equity securities, we consider the duration and the severity of the unrealized loss. We believe that the unrealized loss associated with our equity securities will be recovered within the foreseeable future.
 
Our corporate debt portfolio comprises securities issued by public and private corporations in various industries, primarily in the U.S. Substantially all of our corporate debt securities are rated investment grade by the major rating agencies.
 
 
(13)
 
 
 
Our RMBS portfolio is collateralized primarily by pools of individual, direct mortgage loans, of which substantially all are in a senior position in the capital structure of the deals, not other structured products such as collateralized debt obligations. Of the total RMBS held at March 31, 2014, $1,225 million and $649 million related to agency and non-agency securities, respectively. Additionally, $355 million was related to residential subprime credit securities, primarily supporting our guaranteed investment contracts. Substantially all of the subprime exposure is related to securities backed by mortgage loans originated in 2006 and prior. A majority of subprime RMBS have been downgraded to below investment grade and are insured by Monoline insurers (Monolines). We continue to place partial reliance on Monolines with adequate capital and claims paying resources depending on the extent of the Monoline’s anticipated ability to cover expected credit losses.
 
Our commercial mortgage-backed securities (CMBS) portfolio is collateralized by both diversified pools of mortgages that were originated for securitization (conduit CMBS) and pools of large loans backed by high-quality properties (large loan CMBS), a majority of which were originated in 2007 and prior. The vast majority of the securities in our CMBS portfolio have investment-grade credit ratings.
 
Our asset-backed securities (ABS) portfolio is collateralized by senior secured loans of high-quality, middle-market companies in a variety of industries, as well as a variety of diversified pools of assets such as student loans and credit cards. The vast majority of the securities in our ABS portfolio are in a senior position in the capital structure of the deals.
 
Pre-tax, Other-Than-Temporary Impairments on Investment Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        
 
Three months ended March 31
(In millions)
 
  
 
 
 
2014 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
Total pre-tax, OTTI recognized
 
 
 
 
 
 
$
 38 
 
$
 289 
Less: pre-tax, OTTI recognized in AOCI
 
 
 
 
 
 
 
 (4)
 
 
 (11)
Pre-tax, OTTI recognized in earnings(a)
 
 
 
 
 
 
$
 34 
 
$
 278 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Included pre-tax, other-than-temporary impairments recorded in earnings related to equity securities of $1 million during both the three months ended March 31, 2014 and 2013.
 
Changes in Cumulative Credit Loss Impairments Recognized on Debt Securities Still Held
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        
 
Three months ended March 31
(In millions)
 
  
 
 
 
2014 
 
2013 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative credit loss impairments recognized,
    beginning of period
 
 
 
 
 
 
$
 1,025 
 
$
 420 
Credit loss impairments recognized on
   securities not previously impaired
 
 
 
 
 
 
 
 - 
 
 
 263 
Incremental credit loss impairments recognized on
   securities previously impaired
 
 
 
 
 
 
 
 29 
 
 
 12 
Less: credit loss impairments previously recognized
   on securities sold during the period
 
 
 
 
 
 
 
 (51)
 
 
 (1)
Cumulative credit loss impairments recognized,
    end of period
 
 
 
 
 
 
$
 1,003 
 
$
 694 
 
 
(14)
 
 
 
Contractual Maturities of Investment in Available-for-Sale Debt Securities
(Excluding Mortgage-Backed and Asset-Backed Securities)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortized
 
Estimated
(In millions)
 
 
 
 
 
 
cost
 
fair value
 
 
 
 
 
 
 
 
 
 
 
 
Due
 
 
 
 
 
 
 
 
 
 
 
    Within one year
 
 
 
 
 
 
$
1,838 
 
$
1,845 
    After one year through five years
 
 
 
 
 
 
 
3,630 
 
 
3,892 
    After five years through ten years
 
 
 
 
 
 
 
5,349 
 
 
5,641 
    After ten years
 
 
 
 
 
 
 
18,490 
 
 
21,361