geccform10q06302013.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 June 30, 2013
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 July 26, 2013, 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
  
3
 
Condensed Statement of Comprehensive Income
  
4
 
Condensed Statement of Changes in Shareowners’ Equity
  
4
 
Condensed Statement of Financial Position
  
5
 
Condensed Statement of Cash Flows
  
6
 
Summary of Operating Segments
  
7
 
Notes to Condensed Financial Statements (Unaudited)
  
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  
51
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
  
72
Item 4.
Controls and Procedures
  
72
       
Part II – Other Information
    
       
Item 1.
Legal Proceedings
  
72
Item 6.
Exhibits
  
74
Signatures
  
75
     
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; changes in Japanese consumer behavior that may affect our estimates of liability for excess interest refund claims (GE Money Japan); 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; 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; 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.
 
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.

 
(2)
 

Part I. Financial Information
 
Item 1. Financial Statements
 
General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Earnings
(Unaudited)

   
Three months ended June 30,
  
Six months ended June 30,
(In millions)
    
2013
    
2012
    
2013
    
2012
                         
Revenues
                        
Revenues from services (a)
  
$
11,082
  
$
11,360
  
$
22,869
  
$
22,702
Other-than-temporary impairment on investment securities:
                        
   Total other-than-temporary impairment on investment securities
    
(152)
    
(33)
    
(441)
    
(65)
      Less: portion of other-than-temporary impairment recognized in
                        
         accumulated other comprehensive income
    
19
    
1
    
30
    
1
   Net other-than-temporary impairment on investment securities
                        
      recognized in earnings
    
(133)
    
(32)
    
(411)
    
(64)
Revenues from services (Note 9)
    
10,949
    
11,328
    
22,458
    
22,638
Sales of goods
    
31
    
26
    
57
    
56
   Total revenues
    
10,980
    
11,354
    
22,515
    
22,694
                         
Costs and expenses
                        
Interest
    
2,405
    
2,979
    
4,805
    
6,164
Operating and administrative
    
3,136
    
3,031
    
6,355
    
5,876
Cost of goods sold
    
25
    
23
    
46
    
48
Investment contracts, insurance losses and insurance annuity benefits
    
728
    
702
    
1,417
    
1,473
Provision for losses on financing receivables
    
1,029
    
743
    
2,517
    
1,606
Depreciation and amortization
    
1,707
    
1,636
    
3,405
    
3,288
   Total costs and expenses
    
9,030
    
9,114
    
18,545
    
18,455
                         
Earnings from continuing operations before income taxes
    
1,950
    
2,240
    
3,970
    
4,239
Benefit (provision) for income taxes
    
(11)
    
(104)
    
(93)
    
(319)
                         
Earnings from continuing operations
    
1,939
    
2,136
    
3,877
    
3,920
Earnings (loss) from discontinued operations, net of taxes (Note 2)
    
(121)
    
(553)
    
(230)
    
(750)
Net earnings
    
1,818
    
1,583
    
3,647
    
3,170
Less: net earnings (loss) attributable to noncontrolling interests
    
17
    
14
    
28
    
26
Net earnings attributable to GECC
    
1,801
    
1,569
    
3,619
    
3,144
Preferred stock dividends declared
    
(135)
    
– 
    
(135)
    
– 
Net earnings attributable to GECC common shareowner
  
$
1,666
  
$
1,569
  
$
3,484
  
$
3,144
                         
Amounts attributable to GECC
                        
Earnings from continuing operations
  
$
1,922
  
$
2,122
  
$
3,849
  
$
3,894
Earnings (loss) from discontinued operations, net of taxes
    
(121)
    
(553)
    
(230)
    
(750)
Net earnings attributable to GECC
  
$
1,801
  
$
1,569
  
$
3,619
  
$
3,144
                         
                         
(a)  
Excluding net other-than-temporary impairment on investment securities.
 

See accompanying notes.
 
 
(3)
 

General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Comprehensive Income
(Unaudited)

   
Three months ended June 30,
  
Six months ended June 30,
(In millions)
    
2013
    
2012
    
2013
    
2012
                         
Net earnings
  
$
1,818
  
$
1,583
  
$
3,647
  
$
3,170
Less: net earnings (loss) attributable to noncontrolling interests
    
17
    
14
    
28
    
26
Net earnings attributable to GECC
  
$
1,801
  
$
1,569
  
$
3,619
  
$
3,144
                         
Other comprehensive income (loss)
                        
      Investment securities
  
$
(602)
  
$
176
  
$
(536)
  
$
508
      Currency translation adjustments
    
(1)
    
(408)
    
7
    
(274)
      Cash flow hedges
    
194
    
40
    
286
    
112
      Benefit plans
    
9
    
19
    
22
    
(5)
Other comprehensive income (loss)
    
(400)
    
(173)
    
(221)
    
341
Less: other comprehensive income (loss) attributable to
                        
      noncontrolling interests
    
(19)
    
(11)
    
(22)
    
(1)
Other comprehensive income (loss) attributable to GECC
  
$
(381)
  
$
(162)
  
$
(199)
  
$
342
                         
Comprehensive income
  
$
1,418
  
$
1,410
  
$
3,426
  
$
3,511
Less: comprehensive income (loss) attributable to
                        
      noncontrolling interests
    
(2)
    
3
    
6
    
25
Comprehensive income attributable to GECC
  
$
1,420
  
$
1,407
  
$
3,420
  
$
3,486
                         
                         
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)

     
Six months ended June 30,
(In millions)
              
2013
    
2012
                       
GECC shareowners' equity balance at January 1
            
$
81,890
  
$
77,110
Increases from net earnings attributable to GECC
              
3,619
    
3,144
Dividends and other transactions with shareowners
              
(2,082)
    
(3,000)
Other comprehensive income (loss) attributable to GECC
              
(199)
    
342
Changes in additional paid-in capital
              
 983
    
 2,231
Ending balance at June 30
              
84,211
    
79,827
Noncontrolling interests
              
550
    
759
Total equity balance at June 30
            
$
84,761
  
$
80,586
                       

See Note 8 for further information about changes in shareowners’ equity.
 
See accompanying notes.
 
 
(4)
 

General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Financial Position
 
             
June 30,
  
December 31,
(In millions, except share information)
            
2013
  
2012
             
(Unaudited)
    
Assets
                      
Cash and equivalents
            
$
69,531
  
$
61,942
Investment securities (Note 3)
              
43,661
    
48,439
Inventories
              
88
    
79
Financing receivables – net (Notes 4 and 12)
              
257,092
    
268,951
Other receivables
              
15,710
    
13,917
Property, plant and equipment, less accumulated amortization of $25,928
                      
   and $26,113
              
52,608
    
52,974
Goodwill (Note 5)
              
26,818
    
27,032
Other intangible assets – net (Note 5)
              
1,203
    
1,294
Other assets
              
52,382
    
62,201
Assets of businesses held for sale (Note 2)
              
165
    
211
Assets of discontinued operations (Note 2)
              
1,846
    
2,299
Total assets(a)
            
$
521,104
  
$
539,339
                       
Liabilities and equity
                      
Short-term borrowings (Note 6)
            
$
76,770
  
$
95,940
Accounts payable
              
7,093
    
6,259
Non-recourse borrowings of consolidated securitization entities (Note 6)
              
30,250
    
30,123
Bank deposits (Note 6)
              
48,597
    
46,461
Long-term borrowings (Note 6)
              
220,007
    
224,776
Investment contracts, insurance liabilities and insurance annuity benefits
              
27,615
    
28,696
Other liabilities
              
18,037
    
15,961
Deferred income taxes
              
5,588
    
5,988
Liabilities of businesses held for sale (Note 2)
              
7
    
157
Liabilities of discontinued operations (Note 2)
              
2,379
    
2,381
Total liabilities(a)
              
436,343
    
456,742
                       
Preferred stock, $0.01 par value (750,000 shares authorized at both June 30, 2013
                      
    and December 31, 2012, and 50,000 and 40,000 shares issued and outstanding
              
– 
    
– 
        at June 30, 2013 and December 31, 2012, respectively)
                      
Common stock, $14 par value (4,166,000 shares authorized at
                      
    both June 30, 2013 and December 31, 2012 and 1,000 shares
                      
        issued and outstanding at both June 30, 2013 and December 31, 2012, respectively)
          
– 
    
– 
Accumulated other comprehensive income (loss) – net(b)
                      
   Investment securities
              
138
    
673
   Currency translation adjustments
              
(102)
    
(131)
   Cash flow hedges
              
(461)
    
(746)
   Benefit plans
              
(714)
    
(736)
Additional paid-in capital
              
32,569
    
31,586
Retained earnings
              
52,781
    
51,244
Total GECC shareowners' equity
              
84,211
    
81,890
Noncontrolling interests(c)(Note 8)
              
550
    
707
Total equity
              
84,761
    
82,597
Total liabilities and equity
            
$
521,104
  
$
539,339
                       
                       
 
(a)
Our consolidated assets at June 30, 2013 include total assets of $46,939 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 $40,048 million and investment securities of $4,334 million. Our consolidated liabilities at June 30, 2013 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 $28,600 million. See Note 13.
 
 (b)
The sum of accumulated other comprehensive income (loss) attributable to GECC was $(1,139) million and $(940) million at June 30, 2013 and December 31, 2012, respectively.
 
 (c)
Included accumulated other comprehensive income (loss) attributable to noncontrolling interests of $(151) million and $(129) million at June 30, 2013 and December 31, 2012, respectively.
 
 
See accompanying notes.
 
 
(5)
 

General Electric Capital Corporation and consolidated affiliates
Condensed Statement of Cash Flows
(Unaudited)
 
 
     
Six months ended June 30,
(In millions)
        
2013
  
2012
                       
Cash flows – operating activities
                      
Net earnings
            
$
 3,647
  
$
 3,170
Less: net earnings (loss) attributable to noncontrolling interests
              
 28
    
 26
Net earnings attributable to GECC
              
 3,619
    
 3,144
(Earnings) loss from discontinued operations
              
 230
    
 750
Adjustments to reconcile net earnings attributable to GECC
                      
   to cash provided from operating activities
                      
      Depreciation and amortization of property, plant and equipment
              
 3,405
    
 3,288
      Increase (decrease) in accounts payable
              
 648
    
 185
      Provision for losses on financing receivables
              
 2,517
    
 1,606
      All other operating activities
              
 (1,642)
    
 1,773
Cash from (used for) operating activities – continuing operations
              
 8,777
    
 10,746
Cash from (used for) operating activities – discontinued operations
              
 (183)
    
 33
Cash from (used for) operating activities
              
 8,594
    
 10,779
                       
Cash flows – investing activities
                      
Additions to property, plant and equipment
              
 (5,481)
    
 (5,505)
Dispositions of property, plant and equipment
              
 2,560
    
 2,717
Increase in loans to customers
              
 (144,667)
    
 (148,817)
Principal collections from customers – loans
              
 151,373
    
 154,149
Investment in equipment for financing leases
              
 (4,165)
    
 (4,349)
Principal collections from customers – financing leases
              
 5,280
    
 5,993
Net change in credit card receivables
              
 (967)
    
 (1,178)
Proceeds from principal business dispositions
              
 753
    
 88
Net cash from (payments for) principal businesses purchased
              
 6,384
    
 -
All other investing activities
              
 12,257
    
 3,857
Cash from (used for) investing activities – continuing operations
              
 23,327
    
 6,955
Cash from (used for) investing activities – discontinued operations
              
 161
    
 (41)
Cash from (used for) investing activities
              
 23,488
    
 6,914
                       
Cash flows – financing activities
                      
Net increase (decrease) in borrowings (maturities of 90 days or less)
              
 (6,815)
    
 (621)
Net increase (decrease) in bank deposits
              
 (4,506)
    
 (890)
Newly issued debt (maturities longer than 90 days)
                      
   Short-term (91 to 365 days)
              
 189
    
 40
   Long-term (longer than one year)
              
 30,261
    
 29,618
Repayments and other debt reductions (maturities longer than 90 days)
                      
   Short-term (91 to 365 days)
              
 (38,483)
    
 (50,546)
   Long-term (longer than one year)
              
 (2,637)
    
 (1,988)
   Non-recourse, leveraged leases
              
 (469)
    
 (310)
Proceeds from issuance of preferred stock
              
 990
    
 2,227
Dividends paid to shareowners
              
 (2,082)
    
 (3,000)
All other financing activities
              
 (305)
    
 (2,354)
Cash from (used for) financing activities – continuing operations
              
 (23,857)
    
 (27,824)
Cash from (used for) financing activities – discontinued operations
              
 15
    
 -
Cash from (used for) financing activities
              
 (23,842)
    
 (27,824)
                       
Effect of currency exchange rate changes on cash and equivalents
              
 (658)
    
 (327)
                       
Increase (decrease) in cash and equivalents
              
 7,582
    
 (10,458)
Cash and equivalents at beginning of year
              
 62,044
    
 76,823
Cash and equivalents at June 30
              
 69,626
    
 66,365
Less: cash and equivalents of discontinued operations at June 30
              
 95
    
 112
Cash and equivalents of continuing operations at June 30
            
$
 69,531
  
$
 66,253
                       

See accompanying notes.
 
 
(6)
 
 
 
General Electric Capital Corporation and consolidated affiliates
Summary of Operating Segments
(Unaudited)

                 
   
Three months ended June 30,
  
Six months ended June 30,
(In millions)
  
2013
  
2012
  
2013
  
2012
                         
Revenues
                        
CLL
  
$
3,907
  
$
4,038
  
$
7,414
  
$
8,378
Consumer
    
3,715
    
3,812
    
7,606
    
7,689
Real Estate
    
872
    
876
    
2,529
    
1,712
Energy Financial Services
    
303
    
446
    
646
    
685
GECAS
    
1,282
    
1,317
    
2,661
    
2,648
    Total segment revenues
    
10,079
    
10,489
    
20,856
    
21,112
Corporate items and eliminations
    
901
    
865
    
1,659
    
1,582
Total revenues
  
$
10,980
  
$
11,354
  
$
22,515
  
$
22,694
                         
Segment profit
                        
CLL
  
$
825
  
$
628
  
$
1,223
  
$
1,292
Consumer
    
828
    
907
    
1,351
    
1,736
Real Estate
    
435
    
221
    
1,125
    
277
Energy Financial Services
    
60
    
122
    
143
    
193
GECAS
    
304
    
308
    
652
    
626
    Total segment profit
    
2,452
    
2,186
    
4,494
    
4,124
Corporate items and eliminations
    
(530)
    
(64)
    
(645)
    
(230)
Earnings from continuing operations
                        
    attributable to GECC
    
1,922
    
2,122
    
3,849
    
3,894
Earnings (loss) from discontinued operations,
                        
    net of taxes, attributable to GECC
    
(121)
    
(553)
    
(230)
    
(750)
Total net earnings attributable to GECC
  
$
1,801
  
$
1,569
  
$
3,619
  
$
3,144
                         
                         
See accompanying notes.
 
 
 
(7)
 
 
 
Notes to Condensed Financial Statements (Unaudited)
 
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
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, 2012 (2012 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.

Accounting Changes
 
On January 1, 2012, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2011-05, an amendment to Accounting Standards Codification (ASC) 220, Comprehensive Income. ASU 2011-05 introduced a new statement, the Consolidated Statement of Comprehensive Income. The amendments affect only the display of those components of equity categorized as other comprehensive income and do not change existing recognition and measurement requirements that determine net earnings.

On January 1, 2012, we adopted FASB ASU 2011-04, an amendment to ASC 820, Fair Value Measurements. ASU 2011-04 clarifies or changes the application of existing fair value measurements, including: that the highest and best use valuation premise in a fair value measurement is relevant only when measuring the fair value of nonfinancial assets; that a reporting entity should measure the fair value of its own equity instrument from the perspective of a market participant that holds that instrument as an asset; to permit an entity to measure the fair value of certain financial instruments on a net basis rather than based on its gross exposure when the reporting entity manages its financial instruments on the basis of such net exposure; that in the absence of a Level 1 input, a reporting entity should apply premiums and discounts when market participants would do so when pricing the asset or liability consistent with the unit of account; and that premiums and discounts related to size as a characteristic of the reporting entity’s holding are not permitted in a fair value measurement. Adopting these amendments had no effect on the financial statements. For a description of how we estimate fair value and our process for reviewing fair value measurements classified as Level 3 in the fair value hierarchy, see Note 1 in our 2012 consolidated financial statements.

See Note 1 in our 2012 consolidated financial statements for a summary of our significant accounting policies.
 
 
(8)
 
 
 
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 2012 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 2013 is available on our website, www.ge.com/secreports.

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.

In the second quarter of 2012, we committed to sell a portion of our Business Properties portfolio (Business Property) in Real Estate, including certain commercial loans, the origination and servicing platforms and the servicing rights on loans previously securitized by GECC. We completed the sale of Business Property on October 1, 2012 for proceeds of $2,406 million. We deconsolidated substantially all Real Estate securitization entities in the fourth quarter of 2012 as servicing rights related to these entities were transferred to the buyer at closing.

Summarized financial information for businesses held for sale is shown below.

             
June 30,
  
December 31,
(In millions)
            
2013
  
2012
               
           
      
Assets
              
           
      
Cash and equivalents
            
$
16
  
$
74
Financing receivables – net
              
109
    
47
Property, plant and equipment – net
            
 
– 
 
 
31
All other
              
40
    
59
Assets of businesses held for sale
            
$
165
  
$
211
               
            
    
            
Liabilities
              
 
    
 
Short-term borrowings
            
$
– 
  
$
138
All other
            
 
7
 
 
19
Liabilities of businesses held for sale
            
$
7
 
$
157

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 Consumer mortgage lending business in Ireland (Consumer Ireland) and our CLL trailer services business in Europe (CLL Trailer Services). Associated results of operations, financial position and cash flows are separately reported as discontinued operations for all periods presented.
 
 
(9)
 
 
 

Summarized financial information for discontinued operations is shown below.

   
Three months ended June 30,
  
Six months ended June 30,
(In millions)
  
2013
  
2012
  
2013
  
2012
                         
Operations
                        
Total revenues (loss)
  
$
43
  
$
(245)
  
$
30
  
$
(144)
                         
Earnings (loss) from discontinued operations before income taxes
  
$
(30)
  
$
(382)
  
$
(158)
  
$
(448)
Benefit (provision) for income taxes
    
21
    
123
    
142
    
157
Earnings (loss) from discontinued operations, net of taxes
  
$
(9)
  
$
(259)
  
$
(16)
  
$
(291)
                         
Disposal
                        
Gain (loss) on disposal before income taxes
  
$
(95)
  
$
(308)
  
$
(282)
  
$
(502)
Benefit (provision) for income taxes
    
(17)
    
14
    
68
    
43
Gain (loss) on disposal, net of taxes
  
$
(112)
  
$
(294)
  
$
(214)
  
$
(459)
                         
Earnings (loss) from discontinued operations, net of taxes
  
$
(121)
  
$
(553)
  
$
(230)
  
$
(750)
                         

             
June 30,
  
December 31,
(In millions)
            
2013
  
2012
                       
Assets
                      
Cash and equivalents
            
$
95
  
$
102
Property, plant and equipment – net
              
511
    
699
All other
              
1,240
    
1,498
Assets of discontinued operations
            
$
1,846
  
$
2,299
                       
Liabilities
                      
Deferred income taxes
            
$
337
  
$
374
All other
              
2,042
    
2,007
Liabilities of discontinued operations
            
$
2,379
  
$
2,381
                       

Assets at June 30, 2013 and December 31, 2012 primarily comprised cash, property, plant and equipment - net and 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.

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 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. The underlying portfolio to which this obligation relates is in runoff and interest rates were capped for all designated accounts by mid-2009. In the third quarter of 2010, we were required to begin making reimbursements under this arrangement.

Overall, excess interest refund claims experience has been difficult to predict and subject to several adverse factors, including the challenging global economic conditions over the last few years, the financial status of other Japanese personal lenders (including the 2010 bankruptcy of a large independent personal loan company), substantial ongoing legal advertising, and consumer behavior. Our reserves declined from $700 million at December 31, 2012 to $557 million at June 30, 2013, as claim payments and the effects of a strengthening U.S. dollar against the Japanese yen were partially offset by an increase to reserves of $126 million. In determining reserve levels, we consider analyses of recent and historical claims experience, as well as pending and estimated future refund requests, adjusted for the estimated percentage of customers who present valid requests and associated estimated payments. We determined our reserve assuming the pace of incoming claims will decelerate, that average exposure per claim remains consistent with recent experience, and that we continue to see the impact of loss mitigation efforts. Since our disposition of the business, incoming claims have continued to decline, however, it is highly variable and difficult to predict the pace and pattern of that decline and such assumptions have a significant effect on the total amount of our liability. Holding all other assumptions constant, an adverse change of 20% and 50% in assumed incoming daily claim rate reduction (resulting in an extension of the claim period and higher incoming claims), would result in an increase to our reserve of approximately $75 million and $400 million, respectively. We continue to closely monitor and evaluate claims activity.
 
 
(10)
 
 
 
Based on the uncertainties discussed above, and considering other environmental factors in Japan, including the runoff status of the underlying book of business, challenging economic conditions, the impact of laws and regulations (including consideration of proposed legislation that could impose a framework for collective legal action proceedings), and the financial status of other local personal lending companies, it is difficult to develop a meaningful estimate of the aggregate possible claims exposure. These uncertainties and factors could have an adverse effect on claims development.

GE Money Japan earnings (loss) from discontinued operations, net of taxes, were $(65) million and $(327) million in the three months ended June 30, 2013 and 2012, respectively, and $(116) million and $(354) million in the six months ended June 30, 2013 and 2012, 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 as to which there was an early payment default. All claims received by WMC for early payment default have either been resolved or are no longer being pursued.

Pending repurchase claims based upon representations and warranties made in connection with loan sales were $6,335 million at June 30, 2013, $5,357 million at December 31, 2012 and $705 million at December 31, 2011. Pending claims represent those active repurchase claims that identify the specific loans tendered for repurchase and, for each loan, the alleged breach of a representation or warranty. As such, they do not include unspecified repurchase claims, such as the Litigation Claims discussed below, or claims relating to breaches of representations that were made more than six years before WMC was notified of the claim. WMC believes that these repurchase claims do not meet the substantive and procedural requirements for tender under the governing agreements, would be barred from being enforced in legal proceedings under applicable statutes of limitations or are otherwise invalid. The amounts reported in pending claims reflect the purchase price or unpaid principal balances of the loans at the time of purchase and do not give effect to pay downs, accrued interest or fees, or potential recoveries based upon the underlying collateral. Historically, a small percentage of the total loans WMC originated and sold have been treated as “validly tendered,” meaning there was a breach of a representation and warranty that materially and adversely affects the value of the loan, and the demanding party met all other procedural and substantive requirements for repurchase.

Reserves related to WMC pending and estimated future loan repurchase claims were $787 million at June 30, 2013, reflecting an increase to reserves in the six months ended June 30, 2013 of $154 million due to incremental claim activity and updates to WMC’s estimate of future losses. The amount of these reserves is based upon pending and estimated future loan repurchase requests and WMC’s historical loss experience and evaluation of claim activity on loans tendered for repurchase.

The following table provides a roll forward of the reserve and pending repurchase claims.

 
Reserve
    
Pending claims
(In millions)
Three months ended
June 30, 2013
  
Six months ended
June 30, 2013
  
(In millions)
Three months ended
June 30, 2013
  
Six months ended
June 30, 2013
Reserve,
    beginning of period
$
740
  
$
633
  
Pending claims,
    beginning of period
$
6,210
  
$
5,357
Provision
  
47
    
154
  
New claims
  
125
    
978
Claim resolutions
 
– 
  
 
– 
  
Claim resolutions
 
– 
  
 
– 
Reserve, end of period
$
787
  
$
787
  
Pending claims, end of period
$
6,335
  
$
6,335
 
 
 
  
 
 
  
 
      
 
 

Given the significant recent activity in pending claims and related litigation filed in connection with such claims, 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 for pending and estimated future loan repurchase claims may result in an increase to these reserves. For example, a 50% increase in the estimate of future loan repurchase requests and a 100% increase in the estimated loss rate on loans tendered, would result in an increase to the reserves of approximately $750 million.
 
 
(11)
 
 
 
There are 15 lawsuits involving pending repurchase claims on loans included in 14 securitizations. WMC initiated three of the cases as the plaintiff; in the other cases WMC is a defendant. The adverse parties in these cases are securitization trustees or parties claiming to act on their behalf. In 11 of these lawsuits, the adverse parties seek relief for mortgage loans beyond those included in WMC’s previously discussed pending claims at June 30, 2013 (Litigation Claims). These Litigation Claims consist of sampling-based claims in two cases on approximately $900 million of mortgage loans and, in the other nine cases, claims for repurchase or damages based on the alleged failure to provide notice of defective loans, breach of a corporate representation and warranty, and/or non-specific claims for rescissionary damages on approximately $5,700 million of mortgage loans. These claims reflect the purchase price or unpaid principal balances of the loans at the time of purchase and do not give effect to pay downs, accrued interest or fees, or potential recoveries based upon the underlying collateral. As noted above, WMC believes that the Litigation Claims are disallowed by the governing agreements and applicable law. As a result, WMC has not included the Litigation Claims in its pending claims or in its estimates of future loan repurchase requests and holds no related reserve as of June 30, 2013.

At this point, WMC is unable to develop a meaningful estimate of reasonably possible loss in connection with the Litigation Claims described above due to a number of factors, including the extent to which courts will agree with the theories supporting the Litigation Claims. Specifically, while several courts in cases not involving WMC have supported some of those theories, other courts have rejected them. In addition, WMC lacks experience resolving such claims, and there are few public industry settlements that may serve as benchmarks to estimate a reasonably possible loss. An adverse court decision on any of the theories supporting the Litigation Claims could increase WMC’s exposure in some or all of the 15 lawsuits and result in additional claims and lawsuits. However, WMC believes that it has defenses to all the claims asserted in litigation, including for example, causation and materiality requirements, limitations on remedies for breach of representations and warranties, and the applicable statutes of limitations. 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. It is not possible to predict the outcome or impact of these defenses and other factors, any one of which could materially affect the amount of any loss ultimately incurred by WMC on these claims.

WMC has received claims on approximately $900 million of mortgage loans after the expiration of the statute of limitations as of June 30, 2013, $700 million of which are also included as Litigation Claims. WMC has also received unspecified indemnification demands from depositors/underwriters/sponsors of residential mortgage-backed securities (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.

The reserve estimates reflect judgment, based on currently available information, and a number of assumptions, including economic conditions, claim activity, pending and threatened litigation, indemnification demands, estimated repurchase rates, and other activity in the mortgage industry. Actual losses arising from claims against WMC could exceed the reserve amount and additional claims and lawsuits could result if actual claim rates, governmental actions, litigation and indemnification activity, adverse court decisions, settlement activity, actual repurchase rates or losses WMC incurs on repurchased loans differ from its assumptions. It is difficult to develop a meaningful estimate of aggregate possible claims exposure because of uncertainties surrounding economic conditions, the ability and propensity of mortgage loan holders to present valid claims, governmental actions, mortgage industry activity and litigation, as well as pending and threatened litigation and indemnification demands against WMC.

WMC revenues (loss) from discontinued operations were $(47) million and $(351) million in the three months ended June 30, 2013 and 2012, respectively, and $(154) million and $(358) million in the six months ended June 30, 2013 and 2012, respectively. WMC’s losses from discontinued operations, net of taxes, were $33 million and $227 million in the three months ended June 30, 2013 and 2012, respectively, and $105 million and $236 million in the six months ended June 30, 2013 and 2012, respectively.

Other

In the first quarter of 2013, we announced the planned disposition of CLL Trailer Services and classified the business as discontinued operations. CLL Trailer Services revenues from discontinued operations were $90 million and $104 million in the three months ended June 30, 2013 and 2012, respectively, and $183 million and $206 million in the six months ended June 30, 2013 and 2012, respectively. CLL Trailer Services earnings (loss) from discontinued operations, net of taxes, were $(24) million and $(1) million in the three months ended June 30, 2013 and 2012, respectively, and $(10) million (including a $98 million loss on disposal) and $19 million in the six months ended June 30, 2013 and 2012, respectively.
 
 
(12)
 
 
 
In the first quarter of 2012, we announced the planned disposition of Consumer Ireland and classified the business as discontinued operations. We completed the sale in the third quarter of 2012 for proceeds of $227 million. Consumer Ireland revenues from discontinued operations were an insignificant amount and $2 million in the three months ended June 30, 2013 and 2012, respectively, and an insignificant amount and $6 million in the six months ended June 30, 2013 and 2012, respectively. Consumer Ireland earnings (loss) from discontinued operations, net of taxes, were an insignificant amount and $2 million in the three months ended June 30, 2013 and 2012, respectively, and $1 million and $(186) million (including a $131 million loss on disposal) in the six months ended June 30, 2013 and 2012, 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 and holders of guaranteed investment contracts (GICs) in our run-off insurance operations and 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.

 
June 30, 2013
  
December 31, 2012
     
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
$
19,924
  
$
2,662
  
$
(182)
  
$
22,404
  
$
20,233
  
$
4,201
  
$
(302)
  
$
24,132
   State and municipal
  
4,195
    
296
    
(175)
    
4,316
    
4,084
    
575
    
(113)
    
4,546
   Residential mortgage-backed(a)
  
2,034
    
150
    
(68)
    
2,116
    
2,198
    
183
    
(119)
    
2,262
   Commercial mortgage-backed
  
2,905
    
191
    
(101)
    
2,995
    
2,930
    
259
    
(95)
    
3,094
   Asset-backed
  
6,069
    
12
    
(94)
    
5,987
    
5,784
    
31
    
(77)
    
5,738
   Corporate – non-U.S.
  
2,083
    
108
    
(99)
    
2,092
    
2,391
    
150
    
(126)
    
2,415
   Government – non-U.S.
  
2,198
    
98
    
(8)
    
2,288
    
1,617
    
149
    
(3)
    
1,763
   U.S. government and
                                              
        federal agency
  
886
    
69
    
– 
    
955
    
3,462
    
103
    
– 
    
3,565
Retained interests
  
70
    
23
    
– 
    
93
    
76
    
7
    
– 
    
83
Equity
                                              
   Available-for-sale
  
240
    
54
    
(17)
    
277
    
513
    
86
    
(3)
    
596
   Trading
  
138
    
– 
    
– 
    
138
    
245
    
– 
    
– 
    
245
Total
$
40,742
  
$
3,663
  
$
(744)
  
$
43,661
  
$
43,533
  
$
5,744
  
$
(838)
  
$
48,439
                                               
                                               
(a)  
Substantially collateralized by U.S. mortgages. Of our total RMBS portfolio at June 30, 2013, $1,346 million relates to securities issued by government-sponsored entities and $770 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.
 
 
The fair value of investment securities decreased to $43,661 million at June 30, 2013, from $48,439 million at December 31, 2012, primarily due to the sale of U.S. government and federal agency securities at our treasury operations and the impact of higher interest rates.
 
 
(13)
 
 
 
The following tables present the estimated fair values and gross unrealized losses of our 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)
                         
June 30, 2013
                        
Debt
                        
   U.S. corporate
$
1,907
  
$
(119)
  
$
365
  
$
(63)
  
   State and municipal
  
962
    
(66)
    
295
    
(109)
  
   Residential mortgage-backed
  
258
    
(10)
    
541
    
(58)
  
   Commercial mortgage-backed
  
363
    
(28)
    
829
    
(73)
  
   Asset-backed
  
5,203
    
(47)
    
422
    
(47)
  
   Corporate – non-U.S.
  
81
    
(1)
    
621
    
(98)
  
   Government – non-U.S.
  
1,316
    
(6)
    
38
    
(2)
  
   U.S. government and federal agency
  
262
    
– 
    
– 
    
– 
  
Retained interests
  
7
    
– 
    
– 
    
– 
  
Equity
  
35
    
(17)
    
– 
    
– 
  
Total
$
10,394
  
$
(294)
  
$
3,111
  
$
(450)
  
                         
December 31, 2012
                        
Debt
                        
   U.S. corporate
$
434
  
$
(7)
  
$
813
  
$
(295)
  
   State and municipal
  
146
    
(2)
    
326
    
(111)
  
   Residential mortgage-backed
  
98
    
(1)
    
691
    
(118)
  
   Commercial mortgage-backed
  
37
    
– 
    
979
    
(95)
  
   Asset-backed
  
18
    
(1)
    
658
    
(76)
  
   Corporate – non-U.S.
  
167
    
(8)
    
602
    
(118)
  
   Government – non-U.S.
  
201
    
(1)
    
37
    
(2)
  
   U.S. government and federal agency
  
– 
    
– 
    
– 
    
– 
  
Retained interests
  
3
    
– 
    
– 
    
– 
  
Equity
  
26
    
(3)
    
– 
    
– 
  
Total
$
1,130
  
$
(23)
  
$
4,106
  
$
(815)
  
                         
                         
(a)  
Includes gross unrealized losses at June 30, 2013 of $(145) million related to securities that had other-than-temporary impairments previously recognized.  
 

We regularly review investment securities for impairment using both qualitative and quantitative criteria. 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 these securities before recovery of our amortized cost. We believe that the unrealized loss associated with our equity securities will be recovered within the foreseeable future. The methodologies and significant inputs used to measure the amount of credit loss for our investment securities during the six months ended June 30, 2013 have not changed from those described in Note 3 in our 2012 consolidated financial statements.

During the three months ended June 30, 2013, we recognized pre-tax, other-than-temporary impairments of $152 million, of which $133 million was recorded through earnings, of which $96 million related to the impairment of an investment in a Brazilian company that was fully offset by the benefit of a guarantee provided by GE, and $19 million was recorded in accumulated other comprehensive income (loss) (AOCI). At April 1, 2013, cumulative impairments recognized in earnings associated with debt securities still held were $694 million. During the three months ended June 30, 2013, we recognized first-time impairments of $122 million and incremental charges on previously impaired securities of $7 million. These amounts included $46 million related to securities that were subsequently sold.

During the three months ended June 30, 2012, we recognized pre-tax, other-than-temporary impairments of $33 million, of which $32 million was recorded through earnings ($16 million relates to equity securities) and $1 million was recorded in AOCI. At April 1, 2012, cumulative impairments recognized in earnings associated with debt securities still held were $434 million. During the three months ended June 30, 2012, we recognized first-time impairments of $3 million and incremental charges on previously impaired securities of $6 million. These amounts included $33 million related to securities that were subsequently sold.
 
 
(14)
 
 
During the six months ended June 30, 2013, we recognized pre-tax, other-than-temporary impairments of $441 million, of which $411 million was recorded through earnings ($1 million relates to equity securities), of which $96 million related to the impairment of an investment in a Brazilian company that was fully offset by the benefit of a guarantee provided by GE, and $30 million was recorded in AOCI. At January 1, 2013, cumulative impairments recognized in earnings associated with debt securities still held were $420 million. During the six months ended June 30, 2013, we recognized first-time impairments of $385 million and incremental charges on previously impaired securities of $19 million. These amounts included $47 million related to securities that were subsequently sold.

During the six months ended June 30, 2012, we recognized pre-tax, other-than-temporary impairments of $65 million, of which $64 million was recorded through earnings ($23 million relates to equity securities) and $1 million was recorded in AOCI. At January 1, 2012, cumulative impairments recognized in earnings associated with debt securities still held were $558 million. During the six months ended June 30, 2012, we recognized first-time impairments of $10 million and incremental charges on previously impaired securities of $11 million. These amounts included $169 million related to securities that were subsequently sold.

Contractual Maturities of Investment in Available-for-Sale Debt Securities (Excluding Mortgage-Backed and Asset-Backed Securities)
 
                       
(In millions)
            
Amortized
  
Estimated
             
cost
  
fair value
Due
                      
    Within one year
            
$
 2,675
  
$
 2,689
    After one year through five years
              
 3,424
    
 3,630
    After five years through ten years
              
 5,346
    
 5,604
    After ten years
              
 17,841
    
 20,132

We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

Supplemental information about gross realized gains and losses on available-for-sale investment securities follows.

   
Three months ended June 30,
  
Six months ended June 30,
(In millions)
  
2013
  
2012
  
2013
  
2012
                         
Gains
  
$
 123
  
$
 21
  
$
 185
  
$
 59
Losses, including impairments
    
 (139)
    
 (34)
    
 (417)
    
 (104)
    Net
  
$
 (16)
  
$
 (13)
  
$
 (232)
  
$
 (45)
                         

Although we generally do not have the intent to sell any specific securities at the end of the period, in the ordinary course of managing our investment securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements and the funding of claims and obligations to policyholders. In some of our bank subsidiaries, we maintain a certain level of purchases and sales volume principally of non-U.S. government debt securities. In these situations, fair value approximates carrying value for these securities.

Proceeds from investment securities sales and early redemptions by issuers totaled $4,296 million and $2,742 million in the three months ended June 30, 2013 and 2012, respectively, and $7,084 million and $6,504 million in the six months ended June 30, 2013 and 2012, respectively, principally from the sales of short-term securities in our bank subsidiaries and treasury operations.

We recognized pre-tax gains (losses) on trading securities of $5 million and $13 million in the three months ended June 30, 2013 and 2012, respectively, and $41 million and $36 million in the six months ended June 30, 2013 and 2012, respectively.
 
 
(15)
 
 
4. FINANCING RECEIVABLES AND ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES
 
             
June 30,
  
December 31,
(In millions)
            
2013
  
2012
                       
Loans, net of deferred income(a)
            
$
231,672
  
$
241,465
Investment in financing leases, net of deferred income
              
30,708
    
32,471
               
262,380
    
273,936
Less allowance for losses
              
(5,288)
    
(4,985)
Financing receivables – net(b)
            
$
257,092
  
$
268,951
                       
                       
(a)  
Deferred income was $1,963 million and $2,182 million at June 30, 2013 and December 31, 2012, respectively.
 
(b)  
Financing receivables at June 30, 2013 and December 31, 2012 included $657 million and $750 million, respectively, relating to loans that had been acquired in a transfer but have been subject to credit deterioration since origination.
 
 
The following tables provide additional information about our financing receivables and related activity in the allowance for losses for our Commercial, Real Estate and Consumer portfolios.
 
             
June 30,
  
December 31,
(In millions)
            
2013
  
2012
                       
Commercial
                      
CLL
                      
Americas
            
$
70,499
  
$
72,517
Europe
              
35,839
    
37,035
Asia
              
9,907
    
11,401
Other
              
506
    
605
Total CLL
              
116,751
    
121,558
                       
Energy Financial Services
              
4,671
    
4,851
                       
GECAS
              
9,998
    
10,915
                       
Other
              
425
    
486
Total Commercial
              
131,845
    
137,810
                       
Real Estate
              
19,621
    
20,946
                       
Consumer
                      
Non-U.S. residential mortgages
              
31,784
    
33,451
Non-U.S. installment and revolving credit
              
17,620
    
18,546
U.S. installment and revolving credit
              
50,155
    
50,853
Non-U.S. auto
              
3,808
    
4,260
Other
              
7,547
    
8,070
Total Consumer
              
110,914
    
115,180
                       
Total financing receivables
              
262,380
    
273,936
                       
Less allowance for losses
              
(5,288)
    
(4,985)
Total financing receivables – net
            
$
257,092
  
$
268,951
                       
                       
 
 
(16)
 
 

Allowance for Losses on Financing Receivables
 
 
Balance at
  
Provision
              
Balance at
 
January 1,
  
charged to
      
Gross
      
June 30,
(In millions)
2013
  
operations
  
Other
(a)
write-offs
(b)
Recoveries
(b)
2013
                                   
Commercial
                                  
CLL
                                  
Americas
$
490
  
$
182
  
$
(1)
  
$
(249)
  
$
58
  
$
480
Europe
  
445
    
146
    
1
    
(304)
    
41
    
329
Asia
  
80
    
39
    
(7)
    
(47)
    
7
    
72
Other
  
6
    
(3)
    
– 
    
(3)
    
– 
    
– 
Total CLL
  
1,021
    
364
    
(7)
    
(603)
    
106
    
881
                                   
                                   
Energy Financial Services
  
9
    
(1)
    
– 
    
– 
    
– 
    
8
                                   
GECAS
  
8
    
3
    
– 
    
– 
    
– 
    
11
                                   
Other
  
3
    
– 
    
– 
    
(1)
    
– 
    
2
Total Commercial
  
1,041
    
366
    
(7)
    
(604)
    
106
    
902
                                   
Real Estate
  
320
    
(19)
    
(3)
    
(65)
    
2
    
235
                                   
Consumer
                                  
Non-U.S. residential
                                  
   mortgages
  
480
    
125
    
(1)
    
(113)
    
26
    
517
Non-U.S. installment
                                  
   and revolving credit
  
623
    
279
    
(32)
    
(498)
    
291
    
663
U.S. installment and
                                  
   revolving credit
  
2,282
    
1,660
    
(50)
    
(1,464)
    
286
    
2,714
Non-U.S. auto
  
67
    
24
    
(5)
    
(62)
    
38
    
62
Other
  
172
    
82
    
9
    
(103)
    
35
    
195
Total Consumer
  
3,624
    
2,170
    
(79)
    
(2,240)
    
676
    
4,151
Total
$
4,985
  
$
2,517
  
$
(89)
  
$
(2,909)
  
$
784
  
$
5,288
                                   
                                   
(a)  
Other primarily included the effects of currency exchange.
 
(b)  
Net write-offs (gross write-offs less recoveries) in certain portfolios may exceed the beginning allowance for losses as a result of losses that are incurred subsequent to the beginning of the fiscal year due to information becoming available during the current year, which may identify further deterioration on existing financing receivables.
 
 
 
 
(17)
 
 

 
Balance at
  
Provision
              
Balance at
 
January 1,
  
charged to
      
Gross
      
June 30,
(In millions)
2012
  
operations
  
Other
(a)
write-offs
(b)
Recoveries
(b)
2012
                                   
Commercial
                                  
CLL
                                  
Americas
$
889
  
$
57
  
$
(30)
  
$
(306)
  
$
52
  
$
662
Europe
  
400
    
158
    
(15)
    
(95)
    
36
    
484
Asia
  
157
    
13
    
(3)
    
(89)
    
9
    
87
Other
  
4
    
– 
    
(1)
    
(2)
    
– 
    
1
Total CLL
  
1,450
    
228
    
(49)
    
(492)
    
97
    
1,234
                                   
                                   
Energy Financial Services
  
26
    
10
    
– 
    
(24)
    
– 
    
12
                                   
GECAS
  
17
    
26