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GE 2009 ANNUAL REPORT 99
    
The following tables present our assets and liabilities measured at fair value on a recurring basis. Included in the tables are invest-
ment securities of $25,729 million and $21,967 million at December 31, 2009 and 2008, respectively, primarily supporting obligations to
annuitants and policyholders in our run-off insurance operations, and $6,629 million and $8,190 million at December 31, 2009 and
2008, respectively, supporting obligations to holders of guaranteed investment contracts. Such securities are mainly investment grade.
(In millions) Level 1 Level 2 Level 3 (a) Netting
adjustment (b) Net
balance
DECEMBER 31, 2009
ASSETS
Investment securities
Debt
U.S. corporate $ 723 $19,669 $ 3,258 $ — $23,650
State and municipal — 1,621 173 — 1,794
Residential mortgage-backed — 3,195 123 — 3,318
Commercial mortgage-backed — 2,647 55 — 2,702
Asset-backed — 860 1,877 — 2,737
Corporate — non-U.S. 159 692 989 — 1,840
Government — non-U.S. 1,277 1,483 176 — 2,936
U.S. government and federal agency 85 2,307 282 — 2,674
Retained interests — — 8,831 — 8,831
Equity
Available-for-sale 536 184 19 — 739
Trading 720 — — — 720
Derivatives (c) — 11,056 804 (3,851) 8,009
Other (d) — — 1,006 — 1,006
Total $3,500 $43,714 $17,593 $ (3,851) $60,956
LIABILITIES
Derivatives $ — $ 7,295 $ 222 $ (3,860) $ 3,657
Other (e) — 798 — — 798
Total $ — $ 8,093 $ 222 $ (3,860) $ 4,455
DECEMBER 31, 2008
ASSETS
Investment securities
Debt
U.S. corporate $ — $17,191 $ 3,209 $ — $20,400
State and municipal — 1,234 247 — 1,481
Residential mortgage-backed 30 4,141 173 — 4,344
Commercial mortgage-backed — 2,070 66 — 2,136
Asset-backed — 880 1,605 — 2,485
Corporate — non-U.S. 69 562 658 — 1,289
Government — non-U.S. 496 422 424 — 1,342
U.S. government and federal agency 5 515 184 — 704
Retained interests — — 6,356 — 6,356
Equity
Available-for-sale 475 12 34 — 521
Trading 83 305 — — 388
Derivatives (c) — 18,911 1,142 (7,411) 12,642
Other (d) 1 288 1,105 — 1,394
Total $1,159 $46,531 $15,203 $ (7,411) $55,482
LIABILITIES
Derivatives $ 2 $12,643 $ 166 $ (7,575) $ 5,236
Other (e) — 1,031 — — 1,031
Total $ 2 $13,674 $ 166 $ (7,575) $ 6,267
(a) Level 3 investment securities valued using non-binding broker quotes totaled $1,055 million and $2,074 million at December 31, 2009 and 2008, respectively, and were
classified as available-for-sale securities.
(b) The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Included fair value adjustments related to our own
and counterparty credit risk.
(c) The fair value of derivatives included an adjustment for non-performance risk. At December 31, 2009 and 2008, the cumulative adjustment was a gain of $9 million and
$177 million, respectively.
(d) Included private equity investments and loans designated under the fair value option.
(e) Primarily represented the liability associated with certain of our deferred incentive compensation plans.