GE 2009 Annual Report Download - page 87

GE 2009 ANNUAL REPORT 85
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(g) Included $1,649 million of covered bonds at December 31, 2009. If the short-term credit rating of GE Capital were reduced below A–1/P–1, GE Capital would be required to
partially cash collateralize these bonds in an amount up to $775 million.
(h) Included $452 million and $2,104 million of asset-backed senior notes, issued by consolidated, liquidating securitization entities at December 31, 2009 and 2008, respectively.
See Note 23.
(i) Included $417 million and $750 million of subordinated notes guaranteed by GE at December 31, 2009 and 2008, respectively.
(j) Subordinated debentures receive rating agency equity credit and were hedged at issuance to the U.S. dollar equivalent of $7,725 million.
(k) Included $21,252 million and $12,314 million of deposits in non-U.S. banks at December 31, 2009 and 2008, respectively, and $10,476 million and $6,699 million of certificates
of deposits distributed by brokers with maturities greater than one year at December 31, 2009 and 2008, respectively.
When insurance affiliates cede insurance to third parties, such
as reinsurers, they are not relieved of their primary obligation
to policyholders. Losses on ceded risks give rise to claims for
recovery; we establish allowances for probable losses on such
receivables from reinsurers as required. Reinsurance recoverables
are included in the caption “Other GECS receivables” on our
Statement of Financial Position, and amounted to $1,188 million
and $1,062 million at December 31, 2009 and 2008, respectively.
We recognize reinsurance recoveries as a reduction of the
Statement of Earnings caption “Investment contracts, insurance
losses and insurance annuity benefits.” Reinsurance recoveries
were $219 million, $221 million and $104 million for the years
ended December 31, 2009, 2008 and 2007, respectively.
Note 12.
Postretirement Benefit Plans
Pension Benefits
We sponsor a number of pension plans. Principal pension plans,
together with affiliate and certain other pension plans (other pen-
sion plans) detailed in this note, represent about 99% of our total
pension assets. We use a December 31 measurement date for
our plans.
PRINCIPAL PENSION PLANS are the GE Pension Plan and the GE
Supplementary Pension Plan.
The GE Pension Plan provides benefits to certain U.S. employees
based on the greater of a formula recognizing career earnings or
a formula recognizing length of service and final average earnings.
Certain benefit provisions are subject to collective bargaining.
The GE Supplementary Pension Plan is an unfunded plan
providing supplementary retirement benefits primarily to higher-
level, longer-service U.S. employees.
OTHER PENSION PLANS in 2009 included 32 U.S. and non-U.S.
pension plans with pension assets or obligations greater than
$50 million. These defined benefit plans provide benefits to
employees based on formulas recognizing length of service and
earnings.
PENSION PLAN PARTICIPANTS
December 31, 2009 Total
Principal
pension
plans
Other
pension
plans
Active employees 157,000 120,000 37,000
Vested former employees 239,000 200,000 39,000
Retirees and beneficiaries 239,000 215,000 24,000
Total 635,000 535,000 100,000
Our borrowings are addressed below from the perspectives of
liquidity, interest rate and currency risk management. Additional
information about borrowings and associated swaps can be
found in Note 22.
LIQUIDITY is affected by debt maturities and our ability to repay
or refinance such debt. Long-term debt maturities over the next
five years follow.
(In millions) 2010 2011 2012 2013 2014
GE $ 27 $ 2,011 $ 32 $ 5,033 $ 108
GECS 70,262
(a) 65,532 83,311 29,551 27,369
(a) Fixed and floating rate notes of $632 million contain put options with exercise
dates in 2010, and which have final maturity beyond 2014.
Committed credit lines totaling $51.7 billion had been extended
to us by 59 banks at year-end 2009. Availability of these lines is
shared between GE and GECS with $9.0 billion and $51.7 billion
available to GE and GECS, respectively. The GECS lines include
$36.8 billion of revolving credit agreements under which we
can borrow funds for periods exceeding one year. Additionally,
$14.4 billion are 364-day lines that contain a term-out feature
that allows GE or GECS to extend the borrowings for one year
from the date of expiration of the lending agreement. We pay
banks for credit facilities, but amounts were insignificant in each
of the past three years.
Note 11.
GECS Investment Contracts, Insurance Liabilities
and Insurance Annuity Benefits
GECS investment contracts, insurance liabilities and insurance
annuity benefits comprise mainly obligations to annuitants and
policyholders in our run-off insurance operations and holders
of guaranteed investment contracts.
December 31 (In millions) 2009 2008
Investment contracts $ 3,940 $ 4,212
Guaranteed investment contracts 8,310 10,828
Total investment contracts 12,250 15,040
Life insurance benefits (a) 16,847 16,259
Unpaid claims and claims adjustment expenses 2,102 2,145
Unearned premiums 532 623
Universal life benefits 278 302
Total $32,009 $34,369
(a) Life insurance benefits are accounted for mainly by a net-level-premium method
using estimated yields generally ranging from 3.0% to 8.50% in both 2009 and 2008.