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118 GE 2011 ANNUAL REPORT
    
Note 22.
Financial Instruments
The following table provides information about the assets and liabilities not carried at fair value in our Statement of Financial Position.
Consistent with ASC 825, Financial Instruments, the table excludes fi nance leases and non-fi nancial assets and liabilities. Apart from
certain of our borrowings and certain marketable securities, few of the instruments discussed below are actively traded and their fair
values must often be determined using fi nancial models. Realization of the fair value of these instruments depends upon market forces
beyond our control, including marketplace liquidity.
2011 2010
Assets (liabilities) Assets (liabilities)
December 31 (In millions)
Notional
amount
Carrying
amount (net)
Estimated fair
value
Notional
amount
Carrying
amount (net)
Estimated fair
value
GE
Assets
Investments and notes receivable $ (a) $ 285 $ 285 $ (a) $ 414 $ 414
Liabilities
Borrowings (b) (a) (11,589) (12,535) (a) (10,112) (10,953)
GECS
Assets
Loans (a) 251,459 251,587 (a) 268,239 264,550
Other commercial mortgages (a) 1,494 1,537 (a) 1,041 1,103
Loans held for sale (a) 496 497 (a) 287 287
Other financial instruments (c) (a) 2,071 2,534 (a) 2,103 2,511
Liabilities
Borrowings and bank deposits (b)(d) (a) (443,097) (449,403) (a) (470,520) (482,724)
Investment contract benefits (a) (3,493) (4,240) (a) (3,726) (4,264)
Guaranteed investment contracts (a) (4,226) (4,266) (a) (5,502) (5,524)
Insurance—credit life (e) 1,944 (106) (88) 1,825 (103) (69)
(a) These financial instruments do not have notional amounts.
(b) See Note 10.
(c) Principally cost method investments.
(d) Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at December 31, 2011
and 2010 would have been reduced by $9,051 million and $4,298 million, respectively.
(e) Net of reinsurance of $2,000 million and $2,800 million at December 31, 2011 and 2010, respectively.
A description of how we estimate fair values follows.
Loans
Based on a discounted future cash fl ows methodology, using
current market interest rate data adjusted for inherent credit risk
or quoted market prices and recent transactions, if available.
Borrowings and bank deposits
Based on valuation methodologies using current market interest
rate data which are comparable to market quotes adjusted for our
non-performance risk.
Investment contract benefits
Based on expected future cash fl ows, discounted at currently
offered rates for immediate annuity contracts or the income
approach for single premium deferred annuities.
Guaranteed investment contracts
Based on valuation methodologies using current market interest
rate data, adjusted for our non-performance risk.
All other instruments
Based on observable market transactions and/or valuation meth-
odologies using current market interest rate data adjusted for
inherent credit risk.
Assets and liabilities that are refl ected in the accompanying
fi nancial statements at fair value are not included in the above
disclosures; such items include cash and equivalents, investment
securities and derivative fi nancial instruments.
Additional information about certain categories in the table
above follows.
INSURANCE—CREDIT LIFE
Certain insurance affi liates, primarily in Consumer, issue credit life
insurance designed to pay the balance due on a loan if the bor-
rower dies before the loan is repaid. As part of our overall risk
management process, we cede to third parties a portion of this
associated risk, but are not relieved of our primary obligation
to policyholders.