GE 2012 Annual Report Download - page 103

Download and view the complete annual report

Please find page 103 of the 2012 GE annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 150

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150

GE 2012 ANNUAL REPORT 101
notes to consolidated financial statements
On October 9, 2012, GE issued $7,000 million of notes comprising
$2,000 million of 0.850% notes due 2015, $3,000 million of
2.700% notes due 2022 and $2,000 million of 4.125% notes due
2042. On February 1, 2013, we repaid $5,000 million of 5.0% GE
senior unsecured notes.
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) 2013 2014 2015 2016 2017
GE $ 5,068 $ 80 $ 2,055 $ 41 $ 4,015
GECC 44,264 (a) 38,783 36,252 23,047 24,775
(a) Fixed and floating rate notes of $914 million contain put options with exercise
dates in 2013, and which have final maturity beyond 2017.
Committed credit lines totaling $48.2 billion had been extended
to us by 51 banks at year-end 2012. GECC can borrow up to
$48.2 billion under all of these credit lines. GE can borrow up to
$12.0 billion under certain of these credit lines. The GECC lines
include $30.3 billion of revolving credit agreements under which
we can borrow funds for periods exceeding one year. Additionally,
$17.9 billion are 364-day lines that contain a term-out feature that
allows GE or GECC to extend the borrowings for one or two years
from the date of expiration of the lending agreement.
Note 11.
Investment Contracts, Insurance Liabilities and
Insurance Annuity Benefits
Investment contracts, insurance liabilities and insurance annuity
benefits comprise mainly obligations to annuitants and policyhold-
ers in our run-off insurance operations and holders of guaranteed
investment contracts.
December 31 (In millions) 2012 2011
Investment contracts $ 3,321 $ 3,493
Guaranteed investment contracts 1,644 4,226
Total investment contracts 4,965 7,719
Life insurance benefits (a) 20,427 19,257
Other (b) 3,304 3,222
28,696 30,198
ELIMINATIONS (428) (424)
Total $28,268 $29,774
(a) Life insurance benefits are accounted for mainly by a net-level-premium method
using estimated yields generally ranging from 3.0% to 8.5% in both 2012 and 2011.
(b) Substantially all unpaid claims and claims adjustment expenses and unearned
premiums.
When insurance affiliates cede insurance risk to third parties, such
as reinsurers, they are not relieved of their primary obligation to
policyholders. When 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 GECC receivables” on our
Statement of Financial Position, and amounted to $1,542 million
and $1,411 million at December 31, 2012 and 2011, respectively.
We recognize reinsurance recoveries as a reduction of the
Statement of Earnings caption “Investment contracts, insurance
losses and insurance annuity benefits.” Reinsurance recover-
ies were $234 million, $224 million and $174 million for the years
ended December 31, 2012, 2011 and 2010, 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
pension 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. employ-
ees based on the greater of a formula recognizing career
earnings or a formula recognizing length of service and final aver-
age earnings. Certain benefit provisions are subject to collective
bargaining. Salaried employees who commence service on or
after January 1, 2011 and any employee who commences service
on or after January 1, 2012 will not be eligible to participate in
the GE Pension Plan, but will participate in a defined contribution
retirement program.
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 2012 included 40 U.S. and non-U.S.
pension plans with pension assets or obligations greater than
$50 million. These defined benefit plans generally provide bene-
fits to employees based on formulas recognizing length of service
and earnings.
PENSION PLAN PARTICIPANTS
December 31, 2012 Total
Principal
pension
plans
Other
pension
plans
Active employees 136,000 101,000 35,000
Vested former employees 236,000 192,000 44,000
Retirees and beneficiaries 257,000 226,000 31,000
Total 629,000 519,000 110,000