GE 2012 Annual Report Download - page 122

Download and view the complete annual report

Please find page 122 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

120 GE 2012 ANNUAL REPORT
notes to consolidated financial statements
LEVEL 3 MEASUREMENTS
The following table presents information relating to the significant unobservable inputs of our Level 3 recurring and non-
recurring measurements.
(Dollars in millions)
Fair value at
December 31, 2012 Valuation technique Unobservable inputs Range (weighted average)
RECURRING FAIR VALUE MEASUREMENTS
Investment securities
Debt
U.S. corporate $1,652 Income approach Discount rate (a) 1.3%–29.9% (11.1%)
Asset-backed 4,977 Income approach Discount rate (a) 2.1%–13.1% (3.8%)
Corporate—non-U.S. 865 Income approach Discount rate (a) 1.5%–25.0% (13.2%)
Other financial assets 360 Income approach
Weighted average
cost of capital 8.7%–10.2% (8.7%)
273 Market comparables EBITDA multiple 4.9X–10.6X (7.9X)
NON-RECURRING FAIR VALUE MEASUREMENTS
Financing receivables and loans held for sale $2,633 Income approach Capitalization rate (b) 3.8%–14.0% (8.0%)
202 Business enterprise value EBITDA multiple 2.0X–6.0X (4.8X)
Cost and equity method investments 72 Income approach Capitalization rate (b) 9.2%–12.8% (12.0%)
Long-lived assets, including real estate 985 Income approach Capitalization rate (b) 4.8%–14.6% (7.3%)
(a) Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount
rate would result in a decrease in the fair value.
(b) Represents the rate of return on net operating income which is considered acceptable for an investor and is used to determine a property’s capitalized value. An increase in
the capitalization rate would result in a decrease in the fair value.
Other Level 3 recurring fair value measurements of $3,146 million
and non-recurring measurements of $2,412 million are valued
using non-binding broker quotes or other third-party sources. For a
description of our process to evaluate third-party pricing servicers,
see Note 1. Other recurring fair value measurements of $370 mil-
lion and non-recurring fair value measure ments of $287 million
were individually insignificant and utilize a number of different
unobservable inputs not subject to meaningful aggregation.