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GE 2013 ANNUAL REPORT 125
    
LEVEL 3 MEASUREMENTS
The following table presents information relating to the signifi cant unobservable inputs of our Level 3 recurring and non-
recurring measurements.
(Dollars in millions) Fair value Valuation technique Unobservable inputs Range (weighted average)
DECEMBER 31, 2013
RECURRING FAIR VALUE MEASUREMENTS
Investment securities
Debt
U.S. corporate $ 898 Income approach Discount rate (a) 1.5%–13.3% (6.5%)
Asset-backed 6,854 Income approach Discount rate (a) 1.2%–10.5% (3.7%)
Corporate—non-U.S. 819 Income approach Discount rate (a) 1.4%–46.0% (15.1%)
Other financial assets 381 Income approach,
Market comparables
Weighted average
cost of capital 9.3%–9.3% (9.3%)
EBITDA multiple 5.4X–12.5X (9.5X)
Discount rate (a) 5.2%–8.8% (5.3%)
Capitalization rate (b) 6.3%–7.5% (7.2%)
NON-RECURRING FAIR VALUE MEASUREMENTS
Financing receivables and loans held for sale $ 1,937 Income approach, Capitalization rate (b) 5.5%–16.7% (8.0%)
Business enterprise value EBITDA multiple 4.3X–5.5X (4.8X)
Discount rate (a) 6.6%–6.6% (6.6%)
Cost and equity method investments 102 Income approach, Discount rate (a) 5.7%–5.9% (5.8%)
Market comparables Capitalization rate (b) 8.5%–10.6% (10.0%)
Weighted average
cost of capital 9.3%–9.6% (9.4%)
EBITDA multiple 7.1X–14.5X (11.3X)
Revenue multiple 2.2X–12.6X (9.4X)
Long-lived assets, including real estate 694 Income approach Capitalization rate (b) 5.4%–14.5% (7.8%)
Discount rate (a) 4.0%–23.0% (9.0%)
DECEMBER 31, 2012
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 633 Income approach,
Market comparables
Weighted average
cost of capital 8.7%–10.2% (8.7%)
EBITDA multiple 4.9X–10.6X (7.9X)
NON-RECURRING FAIR VALUE MEASUREMENTS
Financing receivables and loans held for sale $ 2,835 Income approach, Capitalization rate (b) 3.8%–14.0% (8.0%)
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 that 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.
At December 31, 2013 and December 31, 2012, other Level 3
recurring fair value measurements of $2,816 million and
$3,146 million, respectively, and non-recurring measurements
of $1,460 million and $2,412 million, respectively, 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. At December 31, 2013 and December 31,
2012, other recurring fair value measurements of $327 million
and $370 million, respectively, and non-recurring fair value mea-
surements of $571 million and $285 million, respectively, were
individually insignifi cant and utilize a number of different unob-
servable inputs not subject to meaningful aggregation.