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VARIABLE INTEREST ENTITIES
9 Months Ended
Sep. 30, 2017
Variable Interest Entities [Abstract]  
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES

A VIE is an entity that has one of three characteristics: (1) it is controlled by someone other than its shareowners or partners, (2) its shareowners or partners are not economically exposed to the entity's earnings (for example, they are protected against losses), or (3) it was thinly capitalized when it was formed.

In the normal course of business we become involved with VIEs either because we help create them or we invest in them. Our VIEs either provide goods and services to customers or provide financing to third parties for the purchase of GE goods and services. If we control the VIE, we consolidate it and provide disclosure below. However, if the VIE is a business and use of its assets is not limited to settling its liabilities, ongoing disclosures are not required.

CONSOLIDATED VARIABLE INTEREST ENTITIES

Our most significant consolidated VIEs are four joint ventures used to complete acquisitions. The newest of these, BHGE LLC was formed as part of the Baker Hughes transaction. BHGE LLC owns the operating assets of GE Oil & Gas and Baker Hughes. BHGE LLC is a VIE as we hold an economic interest of approximately 62.5% in the partnership, but we hold no voting or participating rights through our direct economic ownership. BHGE LLC is a SEC Registrant with separate filing requirements with the SEC and its separate financial information can be obtained from www.sec.gov.

The remaining three joint ventures were formed as part of the Alstom acquisition. These joint ventures include grid technology, renewable energy, and global nuclear and French steam power and have combined assets, liabilities and redeemable non-controlling interest as of September 30, 2017 and December 31, 2016 of $16,282 million, $11,414 million and $3,106 million and $14,460 million, $9,922 million and $2,709 million, respectively. These joint ventures are considered VIEs because the equity held by Alstom does not participate fully in the earnings of the ventures due to contractual features allowing Alstom to sell their interests back to GE.

We consolidate these joint ventures because we control all their significant activities. These joint ventures are in all other repects regular businesses and are therefore exempt from ongoing disclosure requirements for consolidated VIEs provided below.

The table below provides information about consolidated VIEs that are subject to ongoing disclosure requirements. Substantially all of these entities were created to help our customers finance the purchase of GE goods and services or to purchase GE customer notes receivable arising from sales of GE goods and services. These entities have no features that could expose us to losses that could significantly exceed the difference between the consolidated assets and liabilities.
ASSETS AND LIABILITIES OF CONSOLIDATED VIEs
 
 
GE Capital
 
(In millions)
GE
Customer Notes receivables(a)
Other
Total
 
 
 
 
 
September 30, 2017
 
 
 
 
Assets
 
 
 
 
Financing receivables, net
$

$

$
919

$
919

Current receivables
49

557


606

Investment securities


965

965

Other assets
541

1,273

1,895

3,709

Total
$
590

$
1,830

$
3,779

$
6,199

 
 
 
 
 
Liabilities
 
 
 
 
Borrowings
$
71

$

$
1,078

$
1,149

Non-recourse borrowings

693

16

709

Other liabilities
411

1,053

1,546

3,010

Total
$
482

$
1,746

$
2,640

$
4,868

 
 
 
 
 
December 31, 2016
 
 
 
 
Assets
 
 
 
 
Financing receivables, net
$

$

$
1,035

$
1,035

Current receivables
57

670


727

Investment securities


982

982

Other assets
492

1,122

1,747

3,361

Total
$
549

$
1,792

$
3,764

$
6,105

 
 
 
 
 
Liabilities
 
 
 
 
Borrowings
$
1

$

$
818

$
819

Non-recourse borrowings

401

16

417

Other liabilities
457

1,378

1,482

3,317

Total
$
458

$
1,779

$
2,316

$
4,553

(a)
Two funding vehicles established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt.

Total revenues from our consolidated VIEs were $293 million and $211 million for the three months ended September 30, 2017 and 2016, respectively and $801 million and $881 million in the nine months ended September 30, 2017 and 2016, respectively. Related expenses consisted primarily of cost of goods and services of $78 million and $112 million for the three months ended September 30, 2017 and 2016, respectively and $256 million and $610 million in the nine months ended September 30, 2017 and 2016, respectively.

Where we provide servicing for third-party investors, we are contractually permitted to commingle cash collected from customers on financing receivables sold to third-party investors with our own cash prior to payment to third-party investors, provided our short-term credit rating does not fall below A-1/P1. These third-party investors also owe us amounts for purchased financial assets and scheduled interest and principal payments, At September 30, 2017 and December 31, 2016, the amounts of commingled cash owed to the third-party investors were $1,216 million and $1,117 million, respectively, and the amounts owed to us by third-party investors were zero and $5 million, respectively.

UNCONSOLIDATED VARIABLE INTEREST ENTITIES

We become involved with unconsolidated VIEs primarily through assisting in the formation and financing of the entity. We do not consolidate these entities because we do not have power over decisions that significantly affect their economic performance. Our investments in unconsolidated VIEs, at September 30, 2017 and December 31, 2016 were $6,382 million and $6,346 million, respectively. Substantially all of these investments are held by Energy Financial Services. Obligations to make additional investments in these entities are not significant.