We securitize financial assets and arrange other forms of asset-backed financing in the ordinary course of business. The securitization transactions we engage in are similar to those used by many financial institutions. Beyond improving returns, these securitization transactions serve as alternative funding sources for a variety of diversified lending and securities transactions. Historically, we have used both GECC-supported and third-party VIEs to execute off-balance sheet securitization transactions funded in the commercial paper and term markets. The largest group of VIEs that we are involved with are former Qualified Special Purpose Entities (QSPEs), which under guidance in effect through December 31, 2009 were excluded from the scope of consolidation standards based on their characteristics. Except as noted below, investors in these entities only have recourse to the assets owned by the entity and not to our general credit. We do not have implicit support arrangements with any VIE. We did not provide non-contractual support for previously transferred financing receivables to any VIE in 2011 or 2010.

In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity's economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity's future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity's design, including: the entity's capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment.

We consolidate VIEs because we have the power to direct the activities that significantly affect the VIE's economic performance, typically because of our role as either servicer or manager for the VIE. As more fully described in Note 17 in our 2010 consolidated financial statements, our consolidated VIEs fall into three main groups: (1) Trinity, a group of sponsored special purpose entities that holds investment securities funded by the issuance of GICs; (2) Consolidated Securitization Entities, primarily former QSPEs that were created to facilitate securitization of financial assets and other forms of asset-backed financing; and (3) Other consolidated VIEs, primarily asset-backed financing entities where we are the collateral manager, joint ventures and insurance entities. The table below summarizes the assets and liabilities of these entities.

			Consolidated Securitization Entities (a)

			Credit						Trade
(In millions)	Trinity(b)		Cards(c)		Equipment(d)		Real Estate		Receivables		Other(d)		Total

September 30, 2011
Assets(e)
Financing receivables, net	$	0	$	17,272	$	10,217	$	3,764	$	2,722	$	3,006	$	36,981
Investment securities		4,624		0		0		0		0		0		4,624
Other assets		352		18		251		213		0		1,780		2,614
Total	$	4,976	$	17,290	$	10,468	$	3,977	$	2,722	$	4,786	$	44,219

Liabilities(e)
Borrowings	$	0	$	0	$	137	$	25	$	0	$	823	$	985
Non-recourse borrowings		0		12,934		8,236		3,882		2,449		1,021		28,522
Other liabilities		4,920		54		30		3		360		290		5,657
Total	$	4,920	$	12,988	$	8,403	$	3,910	$	2,809	$	2,134	$	35,164

December 31, 2010
Assets(e)
Financing receivables, net	$	0	$	20,570	$	9,431	$	4,233	$	1,882	$	3,356	$	39,472
Investment securities		5,706		0		0		0		0		0		5,706
Other assets		283		17		234		209		99		2,047		2,889
Total	$	5,989	$	20,587	$	9,665	$	4,442	$	1,981	$	5,403	$	48,067

Liabilities(e)
Borrowings	$	0	$	0	$	184	$	25	$	0	$	906	$	1,115
Non-recourse borrowings		0		12,824		8,091		4,294		2,970		1,265		29,444
Other liabilities		5,690		132		8		4		0		243		6,077
Total	$	5,690	$	12,956	$	8,283	$	4,323	$	2,970	$	2,414	$	36,636

Revenues from services from our consolidated VIEs were $1,426 million and $1,535 million in the three months ended September 30, 2011 and 2010, respectively, and $4,311 million and $5,112 million in the nine months ended September 30, 2011 and 2010, respectively. Related expenses consisted primarily of provisions for losses of $332 million and $460 million in the three months ended September 30, 2011 and 2010, respectively, and $882 million and $1,207 million in the nine months ended September 30, 2011 and 2010, respectively, and interest of $143 million and $176 million in the three months ended September 30, 2011 and 2010, respectively, and $450 million and $591 million in the nine months ended September 30, 2011 and 2010, respectively. These amounts do not include intercompany revenues and costs, principally fees and interest between GECS and the VIEs, which are eliminated in consolidation.

Our involvement with unconsolidated VIEs consists of the following activities: assisting in the formation and financing of the entity, providing recourse and/or liquidity support, servicing the assets and receiving variable fees for services provided. We are not required to consolidate these entities because the nature of our involvement with the activities of the VIEs does not give us power over decisions that significantly affect their economic performance.

The largest unconsolidated VIE with which we are involved is Penske Truck Leasing (PTL), a joint venture and limited partnership formed in 1988 between Penske Truck Leasing Corporation (PTLC) and GE. PTLC is the sole general partner of PTL and an indirect wholly-owned subsidiary of Penske Corporation. PTL is engaged in truck leasing and support services, including full-service leasing, dedicated logistics support and contract maintenance programs, as well as rental operations serving commercial and consumer customers. At September 30, 2011, our investment of $6,717 million primarily comprised a 49.9% partnership interest of $864 million and loans and advances of $5,817 million. GECC continues to provide loans under long-term revolving credit and letter of credit facilities to PTL.

Other significant exposures to unconsolidated VIEs at September 30, 2011 include investments in real estate entities ($1,920 million), which generally consist of passive limited partnership investments in tax-advantaged, multi-family real estate and investments in various European real estate entities; debt investment fund ($2,715 million); and exposures to joint ventures that purchase factored receivables ($2,617 million). The vast majority of our other unconsolidated entities consist of passive investments in various asset-backed financing entities.

The classification of our variable interests in these entities in our financial statements is based on the nature of the entity and the type of investment we hold. Variable interests in partnerships and corporate entities are classified as either equity method or cost method investments. In the ordinary course of business, we also make investments in entities in which we are not the primary beneficiary but may hold a variable interest such as limited partner interests or mezzanine debt investments. These investments are classified in two captions in our financial statements: “Other assets” for investments accounted for under the equity method, and “Financing receivables – net” for debt financing provided to these entities. Our investments in unconsolidated VIEs at September 30, 2011 and December 31, 2010 follow.

	At
	September 30, 2011						December 31, 2010
(In millions)	PTL		All other		Total		PTL		All other		Total

Other assets and investment
securities	$	6,717	$	5,440	$	12,157	$	5,790	$	4,580	$	10,370
Financing receivables – net		–		1,905		1,905		–		2,240		2,240
Total investments		6,717		7,345		14,062		5,790		6,820		12,610
Contractual obligations to fund
investments or guarantees		600		2,961		3,561		600		1,981		2,581
Revolving lines of credit		1,615		106		1,721		2,431		–		2,431
Total	$	8,932	$	10,412	$	19,344	$	8,821	$	8,801	$	17,622

In addition to the entities included in the table above, we also hold passive investments in RMBS, commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS) issued by VIEs. Such investments were, by design, investment grade at issuance and held by a diverse group of investors. Further information about such investments is provided in Note 3.