12. SUPPLEMENTAL INFORMATION ABOUT THE CREDIT QUALITY OF FINANCING RECEIVABLES AND ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES

We provide further detailed information about the credit quality of our Commercial, Real Estate and Consumer financing receivables portfolios. For each portfolio, we describe the characteristics of the financing receivables and provide information about collateral, payment performance, credit quality indicators, and impairment. We manage these portfolios using delinquency and nonearning data as key performance indicators. The categories used within this section such as impaired loans, troubled debt restructuring (TDR) and nonaccrual financing receivables are defined by the authoritative guidance and we base our categorization on the related scope and definitions contained in the related standards. The categories of nonearning and delinquent are defined by us and are used in our process for managing our financing receivables. Definitions of these categories are provided in Note 1 in our 2011 consolidated financial statements.

The following table provides further information about general and specific reserves related to Commercial financing receivables.

	Financing receivables at
	March 31,		December 31,
(In millions)	2012		2011

CLL
Americas	$	79,645	$	80,505
Europe		35,613		36,899
Asia		11,048		11,635
Other		382		436
Total CLL		126,688		129,475

Energy Financial Services		5,287		5,912

GECAS		11,721		11,901

Other		681		1,282

Total Commercial financing receivables, before allowance for losses	$	144,377	$	148,570

Non-impaired financing receivables	$	138,464	$	142,908
General reserves		694		718

Impaired loans		5,913		5,662
Specific reserves		739		812

The following table displays payment performance of Commercial financing receivables.

	At
	March 31, 2012				December 31, 2011
	Over 30 days		Over 90 days		Over 30 days		Over 90 days
	past due		past due		past due		past due

CLL
Americas	1.1	%	0.7	%	1.3	%	0.8	%
Europe	4.4		2.4		3.8		2.1
Asia	1.2		0.6		1.3		1.0
Other	0.2		0.0		2.0		0.1
Total CLL	2.0		1.2		2.0		1.2

Energy Financial Services	0.3		0.3		0.3		0.3

GECAS	0.0		0.0		0.0		0.0

Other	6.4		6.1		3.7		3.5

Total	1.8		1.1		1.8		1.1

The following table provides further information about Commercial financing receivables that are classified as nonaccrual. Of our $4,939 million and $4,718 million of nonaccrual financing receivables at March 31, 2012 and December 31, 2011, respectively, $1,539 million and $1,227 million, respectively, are currently paying in accordance with their contractual terms.

	Nonaccrual financing						Nonearning financing
	receivables at						receivables at
	March 31,			December 31,			March 31,			December 31,
(Dollars in millions)	2012			2011			2012			2011

CLL
Americas	$	2,473		$	2,417		$	1,664		$	1,862
Europe		1,854			1,599			1,354			1,167
Asia		415			428			245			269
Other		64			68			9			11
Total CLL		4,806			4,512			3,272			3,309

Energy Financial Services		29			22			29			22

GECAS		17			69			17			55

Other		87			115			42			65
Total	$	4,939		$	4,718		$	3,360		$	3,451

Allowance for losses percentage		29.0	%		32.4	%		42.6	%		44.3	%

The following table provides information about loans classified as impaired and specific reserves related to Commercial.

	With no specific allowance						With a specific allowance
		Recorded	Unpaid		Average			Recorded	Unpaid				Average
	investment		principal		investment in		investment		principal		Associated		investment in
(In millions)	in loans		balance		loans		in loans		balance		allowance		loans

March 31, 2012

CLL
Americas	$	2,566	$	2,636	$	2,352	$	1,127	$	1,162	$	362	$	1,247
Europe		981		986		958		858		862		297		794
Asia		63		61		74		134		133		52		145
Other		62		69		58		0		0		0		5
Total CLL		3,672		3,752		3,442		2,119		2,157		711		2,191
Energy Financial Services		3		3		3		18		18		10		18
GECAS		14		14		21		0		0		0		0
Other		18		18		40		69		69		18		72
Total	$	3,707	$	3,787	$	3,506	$	2,206	$	2,244	$	739	$	2,281

December 31, 2011

CLL
Americas	$	2,136	$	2,219	$	2,128	$	1,367	$	1,415	$	425	$	1,468
Europe		936		1,060		1,001		730		717		263		602
Asia		85		83		94		156		128		84		214
Other		54		58		13		11		11		2		5
Total CLL		3,211		3,420		3,236		2,264		2,271		774		2,289
Energy Financial Services		4		4		20		18		18		9		87
GECAS		28		28		59		0		0		0		11
Other		62		63		67		75		75		29		97
Total	$	3,305	$	3,515	$	3,382	$	2,357	$	2,364	$	812	$	2,484

We recognized $57 million, $193 million and $42 million of interest income, including $23 million, $59 million and $10 million on a cash basis, for the three months ended March 31, 2012, the year ended December 31, 2011 and the three months ended March 31, 2011, respectively, principally in our CLL Americas business. The total average investment in impaired loans for the three months ended March 31, 2012 and the year ended December 31, 2011 was $5,787 million and $5,866 million, respectively.

Impaired loans classified as TDRs in our CLL business were $3,985 million and $3,642 million at March 31, 2012 and December 31, 2011, respectively, and were primarily attributable to CLL Americas ($3,017 million and $2,746 million, respectively). For the three months ended March 31, 2012, we modified $794 million of loans classified as TDRs, primarily in CLL Americas ($592 million) and CLL EMEA ($104 million). Changes to these loans primarily included debt to equity exchange, extensions, interest only payment periods and forbearance or other actions, which are in addition to, or sometimes in lieu of, fees and rate increases. Of our $2,384 million of modifications classified as TDRs in the last twelve months, $108 million have subsequently experienced a payment default in the last three months.

Substantially all of our Commercial financing receivables portfolio is secured lending and we assess the overall quality of the portfolio based on the potential risk of loss measure. The metric incorporates both the borrower's credit quality along with any related collateral protection.

Our internal risk ratings process is an important source of information in determining our allowance for losses and represents a comprehensive, statistically validated approach to evaluate risk in our financing receivables portfolios. In deriving our internal risk ratings, we stratify our Commercial portfolios into twenty-one categories of default risk and/or six categories of loss given default to group into three categories: A, B and C. Our process starts by developing an internal risk rating for our borrowers, which are based upon our proprietary models using data derived from borrower financial statements, agency ratings, payment history information, equity prices and other commercial borrower characteristics. We then evaluate the potential risk of loss for the specific lending transaction in the event of borrower default, which takes into account such factors as applicable collateral value, historical loss and recovery rates for similar transactions, and our collection capabilities. Our internal risk ratings process and the models we use are subject to regular monitoring and validation controls. The frequency of rating updates is set by our credit risk policy, which requires annual Audit Committee approval. The models are updated on a regular basis and statistically validated annually, or more frequently as circumstances warrant.

The table below summarizes our Commercial financing receivables by risk category. As described above, financing receivables are assigned one of twenty-one risk ratings based on our process and then these are grouped by similar characteristics into three categories in the table below. Category A is characterized by either high credit quality borrowers or transactions with significant collateral coverage which substantially reduces or eliminates the risk of loss in the event of borrower default. Category B is characterized by borrowers with weaker credit quality than those in Category A, or transactions with moderately strong collateral coverage which minimizes but may not fully mitigate the risk of loss in the event of default. Category C is characterized by borrowers with higher levels of default risk relative to our overall portfolio or transactions where collateral coverage may not fully mitigate a loss in the event of default.

	Secured
(In millions)	A		B		C		Total

March 31, 2012

CLL
Americas	$	73,845	$	1,967	$	3,833	$	79,645
Europe		32,060		1,182		1,228		34,470
Asia		10,196		108		572		10,876
Other		295		0		87		382
Total CLL		116,396		3,257		5,720		125,373

Energy Financial Services		5,010		69		82		5,161

GECAS		11,226		447		48		11,721

Other		681		0		0		681
Total	$	133,313	$	3,773	$	5,850	$	142,936

December 31, 2011

CLL
Americas	$	73,103	$	2,816	$	4,586	$	80,505
Europe		33,481		1,080		1,002		35,563
Asia		10,644		116		685		11,445
Other		345		0		91		436
Total CLL		117,573		4,012		6,364		127,949

Energy Financial Services		5,727		24		18		5,769

GECAS		10,881		970		50		11,901

Other		1,282		0		0		1,282
Total	$	135,463	$	5,006	$	6,432	$	146,901

For our secured financing receivables portfolio, our collateral position and ability to work out problem accounts mitigates our losses. Our asset managers have deep industry expertise that enables us to identify the optimum approach to default situations. We price risk premiums for weaker credits at origination, closely monitor changes in creditworthiness through our risk ratings and watch list process, and are engaged early with deteriorating credits to minimize economic loss. Secured financing receivables within risk Category C are predominantly in our CLL businesses and are primarily composed of senior term lending facilities and factoring programs secured by various asset types including inventory, accounts receivable, cash, equipment and related business facilities as well as franchise finance activities secured by underlying equipment.

Loans within Category C are reviewed and monitored regularly, and classified as impaired when it is probable that they will not pay in accordance with contractual terms. Our internal risk rating process identifies credits warranting closer monitoring; and as such, these loans are not necessarily classified as nonearning or impaired.

Substantially all of our unsecured Commercial financing receivables portfolio is attributable to our Interbanca S.p.A. and GE Sanyo Credit acquisitions in Europe and Asia, respectively. At March 31, 2012 and December 31, 2011, these financing receivables included $308 million and $325 million rated A, $697 million and $748 million rated B, and $436 million and $596 million rated C, respectively.

The following table provides further information about general and specific reserves related to Real Estate financing receivables.

	Financing receivables at
		March 31,		December 31,
(In millions)		2012		2011

Debt	$	23,518	$	24,501
Business Properties		8,013		8,248

Total Real Estate financing receivables, before allowance for losses	$	31,531	$	32,749

Non-impaired financing receivables	$	23,292	$	24,002
General reserves		255		267

Impaired loans		8,239		8,747
Specific reserves		674		822

The following table displays payment performance of Real Estate financing receivables.

	At
		March 31, 2012					December 31, 2011
		Over 30 days		Over 90 days			Over 30 days		Over 90 days
		past due		past due			past due		past due

Debt		2.8	%		2.3	%	2.4	%		2.3	%
Business Properties		3.7			3.0		3.9			3.0
Total		3.1			2.5		2.8			2.5

The following table provides further information about Real Estate financing receivables that are classified as nonaccrual. Of our $6,551 million and $6,949 million of nonaccrual financing receivables at March 31, 2012 and December 31, 2011, respectively, $5,575 million and $6,061 million, respectively, are currently paying in accordance with their contractual terms.

	Nonaccrual financing						Nonearning financing
	receivables at						receivables at
	March 31,			December 31,			March 31,			December 31,
(Dollars in millions)	2012			2011			2012			2011

Debt	$	6,010		$	6,351		$	522		$	541
Business Properties		541			598			239			249
Total	$	6,551		$	6,949		$	761		$	790

Allowance for losses percentage		14.2	%		15.7	%		122.1	%		137.8	%

The following table provides information about loans classified as impaired and specific reserves related to Real Estate.

	With no specific allowance						With a specific allowance
	Recorded		Unpaid		Average		Recorded		Unpaid				Average
	investment		principal		investment		investment		principal		Associated		investment
(In millions)	in loans		balance		in loans		in loans		balance		allowance		in loans

March 31, 2012

Debt	$	3,752	$	3,803	$	3,655	$	3,914	$	3,993	$	585	$	4,237
Business Properties		201		201		217		372		372		89		385
Total	$	3,953	$	4,004	$	3,872	$	4,286	$	4,365	$	674	$	4,622

December 31, 2011

Debt	$	3,558	$	3,614	$	3,568	$	4,560	$	4,652	$	717	$	5,435
Business Properties		232		232		215		397		397		105		460
Total	$	3,790	$	3,846	$	3,783	$	4,957	$	5,049	$	822	$	5,895

We recognized $90 million, $399 million and $105 million of interest income, including $68 million, $339million and $105 million on a cash basis, for the three months ended March 31, 2012, the year ended December 31, 2011 and the three months ended March 31, 2011, respectively, principally in our Real Estate-Debt portfolio. The total average investment in impaired loans for the three months ended March 31, 2012 and the year ended December 31, 2011 was $8,494 million and $9,678 million, respectively.

Real Estate TDRs decreased from $7,006 million at December 31, 2011 to $6,606 million at March 31, 2012, primarily driven by resolution of TDRs through paydowns, restructurings and foreclosures, partially offset by extensions of loans scheduled to mature during 2012, some of which were classified as TDRs upon modification. We deem loan modifications to be TDRs when we have granted a concession to a borrower experiencing financial difficulty and we do not receive adequate compensation in the form of an effective interest rate that is at current market rates of interest given the risk characteristics of the loan or other consideration that compensates us for the value of the concession. The limited liquidity and higher return requirements in the real estate market for loans with higher loan-to-value (LTV) ratios has typically resulted in the conclusion that the modified terms are not at current market rates of interest, even if the modified loans are expected to be fully recoverable. For the three months ended March 31, 2012, we modified $1,067 million of loans classified as TDRs, substantially all in our Debt portfolio. Changes to these loans primarily included maturity extensions, principal payment acceleration, changes to collateral or covenant terms and cash sweeps, which are in addition to, or sometimes in lieu of, fees and rate increases. Of our $3,107 million of modifications classified as TDRs in the last twelve months, $183 million have subsequently experienced a payment default in the last three months.

Due to the primarily non-recourse nature of our Debt portfolio, loan-to-value ratios provide the best indicators of the credit quality of the portfolio. By contrast, the credit quality of the Business Properties portfolio is primarily influenced by the strength of the borrower's general credit quality, which is reflected in our internal risk rating process, consistent with the process we use for our Commercial portfolio.

	Loan-to-value ratio at
	March 31, 2012						December 31, 2011
	Less than		80% to		Greater than		Less than		80% to		Greater than
(In millions)	80%		95%		95%		80%		95%		95%

Debt	$	14,041	$	4,578	$	4,899	$	14,454	$	4,593	$	5,454

	Internal Risk Rating at
	March 31, 2012						December 31, 2011
(In millions)	A		B		C		A		B		C

Business Properties	$	7,489	$	102	$	422	$	7,628	$	110	$	510

Within Real Estate-Debt, these financing receivables are primarily concentrated in our North American and European Lending platforms and are secured by various property types. A substantial majority of the Real Estate-Debt financing receivables with loan-to-value ratios greater than 95% are paying in accordance with contractual terms. Substantially all of these loans and substantially all of the Real Estate-Business Properties financing receivables included in Category C are impaired loans which are subject to the specific reserve evaluation process described in Note 1 in our 2011 consolidated financial statements. The ultimate recoverability of impaired loans is driven by collection strategies that do not necessarily depend on the sale of the underlying collateral and include full or partial repayments through third-party refinancing and restructurings.

At March 31, 2012, our U.S. consumer financing receivables included private-label credit card and sales financing for approximately 51 million customers across the U.S. with no metropolitan area accounting for more than 6% of the portfolio. Of the total U.S. consumer financing receivables, approximately 64% relate to credit card loans, which are often subject to profit and loss sharing arrangements with the retailer (which are recorded in revenues), and the remaining 36% are sales finance receivables, which provide financing to customers in areas such as electronics, recreation, medical and home improvement.

The following table provides further information about general and specific reserves related to Consumer financing receivables.

	Financing receivables at
	March 31,		December 31,
(In millions)	2012		2011

Non-U.S. residential mortgages	$	35,257	$	35,550
Non-U.S. installment and revolving credit		18,963		18,544
U.S. installment and revolving credit		44,283		46,689
Non-U.S. auto		5,166		5,691
Other		7,520		7,244
Total Consumer financing receivables, before allowance for losses	$	111,189	$	113,718

Non-impaired financing receivables	$	108,172	$	110,825
General reserves		2,692		2,891

Impaired loans		3,017		2,893
Specific reserves		660		680

The following table displays payment performance of Consumer financing receivables.

	At
	March 31, 2012				December 31, 2011
	Over 30 days		Over 90 days		Over 30 days		Over 90 days
	past due		past due(a)		past due		past due(a)

Non-U.S. residential mortgages	12.0	%	8.0	%	12.3	%	7.9	%
Non-U.S. installment and revolving credit	4.3		1.2		4.1		1.2
U.S. installment and revolving credit	4.4		2.0		5.0		2.2
Non-U.S. auto	3.2		0.5		3.1		0.5
Other	3.3		1.9		3.5		2.0
Total	6.7		3.7		6.9		3.7

The following table provides further information about Consumer financing receivables that are classified as nonaccrual.

	Nonaccrual financing						Nonearning financing
	receivables at						receivables at
	March 31,			December 31,			March 31,			December 31,
(Dollars in millions)	2012			2011			2012			2011

Non-U.S. residential mortgages	$	2,975		$	2,995		$	2,863		$	2,870
Non-U.S. installment and revolving credit		253			321			253			263
U.S. installment and revolving credit		876			990			876			990
Non-U.S. auto		30			43			30			43
Other		477			487			381			419
Total	$	4,611		$	4,836		$	4,403		$	4,585

Allowance for losses percentage		72.7	%		73.8	%		76.1	%		77.9	%

The vast majority of our Consumer nonaccrual financing receivables are smaller balance homogeneous loans evaluated collectively, by portfolio, for impairment and therefore are outside the scope of the disclosure requirement for impaired loans. Accordingly, impaired loans in our Consumer business represent restructured smaller balance homogeneous loans meeting the definition of a TDR, and are therefore subject to the disclosure requirement for impaired loans, and commercial loans in our Consumer–Other portfolio. The recorded investment of these impaired loans totaled $3,017 million (with an unpaid principal balance of $2,984 million) and comprised $109 million with no specific allowance, primarily all in our Consumer–Other portfolio, and $2,908 million with a specific allowance of $660 million at March 31, 2012. The impaired loans with a specific allowance included $314 million with a specific allowance of $100 million in our Consumer–Other portfolio and $2,594 million with a specific allowance of $560 million across the remaining Consumer business and had an unpaid principal balance and average investment of $2,882 million and $2,866 million, respectively, at March 31, 2012. We recognized $43 million, $141 million and $32 million of interest income, including $4 million, $15 million and $1 million on a cash basis, for the three months ended March 31, 2012, the year ended December 31, 2011 and the three months ended March 31, 2011, respectively, principally in our Consumer-U.S. installment and revolving credit portfolios. The total average investment in impaired loans for the three months ended March 31, 2012 and the year ended December 31, 2011 was $2,955 million and $2,623 million, respectively.

Impaired loans classified as TDRs in our Consumer business were $2,888 million and $2,723 million at March 31, 2012 and December 31, 2011, respectively. We utilize certain loan modification programs for borrowers experiencing financial difficulties in our Consumer loan portfolio. These loan modification programs primarily include interest rate reductions and payment deferrals in excess of three months, which were not part of the terms of the original contract, and are primarily concentrated in our non-U.S. residential mortgage and U.S. credit card portfolios. For the three months ended March 31, 2012, we modified $503 million of consumer loans for borrowers experiencing financial difficulties, which are classified as TDRs, and included $346 million of non-U.S. consumer loans, primarily residential mortgages, credit cards and personal loans and $157 million of U.S. consumer loans, primarily credit cards. We expect borrowers whose loans have been modified under these programs to continue to be able to meet their contractual obligations upon the conclusion of the modification. Of our $2,073 million of modifications classified as TDRs in the last twelve months, $168 million have subsequently experienced a payment default in the last three months, primarily in our installment and revolving credit portfolios.

Our Consumer financing receivables portfolio comprises both secured and unsecured lending. Secured financing receivables comprise residential loans and lending to small and medium-sized enterprises predominantly secured by auto and equipment, inventory finance, and cash flow loans. Unsecured financing receivables include private-label credit card financing. A substantial majority of these cards are not for general use and are limited to the products and services sold by the retailer. The private label portfolio is diverse with no metropolitan area accounting for more than 5% of the related portfolio.

For our secured non-U.S. residential mortgage book, we assess the overall credit quality of the portfolio through loan-to-value ratios (the ratio of the outstanding debt on a property to the value of that property at origination). In the event of default and repossession of the underlying collateral, we have the ability to remarket and sell the properties to eliminate or mitigate the potential risk of loss. The table below provides additional information about our non-U.S. residential mortgages based on loan-to-value ratios.

	Loan-to-value ratio at
	March 31, 2012						December 31, 2011
	80% or		Greater than		Greater than		80% or		Greater than		Greater than
(In millions)	less		80% to 90%		90%		less		80% to 90%		90%

Non-U.S. residential mortgages	$	19,670	$	6,061	$	9,526	$	19,834	$	6,087	$	9,629

The majority of these financing receivables are in our U.K. and France portfolios and have re-indexed loan-to-value ratios of 84% and 56%, respectively. We have third-party mortgage insurance for approximately 69% of the balance of Consumer non-U.S. residential mortgage loans with loan-to-value ratios greater than 90% at March 31, 2012. Such loans were primarily originated in the U.K., Poland and France.

For our unsecured lending products, including the non-U.S. and U.S. installment and revolving credit and non-U.S. auto portfolios, we assess overall credit quality using internal and external credit scores. Our internal credit scores imply a probability of default which we consistently translate into three approximate credit bureau equivalent credit score categories, including (a) 681 or higher, which are considered the strongest credits; (b) 615 to 680, considered moderate credit risk; and (c) 614 or less, which are considered weaker credits.

	Internal ratings translated to approximate credit bureau equivalent score at
	March 31, 2012						December 31, 2011
	681 or		615 to		614 or		681 or		615 to		614 or
(In millions)	higher		680		less		higher		680		less

Non-U.S. installment and
revolving credit	$	10,391	$	4,765	$	3,807	$	9,913	$	4,838	$	3,793
U.S. installment and
revolving credit		26,917		9,220		8,146		28,918		9,398		8,373
Non-U.S. auto		3,705		903		558		3,927		1,092		672

Of those financing receivable accounts with credit bureau equivalent scores of 614 or less at March 31, 2012, 96% relate to installment and revolving credit accounts. These smaller balance accounts have an average outstanding balance less than one thousand U.S. dollars and are primarily concentrated in our retail card and sales finance receivables in the U.S. (which are often subject to profit and loss sharing arrangements), and closed-end loans outside the U.S., which minimizes the potential for loss in the event of default. For lower credit scores, we adequately price for the incremental risk at origination and monitor credit migration through our risk ratings process. We continuously adjust our credit line underwriting management and collection strategies based on customer behavior and risk profile changes.

Secured lending in Consumer – Other comprises loans to small and medium-sized enterprises predominantly secured by auto and equipment, inventory finance and cash flow loans. We develop our internal risk ratings for this portfolio in a manner consistent with the process used to develop our Commercial credit quality indicators, described above. We use the borrower's credit quality and underlying collateral strength to determine the potential risk of loss from these activities.

At March 31, 2012, Consumer – Other financing receivables of $6,170 million, $429 million and $921 million were rated A, B, and C, respectively. At December 31, 2011, Consumer – Other financing receivables of $5,580 million, $757 million and $907 million were rated A, B, and C, respectively.