SHORT-TERM BORROWINGS

		2006						2005
December 31 (Dollars in millions)	Amount			Average rate(a)			Amount			Average rate(a)
GE
Commercial paper
U.S.		$ 1,097			5.35	%		$ 497			4.40	%
Non-U.S.		1			3.74			1			2.85
Payable to banks		319			5.61			358			3.99
Current portion of long-term debt		32			5.32			129			4.84
Other		763						142
		2,212						1,127
GECS
Commercial paper
U.S.
Unsecured		67,423			5.37			67,643			4.30
Asset-backed(b)		6,430			5.35			9,267			4.21
Non-U.S.		26,328			4.38			20,456			3.47
Current portion of long-term debt(c)(d)		44,553			4.86			41,792			4.05
GE Interest Plus notes(e)		9,161			5.43			7,708			4.35
Other		19,421						10,806
		173,316						157,672
Eliminations		(3,375	)					(643)
Total		$ 172,153						$ 158,156

(a)	Based on year-end balances and year-end local currency interest rates. Current portion of long-term debt included the effects of related interest rate and currency swaps, if any, directly associated with the original debt issuance.
(b)	Entirely obligations of consolidated, liquidating securitization entities. See note 28.
(c)	Included short-term borrowings by consolidated, liquidating securitization entities of $697 million at December 31, 2005, which matured in 2006. See note 28.
(d)	Included $250 million of subordinated notes guaranteed by GE at December 31, 2005, which matured in 2006.
(e)	Entirely variable denomination floating rate notes.

Long-term borrowings

December 31 (Dollars in millions)	2006 Average rate (a)			Maturities				2006			2005
GE
Senior notes		5.06	%		2008–2013			$ 6,488			$ 6,486
Industrial development/pollution control bonds		4.11			2011–2027			307			299
Payable to banks, principally U.S.		5.68			2008–2015			1,836			1,912
Other(b)								454			384
								9,085			9,081
GECS
Senior notes
Unsecured		4.95			2008–2055			235,952			180,546
Asset-backed(c)		5.83			2008–2035			5,810			6,845
Extendible notes		5.32			2009–2011			6,000			14,022
Subordinated notes(d)		5.92			2009–2066			5,201			2,984
								252,963			204,397
ELIMINATIONS								(1,244	)		(1,197)
Total								$ 260,804			$ 212,281

(a)	Based on year-end balances and year-end local currency interest rates, including the effects of related interest rate and currency swaps, if any, directly associated with the original debt issuance.
(b)	A variety of obligations having various interest rates and maturities, including certain borrowings by parent operating components and affiliates.
(c)	Included $4,684 million and $6,845 million of asset-backed senior notes, issued by consolidated, liquidating securitization entities at December 31, 2006 and 2005, respectively. See note 28.
(d)	Included $750 million of subordinated notes guaranteed by GE at December 31, 2006 and 2005.

Our borrowings are addressed below from the perspectives of liquidity, interest rate and currency risk management. Additional information about borrowings and associated swaps can be found in note 27.

LIQUIDITY is affected by debt maturities and our ability to repay or refinance such debt. Long-term debt maturities over the next five years follow.

(In millions)		2007			2008			2009			2010			2011
GE		$ 32			$ 1,572			$ 1,716		nbsp;	$ 42			$ 39
GECS		44,522	(a)		53,282	(b)		44,069			34,175			20,889

(a)	Floating rate extendible notes of $256 million are due in 2007, but are extendible at the option of the investors to a final maturity in 2008. Fixed and floating rate notes of $975 million contain put options with exercise dates in 2007, and which have final maturity dates in 2008 ($350 million), 2009 ($100 million) and beyond 2012 ($525 million).
(b)	Floating rate extendible notes of $6,000 million are due in 2008, of which $2,000 million are extendible at the option of the investors to a final maturity in 2009, and $4,000 million are extendible to a final maturity in 2011.

Committed credit lines totaling $59.9 billion had been extended to us by 75 banks at year-end 2006. Included in this amount was $50.4 billion provided directly to GECS and $9.5 billion provided by 16 banks to GE, to which GECS also has access. The GECS lines include $28.6 billion of revolving credit agreements under which we can borrow funds for periods exceeding one year. The remaining $31.3 billion are 364-day lines of which $31.2 billion contain a term-out feature that allows GE or GECS to extend the borrowings for one year from the date of expiration of the lending agreement. We pay banks for credit facilities, but compensation amounts were insignificant in each of the past three years.

INTEREST RATE AND CURRENCY RISK is managed through the direct issuance of debt or use of derivatives. We take positions in view of anticipated behavior of assets, including prepayment behavior. We use a variety of instruments, including interest rate and currency swaps and currency forwards, to achieve our interest rate objectives.

The following table provides additional information about derivatives designated as hedges of borrowings in accordance with SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended.

Derivative fair values by activity/instrument

December 31 (In millions)	2006			2005
Cash flow hedges		$ 763			$ 726
Fair value hedges		(147	)		(39	)
Total		$ 616			$ 687
Interest rate swaps		$ (860	)		$ (423	)
Currency swaps		1,476			1,110
Total		$ 616			$ 687

We regularly assess the effectiveness of all other hedge positions using a variety of techniques, including cumulative dollar offset and regression analysis, depending on which method was selected at inception of the respective hedge. Adjustments related to fair value hedges decreased the carrying amount of debt outstanding at December 31, 2006, by $111 million. At December 31, 2006, the maximum term of derivative instruments that hedge forecasted transactions was 29 years and related to hedges of long-term, non-U.S. dollar denominated fixed rate debt. See note 27.

Back to top

Previous  Next