XML 52 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
 
June 30, 2018
December 31, 2017
 
Level 1
Level 2
Level 3
Net Balance
Level 1
Level 2
Level 3
Net Balance
Assets
 

 

 

 
 
 
 
 
Derivatives
$
—

$
221

$
—

$
221

$
—

$
150

$
—

$
150

   Investment securities
66

—

310

376

81

8

304

393

Total assets
66

221

310

597

81

158

304

543

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Derivatives
—

(248
)
—

(248
)
—

(95
)
—

(95
)
Total liabilities
$
—

$
(248
)
$
—

$
(248
)
$
—

$
(95
)
$
—

$
(95
)
Reconciliation of recurring Level 3 fair value measurements
The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:
Balance at December 31, 2017
$
304

Purchases
36

Proceeds at maturity
(30
)
Balance at June 30, 2018
$
310
Schedule of investment securities classified as available for sale
At June 30, 2018 and December 31, 2017, we held $156 million and $127 million, respectively, of these investment securities on behalf of GE.
 
June 30, 2018
December 31, 2017
 
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
Investment securities
 

 

 

 
 

 

 

 
  Non-U.S. debt securities
$
309

$
1

$
—

$
310

$
310

$
2

$
—

$
312

  Equity securities
66

—

—

66

81

—

—

81

Total
$
375

$
1

$
—

$
376

$
391

$
2

$
—

$
393
Schedule of derivatives
The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
 
June 30, 2018
December 31, 2017
 
Assets
(Liabilities)
Assets
(Liabilities)
Derivatives accounted for as hedges
 
 
 
 
Currency exchange contracts
$
2

$
(1
)
$
6

$
—

 
 
 
 
 
Derivatives not accounted for as hedges
 
 
 
 
Currency exchange contracts
219

(247
)
144

(95
)
Total derivatives
$
221

$
(248
)
$
150

$
(95
)
Carrying amount related to derivatives
The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements.
Carrying amount related to derivatives
June 30, 2018
December 31, 2017
Derivative assets
$
221

$
150

Derivative liabilities
(248
)
(95
)
Net derivatives
$
(27
)
$
55
Carrying amount related to derivatives
The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements.
Carrying amount related to derivatives
June 30, 2018
December 31, 2017
Derivative assets
$
221

$
150

Derivative liabilities
(248
)
(95
)
Net derivatives
$
(27
)
$
55
Effect of derivatives on earnings
The table below summarizes these offsets and the net effect on pre-tax earnings.
 
Three Months Ended June 30,
Six Months Ended June 30,
 
Cash Flow Hedges
Economic Hedges
Cash Flow Hedges
Economic Hedges
 
2018
2017
2018
2017
2018
2017
2018
2017
Effect on hedging instrument
$
(7
)
$
4

$
(10
)
$
9

$
1

$
2

$
7

$
1

Effect on underlying
7

(4
)
(9
)
(9
)
(1
)
(2
)
(24
)
—

Effect on earnings (1)
$
—

$
—

$
(19
)
$
—

$
—

$
—

$
(17
)
$
1

(1) 
For cash flow hedges, the effect on earnings, if any, is primarily related to ineffectiveness. For economic hedges on forecasted transactions, the effect on earnings is substantially offset by future earnings on economically hedged items.
Schedule of hedging instrument, currency exchange contract
The table below summarizes this activity by hedging instrument.
 
Three Months Ended June 30,
Six Months Ended June 30,
 
Gain (Loss) Recognized in AOCI
Gain (Loss) Reclassified from AOCI to Earnings
Gain (Loss) Recognized in AOCI
Gain (Loss) Reclassified from AOCI to Earnings
 
2018
2017
2018
2017
2018
2017
2018
2017
Currency exchange contracts
$
(7
)
$
4

$
—

$
(2
)
$
1

$
2

$
—

$
(8
)