GE 2012 Annual Report Download - page 87

GE 2012 ANNUAL REPORT 85
notes to consolidated financial statements
Note 2.
Assets and Liabilities of Businesses Held for Sale and
Discontinued Operations
Assets and Liabilities of Businesses Held for Sale
In the third quarter of 2012, we completed the sale of our CLL
business in South Korea for proceeds of $168 million.
In the second quarter of 2012, we committed to sell a por-
tion of our Business Properties portfolio (Business Property) in
Real Estate, including certain commercial loans, the origination
and servicing platforms and the servicing rights on loans previ-
ously securitized by GECC. We completed the sale of Business
Property on October 1, 2012 for proceeds of $2,406 million. We
deconsolidated substantially all Real Estate securitization entities
in the fourth quarter of 2012 as servicing rights related to these
entities were transferred to the buyer at closing.
Summarized financial information for businesses held for sale
is shown below.
December 31 (In millions) 2012 2011
ASSETS
Cash and equivalents $ 74 $149
Financing receivables—net 47 412
Property, plant and equipment—net 31 81
Other 59 69
Assets of businesses held for sale $211 $711
LIABILITIES
Short-term borrowings $138 $252
Other 19 93
Liabilities of businesses held for sale $157 $345
NBCU
In December 2009, we entered into an agreement with Comcast
Corporation (Comcast) to transfer the assets of the NBCU busi-
ness to a newly formed entity, comprising our NBCU business
and Comcast’s cable networks, regional sports networks, certain
digital properties and certain unconsolidated investments, in
exchange for cash and a 49% interest in the newly formed entity.
On March 19, 2010, NBCU entered into a three-year credit
agreement and a 364-day bridge loan agreement. On April 30,
2010, NBCU issued $4,000 million of senior, unsecured notes with
maturities ranging from 2015 to 2040 (interest rates ranging from
3.65% to 6.40%). On October 4, 2010, NBCU issued $5,100 million
of senior, unsecured notes with maturities ranging from 2014 to
2041 (interest rates ranging from 2.10% to 5.95%). Subsequent
to these issuances, the credit agreement and bridge loan agree-
ments were terminated, with a $750 million revolving credit
agreement remaining in effect. Proceeds from these issuances
were used to repay $1,678 million of existing debt and pay a divi-
dend of $7,394 million to GE.
On September 26, 2010, we acquired approximately 38% of
Vivendi S.A.’s (Vivendi) 20% interest in NBCU (7.7% of NBCU’s
outstanding shares) for $2,000 million. In January 2011 and prior
to the transaction with Comcast, we acquired the remaining
Vivendi interest in NBCU (12.3% of NBCU’s outstanding shares) for
$3,673 million and made an additional payment of $222 million
related to the previously purchased shares.
On January 28, 2011, we transferred the assets of the NBCU
business and Comcast transferred certain of its assets to a newly
formed entity, NBCUniversal LLC (NBCU LLC). In connection with
the transaction, we received $6,176 million in cash from Comcast
(which included $49 million of transaction-related cost reim-
bursements) and a 49% interest in NBCU LLC. Comcast holds the
remaining 51% interest in NBCU LLC.
In connection with the transaction, we also entered into a
number of agreements with Comcast governing the opera-
tion of the venture and transitional services, employee, tax and
other matters. In addition, Comcast is obligated to share with
us potential tax savings associated with Comcast’s purchase of
its NBCU LLC member interest, if realized. We did not recognize
these potential future payments as consideration for the sale, but
will record such payments in income as they are received.
Following the transaction, we deconsolidated NBCU and
we account for our investment in NBCU LLC under the equity
method. We recognized a pre-tax gain on the sale of $3,705 mil-
lion ($526 million after tax). In connection with the sale, we
recorded income tax expense of $3,179 million, reflecting the low
tax basis in our investment in the NBCU business and the recog-
nition of deferred tax liabilities related to our 49% investment in
NBCU LLC. As our investment in NBCU LLC is structured as a part-
nership for U.S. tax purposes, U.S. taxes are recorded separately
from the equity investment.
At December 31, 2012 and December 31, 2011, the carrying
amount of our equity investment in NBCU LLC was $18,887 million
and $17,955 million, respectively, reported in the “All other assets”
caption in our Statement of Financial Position. At December 31,
2012 and December 31, 2011, deferred tax liabilities related to
our NBCU LLC investment were $4,937 million and $4,699 million,
respectively, and were reported in the “Deferred income taxes”
caption in our Statement of Financial Position.
On February 12, 2013, we entered into an agreement with
Comcast to sell our remaining 49% common equity interest in
NBCU LLC. In connection with this transaction, we expect to
receive a total consideration of approximately $16.7 billion, con-
sisting of $12.0 billion in cash, $4.0 billion in Comcast guaranteed
debt and $0.7 billion of preferred stock. The $4.0 billion of debt
and the $0.7 billion of preferred shares will both be issued by a
wholly-owned subsidiary of Comcast. In addition, GE will no lon-
ger be responsible for certain deferred taxes and Comcast will be
obligated to share with us potential tax savings associated with