GE 2013 Annual Report Download - page 87

GE 2013 ANNUAL REPORT 85
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NBCU LLC investment were $4,937 million, and were reported
in the “Deferred income taxes” caption in our Statement of
Financial Position.
On March 19, 2013, we closed the transaction to sell
our remaining 49% common equity interest in NBCU LLC to
Comcast for total consideration of $16,722 million, consisting of
$11,997 million in cash, $4,000 million in Comcast guaranteed
debt and $725 million in preferred stock. The $4,000 million of
debt and the $725 million of preferred shares were both issued
by a wholly-owned subsidiary of Comcast. During the fi rst quar-
ter of 2013, we sold both of these investments at approximately
par value. Consistent with the initial purchase of the 51% inter-
est of NBCU LLC, Comcast is obligated to share with us potential
tax savings associated with their purchase of our remaining 49%
NBCU LLC interest, if realized. GECC also sold real estate compris-
ing certain fl oors located at 30 Rockefeller Center, New York and
the CNBC property located in Englewood Cliffs, New Jersey to
affi liates of NBCU LLC for $1,430 million in cash.
As a result of the transactions, we recognized pre-tax gains of
$1,096 million ($825 million after tax) on the sale of our 49% com-
mon equity interest in NBCU LLC and $921 million ($564 million
after tax) on the sale of GECC’s real estate properties.
Discontinued Operations
Discontinued operations primarily comprised GE Money Japan
(our Japanese personal loan business, Lake, and our Japanese
mortgage and card businesses, excluding our investment in
GE Nissen Credit Co., Ltd.), our U.S. mortgage business (WMC),
our U.S. recreational vehicle and marine equipment fi nancing
business (Consumer RV Marine), Consumer Mexico, Consumer
Singapore, our Consumer home lending operations in Australia
and New Zealand (Australian Home Lending), our Consumer
mortgage business in Ireland (Consumer Ireland), our CLL
trailer services business in Europe (CLL Trailer Services) and
our Consumer banking business in Russia (Consumer Russia).
Associated results of operations, fi nancial position and cash
fl ows are separately reported as discontinued operations for all
periods presented.
Summarized fi nancial information for discontinued operations
is shown below.
(In millions) 2013 2012 2011
OPERATIONS
Total revenues and other income (loss) $ 186 $ 191 $ 1,074
Earnings (loss) from discontinued
operations before income taxes $ (494) $ (586) $ (93)
Benefit (provision) for income taxes 155 198 100
Earnings (loss) from discontinued
operations, net of taxes $ (339) $ (388) $ 7
DISPOSAL
Gain (loss) on disposal before
income taxes $ (2,027) $ (792) $ (329)
Benefit (provision) for income taxes 246 197 351
Gain (loss) on disposal, net of taxes $ (1,781) $ (595) $ 22
Earnings (loss) from discontinued
operations, net of taxes (a) $ (2,120) $ (983) $ 29
(a) The sum of GE industrial earnings (loss) from discontinued operations, net of
taxes, and GECC earnings (loss) from discontinued operations, net of taxes, is
reported as GE earnings (loss) from discontinued operations, net of taxes, on the
Statement of Earnings.
December 31 (In millions) 2013 2012
ASSETS
Cash and equivalents $ 232 $ 191
Financing receivables—net 711 793
Property, plant and equipment—net 6 706
Other 1,390 1,625
Assets of discontinued operations $ 2,339 $ 3,315
LIABILITIES
Deferred income taxes $ 248 $ 372
Other 3,685 2,361
Liabilities of discontinued operations $ 3,933 $ 2,733
Other assets at December 31, 2013 and 2012 primarily comprised
a deferred tax asset for a loss carryforward, which expires
principally in 2017 and in part in 2019, related to the sale of our
GE Money Japan business.
GE MONEY JAPAN
During the third quarter of 2008, we completed the sale of GE
Money Japan, which included our Japanese personal loan busi-
ness. Under the terms of the sale, we reduced the proceeds from
the sale for estimated refund claims in excess of the statutory
interest rate. Proceeds from the sale were to be increased or
decreased based on the actual claims experienced in accordance
with loss-sharing terms specifi ed in the sale agreement, with
all claims in excess of 258 billion Japanese yen (approximately
$3,000 million) remaining our responsibility. The underlying
portfolio to which this obligation relates is in runoff status and
interest rates were capped for all designated accounts by mid-
2009. In the third quarter of 2010, we were required to begin
making reimbursements under this arrangement.
Overall, excess interest refund claims activity has been dif-
fi cult to predict and subject to several adverse factors, including
the challenging global economic conditions over the last few
years, the fi nancial status of other Japanese personal lenders
(including the 2010 bankruptcy of a large independent personal
loan company), substantial ongoing legal advertising and
consumer behavior. Since our disposition of the business, incom-
ing claims have continued to decline; however, the pace and
pattern of this decline are highly variable, diffi cult to predict
and can have a signifi cant effect on our estimate of this refund
claims obligation.
The terms of the sale agreement provided us with a buyout
option to extinguish this obligation at March 31, 2014, and on a
biennial basis thereafter if we elected not to exercise our option
in 2014. On February 26, 2014, we reached an agreement with
the buyer in which we will pay 175 billion Japanese yen (approxi-
mately $1,700 million) to extinguish this obligation.
Our reserve for these refund claims increased from $700
million at December 31, 2012 to $1,836 million at December 31,
2013, as increases to the reserve of $1,645 million during 2013,
including $1,440 million in the fourth quarter, primarily refl ecting
the February 26, 2014 agreement, were partially offset by refund