GE 2014 Annual Report Download - page 171

GE 2014 FORM 10-K 151
FINANCIAL STATEMENTS HELD FOR SALE & DISCONTINUED OPERATIONS
December 31 (In millions) 2014 2013
Assets
Cash and equivalents $ 133 $ 232
Financing receivables – net - 711
Other 1,102 1,396
Assets of discontinued operations $ 1,235 $ 2,339
Liabilities
Deferred income taxes $ 237 $ 248
Other 988 3,685
Liabilities of discontinued operations $ 1,225 $ 3,933
Other assets at December 31, 2014 and 2013 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
business. 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 specified in the sale agreement, with all claims in excess of 258 billion Japanese yen
(approximately $3,000 million) remaining our responsibility. On February 26, 2014, we reached an agreement with the buyer to
pay 175 billion Japanese yen (approximately $1,700 million) to extinguish this obligation. We have no remaining amount
payable under the February 26, 2014 agreement as our reserve for refund claims of $1,836 million at December 31, 2013 was
fully paid in the six months ended June 30, 2014.
FINANCIAL INFORMATION FOR GE MONEY JAPAN
(In millions) 2014 2013 2012
Earnings (loss) from discontinued operations, net of taxes $ 59 $ (1,636) $ (649)
WMC
During the fourth quarter of 2007, we completed the sale of WMC, our U.S. mortgage business. WMC substantially
discontinued all new loan originations by the second quarter of 2007, and is not a loan servicer. In connection with the sale,
WMC retained certain representation and warranty obligations related to loans sold to third parties prior to the disposal of the
business and contractual obligations to repurchase previously sold loans that had an early payment default. All claims
received by WMC for early payment default have either been resolved or are no longer being pursued.
The remaining active claims have been brought by securitization trustees or administrators seeking recovery from WMC for
alleged breaches of representations and warranties on mortgage loans that serve as collateral for residential mortgage-backed
securities (RMBS). At December 31, 2014, such claims consisted of $3,694 million of individual claims generally submitted
before the filing of a lawsuit (compared to $5,643 million at December 31, 2013) and $9,225 million of additional claims
asserted against WMC in litigation without making a prior claim (Litigation Claims) (compared to $6,780 million at December
31, 2013). The total amount of these claims, $12,919 million, reflects the purchase price or unpaid principal balances of the
loans at the time of purchase and does not give effect to pay downs or potential recoveries based upon the underlying
collateral, which in many cases are substantial, nor to accrued interest or fees. As of December 31, 2014, these amounts do
not include approximately $1,070 million of repurchase claims relating to alleged breaches of representations that are not in
litigation and that are beyond the applicable statute of limitations. WMC believes that repurchase claims brought based upon
representations and warranties made more than six years before WMC was notified of the claim would be disallowed in legal
proceedings under applicable statutes of limitations.