GE 2015 Annual Report Download - page 96

MD&A DISCONTINUED OPERATIONS
68 GE 2015 FORM 10-K
DISCONTINUED OPERATIONS
Discontinued operations primarily relate to our financial services businesses as a result of the GE Capital Exit Plan and include our
Consumer business, most of our CLL business, our Real Estate business, and our U.S. mortgage business (WMC). All of these
operations were previously reported in the Capital segment.
We have entered into Transitional Service Agreements (TSA) with and provided certain indemnifications to buyers of GE &DSLWDO¶V
assets. Under the TSAs, GE Capital provides various services for terms generally between 12 and 24 months and receives a level of
cost reimbursement from the buyers.
Indemnifications amount to $1.5 billion, for which we have recognized related liabilities of $0.1 billion at December 31, 2015. In addition,
we provided $0.7 billion of credit support, the vast majority on behalf of certain CLL customers aligned with signed disposal transactions
scheduled to close in 2016, and recognized an insignificant liability at December 31, 2015.
As part of the GE Capital Exit Plan, we entered into hedges (on an after-tax basis) of our net investment in businesses that we plan to
dispose. These derivatives are treated as standalone hedges and the mark to market valuation changes on the derivatives are recorded
in earnings of discontinued operations.
Results of operations, financial position and cash flows for these businesses are separately reported as discontinued operations for all
periods presented.
FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS
(In millions) 2015 2014 2013
Earnings (loss) from discontinued operations, net of taxes $ (7,495) $ 5,855 $ 5,475
The 2015 loss from discontinued operations, net of taxes, primarily reflected the following:
x $7.9 billion after-tax loss at our CLL business (including a $8.7 billion after-tax loss on disposals),
x $2.0 billion after-tax loss at our Real Estate business primarily loss on disposals, and
x $0.1 billion after-tax effect of incremental reserves related to retained representation and warranty obligations to repurchase
previously sold loans on the 2007 sale of WMC.
x 2015 losses were partially offset by $2.5 billion after-tax earnings at our Consumer business, primarily $3.4 billion after-tax gain on
the split-off of Synchrony Financial, $0.5 billion after-tax gain on other transactions closed, partially offset by $0.8 billion after-tax
loss on disposals and $0.6 billion after-tax loss from operations.
The 2014 earnings from discontinued operations, net of taxes, primarily reflected the following:
x $3.2 billion of after-tax earnings from operations at our Consumer business,
x $1.8 billion of after-tax earnings from operations at our CLL business,
x $1.0 billion of after-tax earnings from operations at our Real Estate business, and
x $0.1 billion tax benefit related to the extinguishment of our loss-sharing arrangement for excess interest claims associated with the
2008 sale of GE Money Japan.
x 2014 earnings were partially offset by a $0.2 billion after-tax loss on incremental reserves related to retained representation and
warranty obligations to repurchase previously sold loans on the 2007 sale of WMC.
68 GE 2015 FORM 10-K