Assets and Liabilities Of Business Held For Sale and Discontinued Operations | Note 2 . BUSINESSES HELD FOR SALE , FINANCING RECEIVABLES HELD FOR SALE AND DISCONTINUED OPERATIONS NBCU As previously disclosed, Comcast Corporation was obligated to share with us potential tax savings associated with its purchase of our interest in NBCU LLC. During the second quarter of 2015, we recognized $450 million of pre-tax income related to the settlement of this obligation. Assets and Liabilit ies of Businesses Held for Sale In the first quarter of 2015, we signed an agreement to sell our consumer finance business in Australia and New Zealand (ANZ Consumer Lending) for approximately 6,800 million Australian dollars and 1,400 million New Zealand dollars, respectively. On May 29, 2015, we sold a portion of the Australian business for gross proceeds of $ 671 million. As of June 30, 2015, ANZ Consumer Lending had assets and liabilities of $ 5,346 million and $ 358 million, respectively. The sale is targeted to close in 2015 with expected proceeds of approximately 6,000 million Australian dollars and 1,400 million New Zealand dollars. The transactions remain subject to customary closing conditions and regulatory approval s . In the fourth quarter of 2014, we signed an agreement to sell our Signaling business at Transportation, with assets of $ 271 million and liabilities of $ 129 million to Alstom for approximately $ 800 million, and our consumer finance business Budapest Bank to Hungary’s government. On June 29, 2015 we completed the sale of Budapest Bank for proceeds of $ 700 million. In the third quarter of 2014, we signed an agreement to sell our Appliances business with assets of $ 2,739 milli on and liabilities of $ 1,577 million to Electrolux for approximately $ 3,300 million. On July 1 , 2015, we were notified th at the Department of Justice had initiated court proceedings seeking to enjoin the sale of Appliances to Electrolux. E lectrolux and GE intend to defend the proposed transaction and GE’s goal is to close the deal in 2015 . FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE (In millions) June 30, 2015 December 31, 2014 Assets Cash and equivalents $ 239 $ 676 Investment securities - 448 Current receivables(a) 133 180 Inventories 720 588 Financing receivables – net 4,635 2,144 Property, plant, and equipment – net 1,100 1,015 Goodwill 799 539 Other intangible assets – net 251 170 Other 486 540 Assets of businesses held for sale $ 8,363 $ 6,300 Liabilities Short-term borrowings $ 30 441 Accounts payable(a) 703 510 Other current liabilities 349 348 Bank deposits - 1,931 Deferred income taxes (136) (33) Other 545 178 Liabilities of businesses held for sale $ 1,491 $ 3,375 (a) Certain transactions at our Appliances and Signaling businesses are made on an arms-length basis with GECC, consisting primarily of GE customer receivables sold to GECC and GECC services for material procurement. These intercompany balances included within our held for sale businesses are reported in the GE and GECC columns of our financial statements, but are eliminated in deriving our consolidated financial statements. GECC Financing receivables held for sale In the first quarter of 2015, in connection with the GE Capital Exit Plan , we committed to sell all of our non-U.S. Consumer financing receivables. As a result, we transferred these financing receivables to held for sale and recognized a pre-tax provision for losses on financing receivables of $ 2,405 million ($ 2,197 million after tax) and wrote-off the associated balance of the allowa nce for loan losses of $ 2,859 million to reduce the carrying value of the financing receivables to the lower of cost or fair value , less cost to sell . FINANCING RECEIVABLES HELD FOR SALE (in millions) June 30, 2015 December 31, 2014 Commercial CLL $ 920 $ 357 Energy Financial Services 6 35 GE Capital Aviation Services (GECAS) 36 27 Other 110 - Total Commercial 1,072 419 Consumer 26,910 (a) 359 Total financing receivables held for sale $ 27,982 $ 778 Over 30 days past due and nonaccrual financing receivables related to consumer financing receivables held for sale were $ 1,124 million and $ 656 million , respectively. Discontinued Operations Discontinued operations primarily comprised most of our CLL business, our Real Estate business and our U.S. mortgage business (WMC). 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 Three months ended June 30 Six months ended June 30 (In millions) 2015 2014 2015 2014 Operations Total revenues and other income (loss) $ 3,378 $ 3,933 $ 6,780 $ 7,913 Earnings (loss) from discontinued operations before income taxes $ 980 $ 647 $ (857) $ 1,395 Benefit (provision) for income taxes (325) 18 450 (51) Earnings (loss) from discontinued operations, net of taxes $ 655 $ 665 $ (407) $ 1,344 Disposal Gain (loss) on disposal before income taxes $ (3,384) $ (4) $ (7,036) $ 14 Benefit (provision) for income taxes (1,021) - (2,546) 1 Gain (loss) on disposal, net of taxes $ (4,405) $ (4) $ (9,582) $ 15 Earnings (loss) from discontinued operations, net of taxes(a) $ (3,750) $ 661 $ (9,989) $ 1,359 (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 industrial earnings (loss) from discontinued operations, net of taxes, on the Consolidated Statement of Earnings (Loss) . (In millions) June 30, 2015 December 31, 2014 Assets Cash and equivalents $ 6,448 $ 5,414 Investment securities 9,960 10,006 Financing receivables – net 28,570 114,561 Other receivables 1,718 2,192 Property, plant and equipment – net 17,902 18,051 Goodwill 12,982 13,569 Other Intangible assets - net 165 301 Deferred income taxes 2,148 2,920 Financing receivables held for sale 68,828 3,116 Valuation allowance on disposal group classified as discontinued operations (7,259) - Other 13,414 16,804 Assets of discontinued operations $ 154,876 $ 186,934 Liabilities Short-term borrowings $ 994 $ 1,125 Accounts payable 3,969 3,770 Other GE current liabilities 27 28 Non-recourse borrowings 9,168 10,569 Bank deposits 19,572 18,998 Long-term borrowings 612 1,182 All other liabilities 10,290 7,720 Deferred income taxes 4,349 5,402 Liabilities of discontinued operations $ 48,981 $ 48,794 Commercial lending and leasing In connection with the GE Capital Exit Plan , we announced the planned disposition of most of our CLL business and classified this portion of the business as discontinued operations and recorded an estimated loss on disposal of $ 3,380 million ( $ 4,329 million after tax) and $ 5,225 million ( $ 7,152 million after tax) for the three and six months ended June 30, 2015, respectively. During the first half of 2015, we signed transactions to sell our U.S. S ponsor Finance business to Canada Pension Plan Investment Board, our Global Fleet Services business to Element Financial Corporation and Arval, and our European Sponsor Finance business to Sumitomo Mitsui Banking Corporation. We expect to complete the tran sactions in 2015 and 2016. FINANCIAL INFORMATION FOR COMMERCIAL LENDING AND LEASING Three months ended June 30 Six months ended June 30 (In millions) 2015 2014 2015 2014 Operations Total revenues and other income (loss) $ 3,070 $ 3,308 $ 5,973 $ 6,628 Interest $ (641) $ (774) $ (1,343) $ (1,562) Operating and administrative (1,028) (955) (2,005) (1,791) Depreciation and amortization (421) (960) (1,768) (1,935) Provision for losses on financing receivables (13) (110) (1,757) (207) Earnings (loss) from discontinued operations, before income taxes 967 509 (900) 1,133 Benefit (provision) for income taxes (309) (73) 315 (218) Earnings (loss) from discontinued operations, net of taxes $ 658 $ 436 $ (585) $ 915 Disposal Gain (loss) on disposal before income taxes $ (3,380) $ - $ (5,225) $ - Benefit (provision) for income taxes (949) - (1,927) - Gain (loss) on disposal, net of taxes $ (4,329) $ - $ (7,152) $ - Earnings (loss) from discontinued operations, net of taxes(a) $ (3,671) $ 436 $ (7,737) $ 915 (a) Earnings (loss) from discontinued operations attributable to the Company, before income taxes, was $ (2,415) million and $ 499 million for the three months ended June 30, 2015 and 2014 , respectively, and $ (6,128) million and $ 1,120 million for the six months ended June 30, 2015 and 2014 , respectively. REAL ESTATE In connection with the GE Capital Exit Plan , we announced the planned disposition of our Real Estate business and classified the business as discontinued operations and recorded an estimated loss on disposal of $ 3 million ( $ 75 million after tax) and $ 1,811 million ( $ 2,430 million after tax) for the three and six months ended June 30, 2015, respectively. During the first half of 2015, we closed certain of our Real Estate business dispositions for proceeds of $ 17,517 million. We expect to dispose of substantially all of the remaining Real Estate business by the end of 2015. FINANCIAL INFORMATION FOR REAL ESTATE Three months ended June 30 Six months ended June 30 (In millions) 2015 2014 2015 2014 Operations Total revenues and other income (loss) $ 313 $ 664 $ 812 $ 1,295 Interest $ (137) $ (274) $ (373) $ (547) Operating and administrative (142) (201) (307) (351) Depreciation and amortization (2) (85) (62) (170) Provision for losses on financing receivables - 90 4 104 Earnings (loss) from discontinued operations, before income taxes 32 194 74 331 Benefit (provision) for income taxes 13 93 43 196 Earnings (loss) from discontinued operations, net of taxes $ 45 $ 287 $ 117 $ 527 Disposal Gain (loss) on disposal before income taxes $ (3) $ - $ (1,811) $ - Benefit (provision) for income taxes (72) - (619) - Gain (loss) on disposal, net of taxes $ (75) $ - $ (2,430) $ - Earnings (loss) from discontinued operations, net of taxes(a) $ (30) $ 287 $ (2,313) $ 527 (a) Earnings (loss) from discontinued operations attributable to the Company, before income taxes, was $ 29 million and $ 196 million for the three months ended June 30, 2015 and 2014 , respectively, and $ (1,738) million and $ 332 million for the six months ended June 30, 2015 and 2014 , respectively. 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 June 30, 2015 , such claims consisted of $ 3,688 million of individual claims generally submitted before the filing of a lawsuit (compared to $ 3,694 million at December 31, 2014 ) and $ 8,639 million of additional claims asserted against WMC in litigation without making a prior claim (Litigation Claims) (compared to $ 9,225 million at December 31, 2014 ). The total amount of these claims, $ 12,327 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 accr ued interest or fees. As of June 30, 2015 , these amounts do not include approximately $ 428 million of repurchase claims relating to alleged breaches of representations that are not in litigation and that are beyond the applicable statute of limita tions. 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 law and the June 11, 2015 decision of the N ew York Court of Appeals in ACE Securities Corp. v. DB Structured Products, Inc., on the statute of limitations period governing such claims. Reserves related to repurchase claims made against WMC were $ 825 million at June 30, 2015 , reflecting a n et increase to reserves in the three months ended June 30, 2015 of $ 11 million due to incremental provisions. The reserve estimate takes into account recent settlement activity and is based upon WMC’s evaluation of the remaining exposures as a percentage o f estimated lifetime mortgage loan losses within the pool of loans supporting each securitization for which timely claims have been asserted in litigation against WMC. Settlements in prior periods reduced WMC’s exposure on claims asserted in certain securi tizations and the claim amounts reported above give effect to these settlements . ROLLFORWARD OF THE RESERVE Three months ended June 30 Six months ended June 30 (In millions) 2015 2014 2015 2014 Balance, beginning of period $ 814 $ 550 $ 809 $ 800 Provision 11 102 18 102 Claim resolutions / rescissions - (103) (2) (353) Balance, end of period $ 825 $ 549 $ 825 $ 549 Given the significant litigation activity and WMC’s continuing efforts to resolve the lawsuits involving claims made against WMC, it is difficult to assess whether future losses will be consistent with WMC’s past experience. Adverse changes to WMC’s assumptions supporting the reserve may result in an increase to these reserves. WMC estimates a range of reasonably possible loss from $ 0 to approximately $ 500 million over its recorded reserve at June 30, 2015 . This estimate involves significant judgment and may not reflect the range of uncertainties and unpredictable outcomes inherent in litigation, including WMC litigation discussed in Legal Proceedings and potential changes in WMC’s legal strategy. This estimate excludes any possible loss ass ociated with an adverse court decision on the applicable statute of limitations, as WMC is unable at this time to develop such a meaningful estimate. At June 30, 2015 , there were 15 lawsuits involving claims made against WMC arising from alleged breaches of representations and warranties on mortgage loans included in 14 securitizations. The adverse parties in these cases are securitization trustees or parties claiming to act on their behalf. Although the alleged claims for relief vary from case to case, the complaints and counterclaims in these actions generally assert claims for breach of contract, indemnification, and/or declaratory judgment, and seek specific performance (repurchase of defective mortgage loan) and/or money damages. A dverse court decisions, including in cases not involving WMC, could result in new claims and lawsuits on additional loans. However, WMC continues to believe that it has defenses to the claims asserted in litigation, including, for example, based on causati on and materiality requirements and applicable statutes of limitations. It is not possible to predict the outcome or impact of these defenses and other factors, any of which could materially affect the amount of any loss ultimately incurred by WMC on these claims. WMC has also received indemnification demands, nearly all of which are unspecified, from depositors/underwriters/sponsors of RMBS in connection with lawsuits brought by RMBS investors concerning alleged misrepresentations in the securitization o ffering documents to which WMC is not a party or, in two cases, involving mortgage loan repurchase claims made against RMBS sponsors. WMC believes that it has defenses to these demands. To the extent WMC is required to repurchase loans, WMC’s loss also w ould be affected by several factors, including pay downs, accrued interest and fees, and the value of the underlying collateral. The reserve and estimate of possible loss reflect judgment, based on currently available information, and a number of assumptio ns, including economic conditions, claim and settlement activity, pending and threatened litigation, court decisions regarding WMC’s legal defenses, indemnification demands, government activity, and other variables in the mortgage industry. Actual losses a rising from claims against WMC could exceed these amounts and additional claims and lawsuits could result if actual claim rates, governmental actions, litigation and indemnification activity, adverse court decisions, actual settlement rates or losses WMC i ncurs on repurchased loans differ from its assumptions . FINANCIAL INFORMATION FOR WMC Three months ended June 30 Six months ended June 30 (In millions) 2015 2014 2015 2014 Total revenues and other income (loss) $ (5) $ (39) $ (5) $ (35) Earnings (loss) from discontinued operations, net of taxes $ (10) $ (30) $ (16) $ (32) |