Businesses Held For Sale and Discontinued Operations

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Assets and Liabilities Of Business Held For Sale and Discontinued Operations

Note 2. BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS

Assets and Liabilities of Businesses Held for Sale

In the first quarter of 2017, we classified our Industrial Solutions business within our Energy Connections & Lighting segment with assets of $2,160 million and liabilities of $510 million, as held for sale. We expect to complete the sale of the business within the next twelve months.

In the fourth quarter of 2016, we classified our Water business within our Power segment with assets of $1,651 million and liabilities of $634 million, as held for sale. In March 2017, we signed an agreement with Suez Environnement S.A. (Suez) to sell the business for $3,415 million. The deal is expected to close mid- 2017, subject to customary closing conditions and regulatory approval.

FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE
(In millions)	March 31, 2017		December 31, 2016
Assets
Current receivables(a)	$	687	$	366
Inventories		576		211
Property, plant, and equipment – net		1,002		632
Goodwill		1,290		212
Other intangible assets – net		238		123
Contract assets		192		125
Other		91		76
Assets of businesses held for sale	$	4,076	$	1,745
Liabilities
Accounts payable	$	367	$	190
Progress collections and price adjustments accrued		167		141
Other current liabilities		226		133
Non-current compensation and benefits		221		82
Other		164		110
Liabilities of businesses held for sale	$	1,144	$	656

(a) Included transactions in our industrial businesses that were made on an arms-length basis with GE Capital, consisting of GE customer receivables sold to GE Capital of $264 million and $117 million at March 31, 2017 and December 31, 2016, respectively. These intercompany balances included within our held for sale businesses are reported in the GE and GE Capital columns of our financial statements, but are eliminated in deriving our consolidated financial statements.

Discontinued Operations

Discontinued operations primarily relate to our financial services businesses as a result of the GE Capital Exit Plan and includes our U.S. mortgage business (WMC). All of these operations were previously reported in the Capital segment. Results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented.

We have entered into Transitional Service Agreements (TSA) with and provided certain indemnifications to buyers of GE Capital’s 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.

FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS
	Three months ended March 31
(In millions)		2017		2016
Operations
Total revenues and other income	$	79	$	1,292
Earnings (loss) from discontinued operations before income taxes	$	(196)	$	80
Benefit (provision) for income taxes(a)		62		12
Earnings (loss) from discontinued operations, net of taxes	$	(134)	$	92
Disposals
Gain (loss) on disposals before income taxes	$	(27)	$	(246)
Benefit (provision) for income taxes(a)		(78)		(155)
Gain (loss) on disposals, net of taxes	$	(105)	$	(400)
Earnings (loss) from discontinued operations, net of taxes(b)(c)	$	(239)	$	(308)

(a) GE Capital’s total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $(576)million and $(834) million for the three months ended March 31, 2017 and2016, respectively, including current U.S. Federal tax benefit (provision) of $(587) million and $(501) million for the three months ended March 31, 2017 and 2016, respectively, and deferred tax benefit (provision) of $560 million and $691 million for the three months ended March 31, 2017 and 2016, respectively.

(b) The sum of GE industrial earnings (loss) from discontinued operations, net of taxes, and GE Capital earnings (loss) from discontinued operations, net of taxes, after adjusting for earnings (loss) attributable to noncontrolling interests related to discontinued operations, is reported within GE industrial earnings (loss) from discontinued operations, net of taxes, on the Consolidated Statement of Earnings (Loss).

(c) Earnings (loss) from discontinued operations attributable to the Company, before income taxes, was $(223) million and $(166) million for the three months ended March 31, 2017 and 2016, respectively

(In millions)	March 31, 2017		December 31, 2016
Assets
Cash and equivalents	$	808	$	1,429
Investment securities		2,105		2,626
Deferred income taxes		988		487
Financing receivables held for sale		4,281		8,547
Valuation allowance on disposal group classified as discontinued operations		(79)		(726)
Other assets		1,682		2,453
Assets of discontinued operations	$	9,786	$	14,815
Liabilities
Accounts payable	$	122	$	164
Borrowings		-		2,076
Other liabilities		1,619		1,918
Liabilities of discontinued operations	$	1,741	$	4,158

ROLLFORWARD OF THE RESERVE
	Three months ended March 31
(In millions)		2017		2016
Balance, beginning of period	$	626	$	875
Provision		-		57
Claim resolutions / rescissions		-		(99)
Balance, end of period	$	626	$	833

FINANCIAL INFORMATION FOR WMC
		Three months ended March 31
(In millions)		2017		2016
Total revenues and other income (loss)	$	13	$	(39)
Earnings (loss) from discontinued operations, net of taxes	$	(1)	$	(32)