BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS

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 $2,120 million and liabilities of $546 million, as held for sale. We expect to complete the sale of the business by the end of the first quarter of 2018.

In the fourth quarter of 2016, we classified our Water business within our Power segment with assets of $1,696 million and liabilities of $648 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 in the second half of 2017, subject to customary closing conditions and regulatory approval.

FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE
(In millions)	June 30, 2017		December 31, 2016
Assets
Current receivables(a)	$	698	$	366
Inventories	579		211
Property, plant, and equipment – net	1,034		632
Goodwill	1,258		212
Other intangible assets – net	237		123
Contract assets	195		125
Other	96		76
Assets of businesses held for sale	$	4,096	$	1,745
Liabilities
Accounts payable	$	394	$	190
Progress collections and price adjustments accrued	155		141
Other current liabilities	264		133
Non-current compensation and benefits	219		82
Other	162		110
Liabilities of businesses held for sale	$	1,195	$	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 $280 million and $117 million at June 30, 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 separately 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. See Note 18 for further information about indemnifications.

FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS
	Three months ended June 30						Six months ended June 30
(In millions)	2017			2016			2017			2016
Operations
Total revenues and other income (loss)	$	9		$	568		$	88		$	1,861
Earnings (loss) from discontinued operations before income taxes	$	(216	)	$	(240	)	$	(412	)	$	(160	)
Benefit (provision) for income taxes (a)	66			170			128			182
Earnings (loss) from discontinued operations, net of taxes	$	(150	)	$	(70	)	$	(284	)	$	22
Disposal
Gain (loss) on disposal before income taxes	$	8		$	(295	)	$	(19	)	$	(540	)
Benefit (provision) for income taxes (a)	(3		)	(177		)	(81		)	(331		)
Gain (loss) on disposal, net of taxes	$	4		$	(472	)	$	(100	)	$	(871	)
Earnings (loss) from discontinued operations, net of taxes(b)(c)	$	(146	)	$	(541	)	$	(385	)	$	(849	)

(a) GE Capital's total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $253 million and $(47) million for the three months ended June 30, 2017 and 2016, respectively, and $(323) million and $(881) million for the six months ended June 30, 2017 and 2016, respectively, including current U.S. Federal tax benefit (provision) of $68 million and $29 million for the three months ended June 30, 2017 and 2016, respectively, and $(519) million and $(471) million for the six months ended June 30, 2017 and June 30, 2016, respectively. The deferred tax benefit (provision) was $(190) million and $40 million for the three months ended June 30, 2017 and 2016, respectively, and $370 million and $732 million for the six months ended June 30, 2017 and June 30, 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 earnings (loss) from discontinued operations, net of taxes, in the GE Industrial column of the Consolidated Statement of Earnings (Loss).

(c) Earnings (loss) from discontinued operations attributable to the Company, before income taxes, was $(215) million and $(537) million for the three months ended June 30, 2017 and 2016, respectively, and $(438) million and $(703) million for the six months ended June 30, 2017 and 2016, respectively.

(In millions)	June 30, 2017		December 31, 2016
Assets
Cash and equivalents	$	522	$	1,429
Investment securities	1,729		2,626
Deferred income taxes	950		487
Financing receivables held for sale	3,711		8,547
Other assets	938		1,727
Assets of discontinued operations	$	7,850	$	14,815
Liabilities
Accounts payable	87		164
Borrowings	—		2,076
Other liabilities	825		1,918
Liabilities of discontinued operations	$	911	$	4,158