NOTE 2—BUSINESS DEVELOPMENTS AND DISCONTINUED OPERATIONS

Business Developments

Cabela’s Acquisition

On September 25, 2017, we completed the acquisition from Synovus Bank of credit card assets and related liabilities of World’s Foremost Bank, a wholly-owned subsidiary of Cabela’s Incorporated (“Cabela’s acquisition”). The Cabela’s acquisition was accounted for as a business combination under the acquisition method of accounting. During the fourth quarter of 2017, we finalized purchase accounting. Including post-closing purchase price adjustments, total cash consideration for the acquisition was $3.2 billion net of cash and restricted cash acquired. We recognized approximately $5.9 billion in assets, primarily consisting of $5.7 billion in credit card receivables. We also assumed $2.6 billion of liabilities, of which $2.5 billion were securitized debt obligations. Results of the Cabela’s acquisition are included within our Credit Card segment.

Restructuring Activities

We periodically initiate restructuring activities to support business strategies and enhance our overall operational efficiency. These restructuring activities have primarily consisted of exiting certain business locations and activities as well as the realignment of resources supporting various businesses, including the decision in the fourth quarter of 2017 to cease new originations of home loan lending products within our Consumer Banking business. The charges incurred as a result of these restructuring activities have primarily consisted of severance and related benefits pursuant to our ongoing benefit programs, which are included in salaries and associate benefits within non-interest expense in our consolidated statements of income, as well as impairment of certain assets related to business locations and activities being exited, which are generally included in occupancy and equipment within non-interest expense.

During 2017 and 2015, we recognized restructuring charges of $184 million and $120 million, respectively, which are reflected in the Other category. There were no significant restructuring charges incurred during 2016. As of December 31, 2017, we had a liability of $124 million associated with these restructuring activities, which is recorded in other liabilities on our consolidated balance sheets.

Discontinued Operations

Our discontinued operations consist of the mortgage origination operations of our wholesale mortgage banking unit, GreenPoint Mortgage Funding, Inc. (“GreenPoint”) and the manufactured housing operations of GreenPoint Credit, LLC, a subsidiary of GreenPoint, both of which were acquired as part of the North Fork Bancorporation, Inc. (“North Fork”) acquisition in December 2006. Although the manufactured housing operations were sold to a third party in 2004 prior to our acquisition of North Fork, we acquired certain retained interests and obligations related to those operations as part of the acquisition. Separately, in the third quarter of 2007 we closed the mortgage origination operations of the wholesale mortgage banking unit. The results of both the wholesale banking unit and the manufactured housing operations have been accounted for as discontinued operations and are reported as income or loss from discontinued operations, net of tax, on the consolidated statements of income.

The following table summarizes the results from discontinued operations for the years ended December 31, 2017, 2016 and 2015:

Table 2.1: Results of Discontinued Operations



	Year Ended December 31,
(Dollars in millions)	2017			2016			2015
Income (loss) from discontinued operations before income taxes	$	(215	)	$	(30	)	$	60
Income tax provision (benefit)	(80		)	(11		)	22
Income (loss) from discontinued operations, net of tax	$	(135	)	$	(19	)	$	38

The loss from discontinued operations for the year ended December 31, 2017 was primarily driven by a mortgage representation and warranty settlement in the fourth quarter of 2017, which resulted in a pre-tax charge of $169 million representing amounts above previously recognized reserves.

As of December 31, 2017, we had no significant continuing involvement in the operations of our wholesale mortgage banking unit.

We previously had contingent obligations to exercise mandatory clean-up calls associated with certain securitization transactions undertaken by the discontinued GreenPoint Credit, LLC manufactured housing operations in the event the third-party servicer could not fulfill its obligation to exercise these clean-up calls. On October 10, 2017, we entered into an agreement with the third-party servicer under which we assumed the mandatory obligation to exercise the remaining clean-up calls as they become due on certain securitization transactions. See “Note 6—Variable Interest Entities and Securitizations” and “Note 19—Commitments, Contingencies, Guarantees and Others” for information associated with GreenPoint Credit, LLC manufactured housing operations and our mortgage representation and warranty exposure.