Discontinued Insurance Operations
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| Earnings (loss) from discontinued operations, net of taxes |
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Discontinued operations comprise GE Life, our U.K.-based life insurance operation; the property and casualty insurance and reinsurance businesses and the European life and health operations of GE Insurance Solutions and most of its affiliates; and Genworth, our formerly wholly-owned subsidiary that conducted most of our consumer insurance business, including life and mortgage insurance operations. Results of these businesses are reported as discontinued operations for all periods presented.
In December 2006, we completed the sale of GE Life to Swiss Re for $0.9 billion. As a result, we recognized a loss of $0.3 billion after tax during 2006.
In June 2006, we completed the sale of the property and casualty insurance and reinsurance businesses and the European life and health operations of GE Insurance Solutions to Swiss Re for $9.3 billion, including the assumption of $1.7 billion of debt. We received $5.4 billion in cash and $2.2 billion of newly issued Swiss Re common stock, representing a 9% interest in Swiss Re.
In May 2004, we completed the initial public offering of Genworth. Throughout 2005, we continued to reduce our ownership in Genworth. In March 2006, we completed the sale of our remaining 18% investment, through a secondary public offering of 71 million shares of Class A Common Stock and direct sale to Genworth of 15 million shares of Class B Common Stock.
Earnings from discontinued operations, net of taxes, in 2006 were $0.2 billion, reflecting earnings from GE Insurance Solutions through the date of disposal ($0.3 billion), the gain on the sale of our remaining 18% investment in Genworth ($0.2 billion) and earnings from GE Life through the date of disposal ($0.1 billion), partially offset by the losses on disposal of GE Life ($0.3 billion) and GE Insurance Solutions ($0.1 billion).
Loss from discontinued operations, net of taxes, in 2005 was $1.9 billion, reflecting losses from the portions of GE Insurance Solutions described above ($2.8 billion), partially offset by earnings from, and gains on the sale of, Genworth ($0.9 billion).
Earnings from discontinued operations, net of taxes, in 2004 were $0.6 billion, reflecting earnings of Genworth ($0.4 billion), including our share of 2004 earnings from operations ($0.8 billion), partially offset by the loss on the Genworth initial public offering in May 2004 ($0.3 billion), and earnings from GE Insurance Solutions ($0.1 billion), primarily 2004 operations.
For additional information related to discontinued operations, see note 2.
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