Discontinued Operations
As part of the disposal transactions for Putnam and Kroll, the Company provided certain indemnities, primarily related to pre-transaction tax uncertainties and legal contingencies. In accordance with applicable accounting guidance, liabilities were established related to these indemnities at the time of the sales and reflected as a reduction of the gain on disposal. Discontinued operations includes charges or credits resulting from the settlement or resolution of the indemnified matters, as well as adjustments to the liabilities related to such matters. Discontinued operations in 2011 includes credits of $50 million from the resolution of certain legal matters and insurance recoveries, as well as the settlement of tax audits and the expiration of the statutes of limitations related to certain of the indemnified matters, primarily with respect to Putnam.
In the fourth quarter of 2011, management initiated a plan to sell the Marsh BPO business, which was completed in August 2012. Marsh's BPO business, previously part of the Marsh U.S. Consumer business, provided policy, claims, call center and accounting operations on an outsourced basis to life insurance carriers. Marsh invested in a technology platform that was designed to make the Marsh BPO business scalable and more efficient. During 2011, Marsh decided that it would cease investing in the technology platform and instead exit the business via a sale. The Company wrote off capitalized software of $17 million, net of tax, which is included in discontinued operations in 2011.
Summarized Statements of Income data for discontinued operations is as follows:
|
| | | | | | | | | | | |
For the Year Ended December 31, |
(In millions of dollars) | 2013 |
| | 2012 |
| | 2011 |
|
Income (loss) from discontinued operations, net of tax | $ | — |
| | $ | — |
| | $ | (17 | ) |
Disposals of discontinued operations | (4 | ) | | (2 | ) | | 25 |
|
Income tax (credit) expense | (10 | ) | | 1 |
| | (25 | ) |
Disposals of discontinued operations, net of tax | 6 |
| | (3 | ) | | 50 |
|
Discontinued operations, net of tax | $ | 6 |
| | $ | (3 | ) | | $ | 33 |
|
Discontinued operations, net of tax per share | | | | | |
– Basic | $ | 0.01 |
| | $ | — |
| | $ | 0.06 |
|
– Diluted | $ | 0.01 |
| | $ | — |
| | $ | 0.06 |
|
