GE 2011 Annual Report Download - page 135

GE 2011 ANNUAL REPORT 133
    
Note 27.
Intercompany Transactions
Effects of transactions between related companies are made on
an arms-length basis, are eliminated and consist primarily of
GECS dividends to GE or capital contributions from GE to GECS; GE
customer receivables sold to GECS; GECS services for trade
receivables management and material procurement; buildings
and equipment (including automobiles) leased between GE and
GECS; information technology (IT) and other services sold to GECS
by GE; aircraft engines manufactured by GE that are installed on
aircraft purchased by GECS from third-party producers for lease
to others; and various investments, loans and allocations of GE
corporate overhead costs.
These intercompany transactions are reported in the GE and
GECS columns of our fi nancial statements, but are eliminated
in deriving our consolidated fi nancial statements. Effects of
these eliminations on our consolidated cash fl ows from operat-
ing, investing and fi nancing activities include the following. Net
decrease (increase) in activity related to GE customer receivables
sold to GECS of $(353) million, $81 million and $(157) million have
been eliminated from consolidated cash from operating and
investing activities at December 31, 2011, 2010 and 2009, respec-
tively. Capital contributions from GE to GECS of $9,500 million
have been eliminated from consolidated cash from investing and
fi nancing activities at December 31, 2009. There were no such
capital contributions at December 31, 2011 or December 31, 2010.
Eliminations of intercompany borrowings (includes GE investment
in GECS short-term borrowings, such as commercial paper) of
$903 million, $293 million and $715 million have been eliminated
from fi nancing activities at December 31, 2011, 2010 and 2009,
respectively. Other reclassifi cations and eliminations of $(205) mil-
lion, $(205) million and $741 million have been eliminated from
consolidated cash from operating activities and $(726) million,
$107 million and $(817) million have been eliminated from consoli-
dated cash from investing activities at December 31, 2011, 2010
and 2009, respectively.
Note 28.
Operating Segments
Basis for presentation
Our operating businesses are organized based on the nature of
markets and customers. Segment accounting policies are the
same as described in Note 1. Segment results for our fi nancial
services businesses refl ect the discrete tax effect of transactions.
Effective January 1, 2011, we reorganized the former
Technology Infrastructure segment into three segments—
Aviation, Healthcare and Transportation. The prior-period results
of the Aviation, Healthcare and Transportation businesses are
unaffected by this reorganization. Also, beginning January 1,
2011, we allocate service costs related to our principal pension
plans and we no longer allocate the retiree costs of our post-
retirement healthcare benefi ts to our segments. This revised
allocation methodology better aligns segment operating costs to
active employee costs that are managed by the segments. This
change did not signifi cantly affect our reported segment results.
On January 28, 2011, we sold the assets of our NBCU business
in exchange for cash and a 49% interest in a new entity, NBCU LLC
(see Note 2). Results of our formerly consolidated subsidiary,
NBCU, and our current equity method investment in NBCU LLC
are reported in the Corporate items and eliminations line on the
Summary of Operating Segments.
On February 22, 2012, we merged our wholly-owned subsid-
iary, GECS, with and into GECS’ wholly-owned subsidiary, GECC.
Our fi nancial services segment, GE Capital, will continue to com-
prise the continuing operations of GECC, which now includes the
run-off insurance operations previously held and managed in
GECS. References to the GE Capital segment in these consolidated
fi nancial statements relate to the segment as it existed during
2011 and do not refl ect the February 22, 2012 merger.
A description of our operating segments as of December 31,
2011, can be found below, and details of segment profi t by
operating segment can be found in the Summary of Operating
Segments table in Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
Energy Infrastructure
Power plant products and services, including design, installation,
operation and maintenance services are sold into global markets.
Gas, steam and aeroderivative turbines, generators, combined
cycle systems, controls and related services, including total asset
optimization solutions, equipment upgrades and long-term
maintenance service agreements are sold to power generation
and other industrial customers. Renewable energy solutions
include wind turbines and solar technology. Water treatment
services and equipment include specialty chemical treatment
programs, water purifi cation equipment, mobile treatment sys-
tems and desalination processes. In addition, it provides
protection and control, communications, power sensing and
power quality products and services that increase the reliability of
electrical power networks and critical equipment and offering
wireless data transmission. Electrical equipment and control
products include power panels, switchgear and circuit breakers.
The GE Oil & Gas business sells advanced technology equip-
ment and services for all segments of the offshore and onshore
oil and gas industry, from subsea, drilling and production, LNG,
pipelines and storage to industrial power generation, refi ning
and petrochemicals. We also provide pipeline integrity solutions,
sensor-based measurement, inspection, asset condition moni-
toring, controls, and radiation measurement solutions. Oil & Gas
also offers integrated solutions using sensors for temperature,
pressure, moisture, gas and fl ow rate as well as non-destructive
testing inspection equipment, including radiographic, ultrasonic,
remote visual and eddy current.