GE 2012 Annual Report Download - page 37

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management’s discussion and analsis
GE 2012 ANNUAL REPORT 35
Energy Management (4% and 1% of consolidated three-
year revenues and total segment profit, respectively) revenues
increased 15% in 2012 primarily as a result of acquisitions after
increasing 24% in 2011 driven by acquisitions and higher volume.
Segment profit increased 68% in 2012 primarily driven by higher
prices and increased other income. Segment profit decreased
50% in 2011 primarily driven by the effects of inflation and
decreased other income.
Aviation (13% and 17% of consolidated three-year revenues
and total segment profit, respectively) revenues increased 6%
in 2012 as a result of higher prices and higher volume primar-
ily driven by increased commercial and military engine sales.
Segment profit increased 7% in 2012 as a result of higher prices
partially offset by the effects of inflation and lower productivity.
In 2011, Aviation revenues increased 7% as a result of higher vol-
ume and higher prices driven by equipment sales and services.
Segment profit increased 6% in 2011 as a result of higher volume
and higher prices.
Healthcare (12% and 14% of consolidated three-year rev-
enues and total segment profit, respectively) revenues increased
1% in 2012 on higher equipment sales, with the strongest
growth in emerging markets. Segment profit increased 4% in
2012 as a result of increased productivity. Revenues increased
7% in 2011 due to higher volume of both equipment and ser-
vice sales. Segment profit increased 2% in 2011 primarily due to
increased productivity.
Transportation (3% and 3% of consolidated three-year rev-
enues and total segment profit, respectively) revenues increased
15% in 2012 due to higher volume and higher prices related
to increased equipment sales and services. Segment profit
increased 36% in 2012 as a result of higher prices and increased
productivity, reflecting improved service margins. Revenues
increased 45% in 2011 as a result of higher volume related
to increased equipment sales and services. Segment profit
increased over 100% in 2011 as a result of increased productivity,
reflecting improved service margins and higher volume.
Home & Business Solutions (5% and 2% of consolidated
three-year revenues and total segment profit, respectively) rev-
enues increased 4% in 2012 and decreased 3% in 2011. In 2012,
revenues increased as a result of higher prices at Appliances.
The revenue decrease in 2011 was related to lower volume at
Appliances. Segment profit increased 31% in 2012 primarily as a
result of higher prices partially offset by the effects of inflation.
Segment profit decreased 41% in 2011 as a result of the effects
of inflation.
GE Capital (33% and 28% of consolidated three-year revenues
and total segment profit, respectively) net earnings increased 12%
in 2012 and 111% in 2011 due to the continued stabilization in the
overall economic environment. Increased stability in the financial
markets has contributed to lower losses and a significant increase
in segment profit to $7.4 billion in 2012 and $6.6 billion in 2011.
We also reduced our ending net investment (ENI), excluding
cash and equivalents, from $513 billion at January 1, 2009 to
$419 billion at December 31, 2012. GECC is a diversely funded
and smaller, more focused finance company with strong
positions in several commercial mid-market and consumer
financing segments.
Overall, acquisitions contributed $2.8 billion, $4.6 billion and
$0.3 billion to consolidated revenues in 2012, 2011 and 2010,
respectively, excluding the effects of acquisition gains. Our
consolidated net earnings included $0.2 billion, an insignificant
amount and $0.1 billion in 2012, 2011 and 2010, respectively, from
acquired businesses. We integrate acquisitions as quickly as pos-
sible. Only revenues and earnings from the date we complete
the acquisition through the end of the fourth following quarter
are attributed to such businesses. Dispositions also affected our
ongoing results through lower revenues of $5.1 billion, $12.6 bil-
lion and $3.0 billion in 2012, 2011 and 2010, respectively. The
effects of dispositions on net earnings were decreases of $0.3 bil-
lion in both 2012 and 2011 and an increase of $0.1 billion in 2010.
DISCONTINUED OPERATIONS. Consistent with our goal of reducing
GECC ENI and focusing our businesses on selective financial
services products where we have domain knowledge, broad
distribution, and the ability to earn a consistent return on capital,
while managing our overall balance sheet size and risk, in 2012,
we sold Consumer Ireland. Discontinued operations also includes
GE Money Japan (our Japanese personal loan business, Lake,
and our Japanese mortgage and card businesses, excluding our
investment in GE Nissen Credit Co., Ltd.), our U.S. mortgage busi-
ness (WMC), BAC Credomatic GECF Inc. (BAC), our U.S. recreational
vehicle and marine equipment financing business (Consumer
RV Marine), Consumer Mexico, Consumer Singapore and our
Consumer home lending operations in Australia and New Zealand
(Australian Home Lending). All of these operations were previ-
ously reported in the GE Capital segment.
We reported the operations described above as discontin-
ued operations for all periods presented. For further information
about discontinued operations, see the Segment Operations—
Discontinued Operations section and Note 2.
WE DECLARED $7.4 BILLION IN DIVIDENDS IN 2012. Common per-
share dividends increased 15% to $0.70 in 2012 after an increase
of 33% to $0.61 in 2011. We increased our quarterly dividend
three times during 2011 and 2012, and on February 15, 2013, our
Board of Directors approved a quarterly dividend of $0.19 per
share of common stock, which is payable April 25, 2013, to share-
owners of record at close of business on February 25, 2013. In
2011 and 2010, we declared $1.0 billion (including $0.8 billion as a
result of our redemption of preferred stock) and $0.3 billion in
preferred stock dividends, respectively. See Note 15.
Except as otherwise noted, the analysis in the remainder of
this section presents the results of GE (with GECC included on a
one-line basis) and GECC. See the Segment Operations section for
a more detailed discussion of the businesses within GE and GECC.