GE 2015 Annual Report Download - page 188

FINANCIAL STATEMENTS ACQUISITIONS & INTANGIBLE ASSETS
160 GE 2015 FORM 10-K
On June 2, 2014, we acquired &DPHURQ¶V Reciprocating Compression division for $550 million. The division provides reciprocating
compression equipment and aftermarket services for oil and gas production, gas processing, gas distribution and independent power
industries. The division is included in our Oil & Gas segment. The purchase price allocation resulted in goodwill of approximately $280
million and amortizable intangible assets of approximately $95 million.
In the first quarter of 2014, we acquired several businesses in our Healthcare segment. On February 12, 2014, we acquired API
Healthcare (API) for $340 million in cash. API is a healthcare workforce management software and analytics solutions provider. The
purchase price allocation resulted in goodwill of approximately $270 million and amortizable intangible assets of approximately $125
million. On March 21, 2014, we acquired certain Thermo Fisher Scientific Inc. life-science businesses for $1,065 million in cash. The
primary business acquired, Hyclone, is a leading manufacturer of products used to support biopharmaceutical research and production.
The purchase price allocation resulted in goodwill of approximately $695 million and amortizable intangible assets of approximately
$320 million.
GOODWILL
CHANGES IN GOODWILL BALANCES
2015 2014
 Dispositions, Dispositions,
 currenc
y
currency
Balance a
t
exchange Balance a
t
Balance a
t
exchange Balance a
t
(In millions) January 1 Acquisitions(a) and othe
r
December 31 January 1 Acquisitions and othe
r
December 31
Power $ 7,769 $ 9,582 $ (615) $ 16,736 $ 7,852 $ 21 $ (104) $ 7,769
Renewable Energy 984 1,631 (35) 2,580 970 - 14 984
Oil & Gas 10,572 22 - 10,594 10,516 276 (220) 10,572
Energy Management 4,570 2,314 (657) 6,227 4,748 - (178) 4,570
A
viation 8,952 - (385) 8,567
9,103 - (151) 8,952
Healthcare 17,532 11 (190) 17,353
16,643 1,004 (115) 17,532
Transportation 887 - (36) 851
1,012 2 (127) 887
A
ppliances & Lighting 226 - (12) 214 606 - (380) 226
Capital 1,680 728 (37) 2,370
1,684 - (3) 1,680
Corporate 34 - - 34
3 31 - 34
Total $ 53,207 $ 14,287 $ (1,968) $ 65,526
$ 53,137 $ 1,334 $ (1,264) $ 53,207
(a) Goodwill balances associated with Alstom and their allocations to segments are preliminary.
Goodwill balances increased by $12,319 million in 2015, primarily as a result of the Alstom and Milestone Aviation acquisitions, partially
offset by currency exchange effects of the stronger U.S dollar and disposals.
Goodwill balances increased $70 million in 2014, primarily as a result of acquisitions at Healthcare and Oil & Gas partially offset by
currency exchange effects of a stronger U.S. dollar.
We test goodwill for impairment annually in the third quarter of each year using data as of July 1 of that year. The impairment test
consists of two steps: in step one, the carrying value of the reporting unit is compared with its fair value; in step two, which is applied
when the carrying value is more than its fair value, the amount of goodwill impairment, if any, is derived by deducting the fair value of
the reporting XQLW¶V assets and liabilities from the fair value of its equity, and comparing that amount with the carrying amount of
goodwill. We determined fair values for each of the reporting units using the market approach, when available and appropriate, or the
income approach, or a combination of both. We assess the valuation methodology based upon the relevance and availability of the data
at the time we perform the valuation. If multiple valuation methodologies are used, the results are weighted appropriately.
Valuations using the market approach are derived from metrics of publicly traded companies or historically completed transactions of
comparable businesses. The selection of comparable businesses is based on the markets in which the reporting units operate giving
consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to reporting units for
which there are publicly traded companies that have the characteristics similar to our businesses.
160 GE 2015 FORM 10-K