GE 2012 Annual Report Download - page 12

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DRIVING THE INDUSTRIAL INTERNET Our Rail Optimization
Solutions help railroads move freight faster and more cost-
effectively. The RailConnect Transportation Management System
and Movement Planner System help railroads analyze critical
information in real time to plan and optimize business outcomes,
operations and asset utilization. These intelligent solutions deliver
real efficiencies: Norfolk Southern, a major Movement Planner
customer, estimates that every 1 mph increase in network speed
saves an estimated $200 million in annual capital and operating
expenses. In 2012, we expanded our Optimization Solutions portfolio
by acquiring RMI, a leading supplier of transportation management
systems used by railroads across North America to manage
operations, improve information flow, increase productivity
and reduce cost.
industrial segment organic revenue
growth was 8% and margins grew by
30 basis points, both metrics compar-
ing favorably to peers. Growth was
broad-based; all of our reported seg-
ments grew earnings for the first time
since 2006. We finished the year with
$210 billion of backlog, a record for
the Company.
We grow our industrial businesses
by pulling the same “levers.” We lead
with technology, invest in fast-growth
markets, drive value in the installed
base, invest in adjacencies and
grow margins.
Oil & Gas is our fastest-growing busi-
ness, with revenue of $15 billion and
earnings growing 16%. We compete
in high-growth markets. We are
investing to launch new products fully
utilizing our broad technical capabil-
ity. For instance, we launched the first
subsea compressor at Statoil, creat-
ing an industry-leading position. Our
orders grew by 16% in the year, and
we are winning new business around
the world.
Our Power & Water business grew
earnings by 8% in 2012, and we expect
to be about flat in 2013. We are well-
positioned for long-term growth in
natural gas power generation, distrib-
uted power, and services. However,
Wind power generation—where GE
leads—is more volatile. We had a very
strong year in 2012 but, due to U.S.
regulatory uncertainty, this year will
be difficult. Based on strong global
demand with expanding service,
we expect Power & Water growth to
resume in 2014.
Over the next few years, we see
earnings upside by improving
our performance in markets like
PICTURED: Rachna Pitts, Norfolk Southern
10 GE 2012 ANNUAL REPORT
LETTER TO SHAREOWNERS