Continuing to build on its tremendous heritage of experience, technology and innovation, the world's No. 1 provider of high-technology power generation equipment and services made significant efforts to help reshape the future of the energy industry.

Coming off the most successful year in our 110-year history, GEPS delivered substantial benefits for customers and share owners. Focusing on customer needs and reducing process variation, we improved equipment deliveries, and supported on-time or early start-up of power projects by 10%, helping customers capture approximately $195 million in incremental revenue.

Our operating teams across the United States and Europe delivered power generation and compression equipment at record levels, using Six Sigma tools and processes to meet commitments and achieve cycle-time reductions of up to 45%.

 While meeting today's commitments, we're also focused on the future, investing more than $2.2 billion in new product and service technology programs and new business acquisitions. Highlights included the successful factory testing for the launch of the 7FB gas turbine for Reliant Energy, which will generate more reliable and efficient power at less cost. In 2001, we also began installing our first "H" System at the Baglan Bay Power Station in Wales. Slated for commercial operation in 2002, the H will be the power industry's first combined-cycle system capable of achieving 60% efficiency.

Acquisitions continue to expand our framework for enhancing customer value. In 2001, we concluded acquisition and investment agreements to add more than 20 businesses that will generate about $800 million in revenue in 2002. Each business brought excellent technology, great people and solid growth prospects to our existing Oil & Gas, Energy Management, and Power Generation activities.

During the year, we also substantially improved our ability to serve the needs of the oil and gas industry. In addition to growing our orders 29% overall, we expanded our customer service agreements and added to our downstream equipment capability with the acquisition of A-C Compressor. Likewise, our acquisition of Conmec strengthened our ability to service other OEM turbomachinery.

Our portfolio of global Energy Services businesses expanded significantly as well. Revenues grew $800 million to $5.7 billion, with 45% of these revenues coming from customers outside the U.S. In addition, customers continued to have confidence in our ability to deliver "over the long haul," as multi-year service agreements grew to almost $25 billion – positioning our services business for double-digit growth into the future. Around the world, Power Systems now has contractual service agreements in place at 384 customer sites in 40 countries, including 66 contracts to operate and maintain customers' facilities. We also closed over $730 million in orders for upgrade packages to enhance the performance of operating turbines. These programs improve efficiency, increase output and lower emissions – helping customers become more competitive in their markets. Looking ahead, our customers can expect further improvements in service and equipment performance as we expand and enhance technologies such as remote monitoring and diagnostics and remote tuning.

Six Sigma lies squarely at the heart of all our customer relationships. With 700 full-time Black Belt professionals and 15,000 active Six Sigma projects across our businesses around the globe, we have the resources, talent and training to make an even bigger difference with our customers – and we will.

Truly exemplifying the spirit of the "People in Power," our team members understand not only the importance of delivering on commitments for our customers and share owners, but also the importance of giving something back to the communities in which we live – each individual contributes to our performance, progress and ability to make a difference.

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