Jeffrey R. Immelt became Chairman and Chief Executive Officer when John F. Welch retired in September 2001. Gary L. Rogers became Vice Chairman and a director in 2001. With his operations expertise and leadership in our short-cycle businesses, Mr. Rogers will play an important role in driving quality and productivity initiatives throughout GE.

The GE Board held 10 meetings in 2001. In December, the Board voted to increase GE's quarterly dividend for the 26th consecutive year. The Audit Committee, composed of outside directors, held four meetings to review the activities and independence of GE's external auditors and the activities of GE's internal audit staff. It also reviewed GE's financial reporting process, financial controls and compliance with key GE policies and applicable laws.

The Finance Committee, in four meetings, reviewed GE's retirement plans, foreign exchange exposure, airline financing and other matters involving major uses of GE funds. The Management Development and Compensation Committee, composed of outside directors, reviewed in eight meetings all executive compensation plans, policies and practices, changes in executive assignments and responsibilities, and key succession plans. The Nominating Committee, also composed of outside directors, at three meetings reviewed Board candidates and recommended the structure and membership of Board committees for 2002. The Operations Committee, in four meetings, reviewed GE's operating plan and related matters. The Public Responsibilities Committee, in three meetings, evaluated environmental and other public responsibility issues as well as activities of the GE Fund. The Technology and Science Committee held one meeting, at which it reviewed GE Power Systems.

Three distinguished directors will retire from the Board this year. Serving under three chairmen, Silas S. Cathcart has provided the Company 30 years of outstanding dedication, insight and wise counsel. As Chairman of the Management Development and Compensation Committee for nine years, he contributed enormous energy, understanding and personal warmth to the selection and nurturing of the leadership team that will guide and shape the Company for years to come. Gertrude G. Michelson has been a director for 26 years and Chairman of the Audit Committee for 10. Her extraordinarily wide-ranging contributions have gone well beyond her background in legal and public affairs. Her keen insight, determination and exceptional personal leadership have helped to shape the Company's culture and character. Frank H.T. Rhodes, a director for nearly two decades, has shared with the Board the exceptional abilities and wisdom that made him a respected leader in education and science. His probing and persistent questions, firm but gentle guidance, and respect and caring for others have epitomized the Board's independence, dedication and collegiality.