GE is a resilient, strong and accountable company. We believe that our long-term performance differentiates GE. This performance is based on a well-defined business model.

 We have a diverse portfolio of leading businesses; a stream of powerful Company-wide initiatives that drives growth and reduces cost; financial strength and Controllership that allow us to capitalize on opportunities through numerous cycles; and a set of common values that allows us to face any environment with confidence.

Diverse Portfolio…
The dramatic global slowdown had an impact on our more economically sensitive short-cycle businesses such as Plastics, Lighting and Appliances. But the rest of GE flourished and grew. Our long-cycle businesses and GE Capital, which together contributed more than 75% of GE's revenues, set records. In particular, our Power Systems business had a fabulous year because of its global leadership in gas turbine technology and its ability to meet customer needs.

The story behind our gas turbine success is worth telling. The seeds for our share gain were planted in the mid-1990s, when we invested in "F" turbine technology and acquired strategic global resources – even though hardly anyone was buying! Those were tough times for Power Systems, but because NBC and Plastics were booming, we had the resources to take the long view – and invest for the future.

Now, as we work through this recession, our short-cycle businesses are investing strategically and improving their positions. They will ignite GE growth and performance through the next recovery. This is how and why GE delivers so consistently, year after year, in good times and in bad. GE performs in any environment.

Initiatives Impact…
Our initiatives helped us navigate in the rough economic waters of 2001. Globalization, for instance, is saving about $250 million a year through sourcing technical content and talent from around the world. Services continued to grow, increasing by 13%, an important factor for businesses like Transportation Systems, which grew revenues in 2001 despite shipping 20% fewer locomotives. A robust service business is a shock absorber when moving through business cycles. Six Sigma continues to bring us closer to the customer while growing our own productivity. In 2001, we completed more than 6,000 Six Sigma projects "At the Customer, For the Customer," meaning we literally took Six Sigma to our customers, working on very specific projects with them at their sites. Digitization – our newest initiative – is gaining enormous momentum. We generated $1.9 billion of incremental cost savings through what we call "e-Make" and "e-Buy." Initiatives give a company momentum, even on a rainy day. This was the case in 2001. Moreover, all our initiatives add revenues, subtract costs and add value for customers.

Financial Strength and Controllership…
GE generated over $17 billion of cash in 2001. This helped us maintain a return on average total capital of 27%, a staggering performance in this economy. We have a leadership team that recognizes the importance of earnings quality and cash management. We have more than 450 internal auditors who drive the sharing of best practices and a spirit of Controllership. And our cash management gives us the ability to be a "buyer" during periods of crisis and reduced equity values.

Visibility and Accountability…
GE performance is based on hard work. We review, refresh and manage our businesses constantly. We operate with intensity and transparency. Every day, more than 300,000 people around the world focus on creating and selling products and services in businesses they completely understand - businesses most of which we either invented or have been intimately involved with for decades. We share a common set of values that dictates the actions of our leaders and shapes the character of our Company.

This is a confusing time for investors. Poorly defined "new economy" business models have cost people hundreds of billions. It is a time when consistent, excellent performance confuses some pundits, who then imply that it is "managed." It is almost as if an earnings "miss" would be more virtuous than meeting your commitments during tough times - but that is not GE. We manage businesses, not earnings. Our business diversity, initiatives, financial strength and values ensure that we deliver on our commitments.

If we were "just" an appliance or power systems or equipment finance company, we would have periodic down earnings years as those businesses go through their inevitable cycles. But instead, we have a diversified mix of leading industrial and financial businesses that together have demonstrated the ability to grow through cycle after cycle.

Our businesses are closely integrated. They share four leading-edge business initiatives: excellent financial disciplines and Controllership; a tradition of sharing talent and best practices; and a culture whose cornerstone is absolute, unyielding integrity. Without these powerful ties, we actually could merit the label "conglomerate" that people often inaccurately apply to us. That word just does not apply to GE.

Instead, what we have is a Company of diverse businesses whose sum truly is greater than the parts; a Company executing with excellence despite a brutal global economy to deliver over $17 billion of cash flow in 2001. Try "managing" your way to cash flow of that magnitude – year after year.

Some companies are different. We believe GE is different, and one of the things that makes us different is that - in good times and bad - we deliver. That is who we are.