Previous Annual Report letters have called GE a "growth company." This is clearly the case, as we have added $47 billion in revenue over the last five years. But it is important in these times of uncertainty and slow growth to reconfirm GE's purpose.

Can such a thing as a $126 billion growth company exist? It does exist, because GE always plays offense. We don't run this Company as a "$126 billion blob." We run it as an $8.4 billion Medical Systems business… a $1 billion Ultrasound business within it… and as seven separate operations within Ultrasound, ranging in size between $50 million and $250 million. These operations are run by people who are obsessed with growth and achieve it by creating new markets and technology. Backing them are our systems, our initiatives and a strong balance sheet that allows them to take risks for growth, knowing that the occasional miss or failure is not only unpunished, but is also "no big deal" in the context of a $126 billion company. Keys to success include:

Broader and Deeper Product Superiority…
Technical superiority is the Edisonian heritage of GE that we will never forsake – in any business. The proud history of this Company, and the key to its bright future, is the uninterrupted stream of innovative, technically advanced products and services – from the "F" and "H" turbines, to Discovery™ LS medical diagnostic machines, to advanced ultrasound products, to pipeline monitoring software, to the GE90 engine, or even the Today show. No one has the range or scale of product and service innovation that GE has, and no one has its ability to maintain that superiority through financial swirls, economic storms, cycles and fads.

Good things come to life when you achieve and maintain technical superiority in products and services. In Medical Systems, we get faster, higher-margin growth; in Power Systems, we get massive growth in our installed base; at Aircraft Engines, we win hotly contested competitions. Technical excellence is a linchpin of GE's long-term growth strategy. We plan to increase our Six Sigma-designed product launches by 25% in 2002.  We will advance in new areas – such as molecular imaging, distributed energy, advanced composites and sensors – with much of the research led by the GE Global Research Center, which will begin a $100 million renovation and will be a hub for change and reinvigoration.

Services Excellence…
Our Services initiative continues to accelerate. Services revenue grew 13% to almost $19 billion in 2001. Our contractual service agreements have reached $60 billion. These are long-term, intimate customer commitments, where our rewards are tied to customer success. We have invested billions to upgrade our installed-base technology and have taken services from a wrench-turning maintenance activity to a knowledge-based business.

The next evolution of service is in information technology. GE has created several billion-dollar service businesses based on improving customer workflow. Our Energy Management business helps customers manage power transmission on the existing grid. Our Healthcare IT business helps hospitals improve quality and lower cost. Both businesses are growing by 30% annually.

Our Services capability is a formidable strength. It offsets cycles by offering long-term revenue streams. It gets GE "on the same side as the customers" by linking their future success to our own.

Globalization…
GE has 41% of its sales outside the U.S., and increasing that level is another major part of our growth strategy. China represents a major opportunity for our industrial businesses. In a very short period of time, we expect that Medical Systems, Plastics, Power Systems and Aircraft Engines each will be doing more than $1 billion in business in China.

 We have built a terrific GE Europe as well – $26 billion in sales with 70,000 employees, many of them from former state-owned companies that we bought and turned around. Europe continues to represent a prime opportunity for GE Capital.

GE is a global product company. We will manufacture CT scanners in China and side-by-side refrigerators in Mexico, and we will provide administrative services and software from India – all with higher quality and lower costs. Six Sigma is not confined to our U.S. operations; it is the practice and language of every facility we own in the world. Moreover, all of our global facilities operate under stringent environmental standards, and many have been recognized by government agencies for their environmental excellence.

 We see globalization from multiple angles. We support our customers everywhere in the world. We invest in global capabilities. We create strong people and global teams who want to win – and do win.

Business Development…
GE has averaged 100+ acquisitions for each of the last five years. In 2001, regulators in Europe blocked our acquisition of Honeywell. We disagreed with the reasoning – but quickly moved on, working with a pipeline of high-margin, high-growth, accretive acquisition opportunities. We have entered the fast-growing security segment in Industrial Systems; we have added to our offerings in Medical Systems; we have extended our capability in renewable energy and we are entering the equipment protection business in Specialty Materials. We announced the acquisition of Telemundo, which greatly enhances NBC's reach in the fastest-growing demographic in the U.S. GE Capital has strengthened its position in mid-market, real estate and consumer financing, as well as in its global businesses. In today's difficult equity markets, we see more strategic opportunities than we have seen in a long time.

GE uses acquisitions to strengthen our positions in industries we have been in for years.  We leverage Six Sigma in due diligence and integration to maximize returns. These acquisitions, made with financial and strategic discipline, have been accretive to our investors.