Yet, in 2008–09, a period many considered the most difficult economic crisis since the Great Depression, GE earned about $30 billion and generated $36 billion of cash. And we finished this period much stronger than we started.

The world has been reset. Today’s uncertainty feels like the “new normal.” We will not return to the relative tranquility of the pre-crisis world. Growth will be harder to come by, trends will be more volatile and constituent voices will be louder. We see this environment as an opportunity to renew GE.

Last year, we predicted that calamity would reset the global economy. Now we can elaborate on what this reset world means for GE and our shareowners.

Unprecedented Actions in Unprecedented Times

As we navigated these uncharted waters, we had four goals: keep GE safe and secure; execute and position our infrastructure businesses to perform through the cycle; create financial flexibility; and protect our franchise and brand. We responded to these events as I hope you expected, though sometimes of necessity with more speed than we would have liked. In all of this, I had a lot of help, and never have I been more grateful for it. I trusted in the perseverance of our employees, the dedication of our managers and the wisdom of our Board.

Keep GE safe and secure. Over the last 18 months, we cut employment by 10%, raised equity and cut our dividend — difficult decisions for which I take full responsibility. We fortified GE Capital in the face of rising losses. While our “Triple-A” bond rating was cut, we remained at a strong and stable “Double-A.” Despite our large financial services exposure, GE weathered the crisis without participation in the Troubled Asset Relief Program (TARP).

Our GE Capital team has stabilized that business. We reduced our reliance on commercial paper and decreased dependence on long-term debt. We are funded into 2011. GE benefitted from government lending programs, like most others in the financial services industry. We issued a portion of our debt under the FDIC’s Temporary Loan Guarantee Program, for which we have paid a $2.3 billion fee. We lowered our leverage and increased our Tier I common ratio to a level comparable with banks.

We trimmed Capital Finance ending net investment by more than $50 billion and focused our resources on segments that continue to deliver high returns. We are managing the continued risk from commercial real estate and are well prepared for the potential for further volatility in this market.

A number of our finance company competitors disappeared during this crisis. We extended $150 billion of credit, with a significant portion of it going to small and medium-sized businesses. GE Capital Finance earned $11 billion in 2008–09 and never had an unprofitable quarter during this period.

Execute and position our infrastructure businesses to perform through the cycle. We executed in our industrial business and outperformed through the crisis. The profit of S&P “industrial” companies declined 16% in 2009. We outperformed many competitors in the industrial businesses, earning $14.7 billion of industrial segment profit (excluding media), a 1% increase from the previous year. We reduced our costs by $6 billion, so we could overcome the impact of reduced demand. Our industrial margins grew to 16.2%, up 60 basis points from the previous year. We sought out pockets of growth wherever we could find them. We deepened our position in fast-growing markets in Australia, Brazil, China and India. We grew our product services and helped make our customers more productive.

Create financial flexibility. We improved our financial strength and flexibility. We increased GE shareowners’ equity by $13 billion during 2009. We generated close to $17 billion of industrial cash flow, helped by significantly reducing working capital. Announced dispositions are expected to add another $10 billion of cash within the next year. We ended the year with $72 billion of cash.