SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

(Mark One)
  [X]        ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 2001
                                       OR
  [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                          Commission file number 1-6157

                             Heller Financial, Inc.
             (Exact name of registrant as specified in its charter)

            Delaware                                     36-1208070
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

500 West Monroe Street, Chicago, Illinois                   60661
(Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (312) 441-7000

                    Securities registered pursuant to Section
                     12(b) of the Act at December 31, 2001:

          Title of Each Class        Name of Exchange on which Registered
       -------------------------     ------------------------------------
      Mandatory Enhanced Dividend         New York Stock Exchange, Inc.
          Securities (MEDS)

     Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes   |X|  No.
                                          ----    ------

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

     At August 2, 2002,  100 shares of Class A Common Stock,  which  constitutes
all  of  the  outstanding  common  equity,  with  a  par  value  of  $0.25  were
outstanding.

     Aggregate   market  value  of  the   outstanding   common  equity  held  by
nonaffiliates of the registrant at August 2, 2002: $0.00.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I (1)(a) AND
(b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE REDUCED
DISCLOSURE FORMAT.





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                                TABLE OF CONTENTS


     Item No.                                       Name of Item                                   Page
<S>     <C>                                                                                           <C>
Part I
   Item 1.         Business......................................................................     3
   Item 2.         Properties....................................................................    10
   Item 3.         Legal Proceedings.............................................................    10
   Item 4.         Submission of Matters to a Vote of Security Holders...........................    10

Part II
   Item 5.         Market for Registrant's Common Equity and Related
                      Stockholder Matters........................................................    11
   Item 6.         Selected Financial Data.......................................................    11
   Item 7.         Management's Discussion and Analysis of Financial Conditions and
                      Results of Operations......................................................    13
   Item 7A.        Quantitative and Qualitative Disclosures about Market Risk....................    25
   Item 8.         Financial Statements and Supplementary Data...................................    26
   Item 9.         Changes in and Disagreements with Accountants on
                      Accounting and Financial Disclosure........................................    67

Part III
   Item 10.        Directors and Executive Officers of the Registrant............................    67
   Item 11.        Executive Compensation........................................................    67
   Item 12.        Security Ownership of Certain Beneficial Owners and Management................    67
   Item 13.        Certain Relationships and Related Transactions................................    67

Part IV
   Item 14.        Exhibits, Financial Statements Schedules and Reports on Form 8-K..............    68

</TABLE>




<PAGE>
                                   PART I
ITEM 1. BUSINESS

     The following  discussion  contains certain  forward-looking  statements as
defined in the Securities Exchange Act of 1934 which are generally identified by
the words anticipates,  believes,  estimates,  expects, plans, intends and other
similar   expressions.   Those  statements   represent  the  Company's   current
expectations  regarding  its  future  growth,  results  and  performance.  These
forward-looking  statements  are  subject to certain  risks,  uncertainties  and
contingencies,  which could cause the Company's  actual results,  performance or
achievements  to differ  materially from those expressed in, or implied by, such
statements.  See Item 7.  Management's  Discussion  and  Analysis  of  Financial
Condition  and Results of  Operations--Special  Note  Regarding  Forward-Looking
Statements.

General

     Heller Financial, Inc. (including its consolidated subsidiaries,  Heller or
the  Company,  which  may  be  referred  to as we,  us or  our)  is a  worldwide
commercial  finance  company  providing a broad range of financing  solutions to
middle-market and small business clients.

     On October 24, 2001, over 90% of Heller's  issued and  outstanding  Class A
and Class B Common  Stock was acquired by Hawk  Acquisition  Corp.  ("Hawk"),  a
direct wholly owned  subsidiary of General  Electric  Capital  Corporation  ("GE
Capital")  pursuant  to a tender  offer (the  "Heller  Share  Acquisition").  On
October 25, 2001, Hawk was merged with and into Heller,  with Heller  continuing
as the surviving  corporation  and a wholly owned  subsidiary of GE Capital (the
"GE  Capital  Merger").  See Note 2 - GE  Capital  Merger - to the  consolidated
financial  statements.  GE Capital acquired  Heller's common stock at $53.75 per
share for  approximately  $5.3  billion in cash.  GE  Capital is a  wholly-owned
subsidiary of General Electric Capital Services, Inc., the common stock of which
is in turn wholly-owned  directly or indirectly by General Electric Company.  At
December 31,  2001,  100% of Heller's  outstanding  common stock is owned by one
entity,  GE Capital.  This allows Heller to file its December 31, 2001 Form 10-K
under the  reduced  disclosure  format set forth in the General  Instructions  I
(1)(a)  and (b) of Form  10-K.  The  reduced  disclosure  format  allows for the
omission of certain items in the Form 10-K and for the reduction of  information
required by other items.

     Effective January 1, 2002,  Heller's  businesses were combined with various
GE Capital business  groups.  All business  originated  subsequent to January 1,
2002, has been  originated  under GE Capital's  name in the GE Capital  business
groups. Therefore,  Heller has experienced reductions in its receivable balances
as its  business  runs-off.  Future  receivables  originated  by Heller  will be
recorded in the GE Capital business groups.  As Heller's debt runs-off,  it will
be funded  through GE Capital.  This will result in a reduction of Heller's debt
with  outside  parties and an increase in notes  payable to GE Capital.  Various
Heller business processes have been consolidated with GE Capital, resulting in a
reduction in the  workforce at Heller.  As work  previously  performed by Heller
employees is absorbed by GE Capital, GE Capital will charge Heller an assessment
for such work. This assessment will be part of Heller's operating expenses.

     The following is a summary of Heller's business segments as of December 31,
2001:

     Primary Business Segments

     We deliver our  products  and  services  principally  through two  business
segments:

     o    Domestic Commercial Finance; and
     o    International Factoring and Asset Based Finance.

     Domestic Business

     Our Domestic Commercial Finance segment is made up of five business units:

(1)  Corporate Finance,  primarily providing  collateralized cash flow and asset
     based lending;

                                       3
<PAGE>
(2)  Real Estate Finance, primarily providing secured real estate financing;

(3)  Leasing Services,  providing debt and lease financing of small,  medium and
     large  ticket  equipment   sourced   directly  or  through   manufacturers,
     distributors and dealers;

(4)  Healthcare  Finance,  providing  asset-based,  collateralized cash flow and
     secured  real estate  financing  to  healthcare  service  providers  with a
     primary focus on long-term care, hospitals and physician practices; and

(5)  Small  Business  Finance,  which  provides  financing to small  businesses,
     primarily through two programs of the Small Business  Association (SBA). In
     February 2001 we made a strategic  decision to discontinue  originations of
     new business in this business  unit. See Item 1.  Business--Small  Business
     Finance and Note 16--Small  Business  Finance  Charge--of our  Consolidated
     Financial Statements for more information.

     Although the Domestic  Commercial  Finance  segment  business units operate
primarily  in the United  States,  they also have  operations  in certain  other
countries,  including  Canada  and the  United  Kingdom,  in  order  to  provide
complementary financing products to clients in additional markets.

     International Business

     Our  International  Factoring  and Asset Based  Finance  segment,  known as
Heller  International Group (International  Group),  provides factoring services
and financings  secured  primarily by receivables,  inventory and equipment.  It
does so through  wholly-owned  subsidiaries  and joint  ventures  which  provide
financing to small and mid-sized companies primarily in Europe, but also in Asia
and Latin America.  It also has provided the platforms  within  various  foreign
markets from which our Global  Vendor  Finance  operation,  which is part of our
domestic  Leasing  Services  unit,  has begun to expand its reach  into  foreign
markets.

Domestic Commercial Finance Segment

      Corporate Finance

     Corporate  Finance  is  a  leading  provider  of  financing   solutions  to
middle-market   oriented  equity  sponsors,   intermediaries   and  enterprises.
Corporate Finance offers:

     o    cash flow lending;
     o    asset based lending; and
     o    on a more limited basis,  junior secured,  mezzanine and  modest-sized
          equity investments.

     Through Corporate Finance, we provide cash flow and asset based lending for
corporate     acquisitions,     leveraged    buyouts,     leveraged    buildups,
recapitalizations,  refinancings,  verifiable turnarounds,  debtor-in-possession
(DIP)  financings,  post-DIP  transactions and growth financing for publicly and
privately  held  companies.  The  companies  we finance are in a wide variety of
manufacturing,  distribution  and services  industries.  In almost all cases, we
source these transactions  through  professional or private equity investors who
acquire  businesses for financial or strategic  purposes,  or through  financial
intermediaries  such  as  accounting,  law,  investment  banking,  brokerage  or
turnaround  consulting firms. We have developed and maintain close relationships
with over 200 equity  sponsors,  many of whom have been our  clients  for ten or
more years and have financed several transactions with us.

     Corporate   Finance  also  provides   secured  term  and  revolving  credit
facilities with durations  averaging five to eight years. To a lesser extent, we
provide unsecured subordinated debt financings and invest in limited partnership
funds. From time to time, we make modest equity  investments in conjunction with
senior  debt  facilities,   receive  warrants,   and  make  stand-alone   equity
co-investments with private equity sponsor clients. We also serve as a co-lender
or  participant  in  larger  senior  secured  transactions  originated  by other
lenders.

     Corporate  Finance has offices in eleven  cities in the U.S.,  plus Toronto
and  London.  We also have  specialized  industry  teams  focused  on Energy and
Project  Finance,   Mature-Stage   Technology,   Media,  Mezzanine  Finance  and
Debtor-in-Possession and Post-Bankruptcy Finance.

                                       4
<PAGE>
     Corporate Finance has an established syndication  capability.  This enables
us to commit to larger  transactions,  while still managing the ultimate size of
our retained position, and to generate additional income.

     Real Estate Finance

     Real Estate Finance  provides  secured  financing to owners,  investors and
developers for the acquisition,  refinancing and renovation of commercial income
producing  properties in a wide range of property  types and  geographic  areas.
Real Estate  Finance  serves these markets by offering  tailored  senior secured
debt  and  junior  participating  debt  structures.  Real  Estate  Finance  also
opportunistically purchases interests in syndicated debt and selected commercial
mortgage-backed  bonds.  During the third quarter of 2001,  Real Estate  Finance
acquired a golf course  lending  portfolio of nearly $200  million.  Real Estate
Finance  is a  leading  provider  of  capital  to the  U.S.  vacation  ownership
industry,  providing timeshare resort developers with full life-cycle  financing
secured by time share receivables and unsold real estate inventory.  Real Estate
Finance also  periodically  invests in affordable  housing  transactions.  These
transactions  provide tax credits  which  benefit  our  consolidated  results by
lowering  our  income  tax  provision.  Real  Estate  Finance  is also a leading
provider of secured financing to owners of golf course properties.

Our  transactions are secured by a variety of property types including:

o    offices;
o    apartments;
o    vacation ownership units;
o    industrial properties;
o    retail properties;
o    hotels;
o    golf course properties;
o    senior housing;
o    manufactured housing communities;
o    affordable housing properties; and
o    self storage facilities.

     Real Estate Finance has eight offices  throughout the United States as well
as an office in Toronto.  Real Estate Finance generates new business through our
relationships with real estate brokers and through direct calling on prospective
borrowers.  Real Estate  Finance  markets our products  through the use of trade
advertising,  direct  marketing,  newsletters  and  trade  show  attendance  and
sponsorship.

     Leasing Services

     Leasing Services is made up of three distinct business units:

(1)  Global Vendor Finance,  which provides financing programs  domestically and
     in important overseas markets for manufacturers and their channel partners;

(2)  Commercial  Equipment Finance,  which provides loans and lease financing to
     leading  middle  market  companies  and  experienced  operators  of  proven
     franchise concepts; and

(3)  Capital Finance, which provides financing and leasing for industry specific
     assets  through  direct  investments,   joint  ventures  and  institutional
     partnerships.

     Global Vendor  Finance.  Global Vendor Finance  provides  customized  sales
financing   programs  that  enable  vendors  and  manufacturers  in  commercial,
industrial and information and technology markets to offer financing and leasing
options to their  customers.  The primary  products we offer are direct  finance
leases,  operating leases and loans.  These financing programs may be offered on
either a direct,  private label or joint venture  basis.  The primary  equipment
types we finance are  computer  equipment,  software,  machine  tool  equipment,
plastics  equipment,   graphic  arts  equipment  and  transportation  equipment.
Individual  transaction  sizes  within these  programs  range from $1,000 to $10
million  and  terms  generally  range  from 24 months  to eight  years.  Primary
locations  for vendor  leasing  are the United  States,  the United  Kingdom and
Canada,  with smaller operations in continental  Europe,  Mexico,  Hong Kong and
Singapore.

                                       5
<PAGE>
     Commercial  Equipment  Finance.  Commercial  Equipment  Finance  has broad,
national and international  access to the equipment finance  marketplace through
15 domestic offices. We provide general equipment term loan and lease financings
directly to a diverse group of middle market companies.  They use the financings
for:

o    expansions;
o    acquisitions;
o    turnkey land, building and equipment financing;
o    remodeling;
o    refinancing;
o    replacement or modernization of equipment; and
o    refinancing of existing equipment obligations

     In addition to direct origination, we generate business through traditional
broker and other intermediary channels. Through our broad market access, we also
generate  new  business  referrals  for  other  business  units of the  Company,
particularly Corporate Finance.

     Capital Finance. Capital Finance provides structured, secured financing and
equipment  leasing for  transactions in the United States and overseas.  Capital
Finance is comprised of the following three divisions:

o    Aircraft Finance
o    Entertainment Media and Technology Finance, and
o    Venture Finance

     Our  Aircraft  Finance  Division,  a  niche  competitor  in the  commercial
aircraft and aircraft  engine finance  industries,  provides  financing  through
operating  leases  and senior and  junior  secured  loans,  on both new and used
equipment. Our clients are typically mid-tier foreign or domestic airlines.

     Our Entertainment  Media and Technology  Division  provides  innovative and
highly  structured  leasing  alternatives  to  emerging  and  converging  media,
entertainment, technology and other selected companies.

     Our Venture  Finance  Division  offers leasing  products to target emerging
growth  companies in the information  technology,  technology and biotech fields
that:

o    are currently backed by well-regarded  venture  capitalists or professional
     investors;

o    have  a  high   growth   potential   based  on  both   target   market  and
     product/service offering; and

o    have a complete and experienced management team.

     Leasing   Services   distributes   a   portion   of  its   assets   through
securitizations and syndications. Through these capital markets capabilities, we
are able to provide broader market coverage and better service to clients, while
managing  borrower and industry  concentrations.  During 2001,  Leasing Services
securitized over $400 million of its assets,  generating a gain of approximately
$8 million.

                                       6
<PAGE>
     Healthcare Finance

     Healthcare Finance offers asset-based, collateralized cash flow and secured
real estate financing to healthcare  providers,  with a primary focus on clients
operating in sub-markets of the healthcare  industry,  including long-term care,
home healthcare,  physician practices,  pharmacies,  mental health providers and
durable medical equipment  suppliers.  Healthcare  Finance provides financing to
its  clients  through i)  revolving  lines of credit  secured  by, and  advanced
against,  accounts  receivable,  and ii)  term  loans  secured  by real  estate,
accounts receivable or other assets. Healthcare Finance clients use its products
to  address  their  working  capital  needs and to finance  healthcare  facility
acquisitions and expansions.

     Healthcare  Finance  primarily  markets its  services by  telemarketing  to
prospective   clients,   advertising  in  industry   specific   periodicals  and
participating  in industry trade shows. To a lesser extent,  Healthcare  Finance
markets its services by  developing  referral  relationships  with  accountants,
lawyers,  venture  capital firms,  billing and  collecting  firms and investment
banks.

     Small Business Finance

     In February  2001,  we announced a strategic  decision to  discontinue  the
origination  of SBA loans through our Small  Business  Finance  unit.  Increased
competition  from  banks  focused  on  capturing  small  business  customers  by
cross-selling  a range  of  financial  products,  such as  cash  management  and
depository  banking services in addition to SBA loans, have made the pricing and
returns on this product less attractive. Our decision to stop the origination of
new  business  in this  market  permitted  us to  re-deploy  capital  and  other
resources to our other businesses where we see better growth prospects.  Despite
ceasing  origination in Small Business Finance,  we funded existing  commitments
and we continue to service the Small  Business  Finance  portfolio in accordance
with our  customary  business  practices.  We recorded a one time  non-operating
pre-tax charge of approximately  $12 million for severance and leasehold related
costs in the first quarter of 2001 as a result of this decision.

     International Factoring and Asset Based Finance Segment

     International  Group, the Heller  subsidiary that manages the International
Factoring and Asset Based Financing Segment,  is active in the following product
areas:

     o    working capital finance;
     o    factoring and receivables management services;
     o    asset based financing;
     o    acquisition financing;
     o    leasing and vendor financing; and
     o    trade financing.

     International Group has a significant presence in factoring and asset based
financing,  primarily in Europe.  We have had subsidiaries and joint ventures in
many international markets for more than 30 years. International Group currently
consists  of five  consolidated  subsidiaries  and seven joint  ventures.  These
subsidiaries and joint ventures operate in 17 countries in Europe,  Asia/Pacific
and Latin America.  International  Group has also provided the platforms  within
various foreign markets from which our Global Vendor Finance operation has begun
to expand its reach into foreign markets.

     The largest of our consolidated  subsidiaries is Factofrance,  which is the
leading factoring company in France. Factofrance's traditional clients are small
to  mid-sized,  high-growth  companies  that utilize  factoring to finance their
working  capital  needs.  Factofrance  offers a full range of both  domestic and
international  factoring  services,  including  financing,  credit insurance and
management and collection of accounts receivables.

                                       7
<PAGE>
     During 2001  Factofrance  sold its remaining  interest in one joint venture
and  recognized a gain from the sale of $8 million.  This is  consistent  with a
trend in the last three years of Factofrance  reducing its ownership position in
non-consolidated  joint ventures.  This shift is consistent  with  Factofrance's
strategy  of  originating  a greater  degree  of volume on a direct  origination
basis. As of December 31, 2001,  Factofrance had a 34% interest in one remaining
joint venture.

     In addition to its Paris headquarters,  Factofrance has nine regional sales
offices, which market its services and cover local networks of business referral
sources from brokers or banks.

     Heller has direct  investments in seven joint ventures.  The largest of our
joint ventures is NMB-Heller  Holding N.V.,  which operates in eight  countries,
primarily  Holland,  the United  Kingdom and  Germany.  NMB-Heller  Holding N.V.
principally  provides  secured cash flow and asset based  lending and  factoring
services,  structured  to meet local  area  financing  needs and  opportunities.
NMB-Heller Holding N.V.  generates  business through local shareholder  referral
programs,  financial intermediaries and through direct solicitation.  NMB-Heller
Holding N.V. accounted for 69% of our investment in international joint ventures
at December 31, 2001.  Our  investment in NMB-Heller  Holding N.V.  totaled $155
million and $148 million at December 31, 2001 and 2000, respectively. NMB-Heller
Holding N.V. had total  receivables of $3.5 billion and $3.4 billion at December
31, 2001 and 2000,  respectively,  and revenues of $240 million and $227 million
for the years then ended.  The Holland based  subsidiary  of NMB-Heller  Holding
N.V. accounted for 57% of these receivables and 54% of these revenues for 2001.

     Each of our subsidiaries and joint ventures  operates  independently,  with
its own methods of originating business. The majority of our international joint
ventures are  self-financed.  We manage our  international  investments  through
offices located in London and Chicago. Each subsidiary and joint venture has its
own credit  philosophy,  risk  management  policies and procedures and portfolio
management  processes.  We monitor our  subsidiaries  and joint ventures through
participation  on  their  boards  of  directors,  credit  committees  and  other
executive and administrative bodies.

Competition

     Heller's markets are highly fragmented and extremely competitive.  They are
characterized by competitive factors that vary by product and geographic region.
Our competitors include:

     o    other commercial finance companies;
     o    national and regional banks and thrift institutions;
     o    investment banks;
     o    leasing companies;
     o    investment companies; and
     o    manufacturers and vendors.

     Competition is increasingly  being impacted by a slow-down in the economies
in  countries  in which the  Company  participates.  Competition  is also  being
impacted by industry consolidation, increased emphasis on liquidity and widening
credit  spreads,  with  greater  dispersion  of credit  spreads  for lower rated
credits.

     We compete primarily on the basis of pricing, terms, structure and service.
Our  competitors  often  seek to  compete  aggressively  on the  basis  of these
factors.  We may lose market  share to the extent we are  unwilling to match our
competitors' pricing,  terms or structure in order to maintain our spreads or to
maintain  our  credit  discipline.  To the  extent  that we  match  competitors'
pricing,  terms  or  structure,  we  may  experience  decreased  spreads  and/or
increased risk of credit losses.
                                       8
<PAGE>
Regulation

      Bank Holding Company Act

     Through October 24, 2001 we were subject to the Bank Holding Company Act of
1956 due to the  status of our  majority  owners.  As a result of its  ownership
position,  we were subject to the Bank  Holding  Company Act and were subject to
examination by the Federal Reserve until the Heller Share Acquisition on October
24, 2001.

     In general,  the Bank Holding Company Act limits the activities in which we
could engage to those the Federal  Reserve has  generally  determined  to be "so
closely related to banking . . . as to be a proper  incident  thereto." The Bank
Holding  Company Act  generally  requires  the  approval of the Federal  Reserve
before we could  engage in such  activities.  Our  business  activities  through
October 24, 2001 either  constituted  permitted  activities  or had received the
Federal Reserve's express approval.

      Japanese Banking Law

     Through October 24, 2001, we were subject to the Japanese  Banking Law. The
Banking Law limits the type of  subsidiaries  and affiliates in which a Japanese
bank may invest to those that conduct "eligible businesses." Eligible businesses
generally include banks,  securities firms, insurance companies,  administrative
businesses  and  financial  companies.  Non-eligible  business  investments  are
permitted if acquired as collateral,  although disposition of such businesses is
required  within one year as a general  rule.  Establishment  of any  subsidiary
requires the prior approval of the Financial  Services Agency,  an agency of the
Cabinet  Office.  A  subsidiary  is defined as a  corporation  in which there is
ownership of more than 50% of the voting shares. As a result of the Heller Share
Acquisition,  we are no longer subject to the Japanese  Banking Law.

      Other

     Our  operations  are subject,  in certain  instances,  to  supervision  and
regulation  by state  and  federal  governmental  authorities.  They may also be
subject to various  laws and  judicial  and  administrative  decisions  imposing
various requirements and restrictions, which, among other things:

     o    regulate credit granting activities;
     o    establish maximum interest rates, finance charges and other charges;
     o    require disclosures to customers;
     o    restrict foreign ownership or investment;
     o    govern secured transactions; and
     o    set  collection,   foreclosure,   repossession   and  claims  handling
          procedures and other trade practices.

     Although most states do not regulate  commercial  finance,  certain  states
impose limitations on interest rates and other charges and on certain collection
practices and creditor remedies.  They may also require licensing of lenders and
financiers  and  adequate  disclosure  of certain  contract  terms.  We are also
required to comply with certain  provisions of the Equal Credit  Opportunity Act
applicable to commercial  loans.  Additionally,  we are subject to regulation in
those countries in which we have operations and in most cases have been required
to obtain central governmental approval before commencing business.

     In the judgment of management,  the above and other  existing  statutes and
regulations have not had a material adverse effect on our business.  However, it
is  not  possible  to  forecast  the  nature  of  future   domestic  or  foreign
legislation,  regulations,  judicial  decisions,  orders or interpretations  nor
their  impact  upon  our  future  business,   financial  condition,  results  of
operations or prospects.

                                       9
<PAGE>
Business and Economic Conditions

     Heller's businesses are generally affected by general business and economic
conditions  in  countries  in  which  Heller  operates.  When  overall  economic
conditions  deteriorate in those countries,  there generally are adverse effects
on our operations,  although those effects are dynamic and complex. For example,
a downturn in employment or economic growth in a particular national or regional
economy will generally increase the pressure on customers,  which generally will
result in  deterioration  of repayment  patterns and a reduction in the value of
collateral. However, in such a downturn, demand for loans and other products and
services  offered by Heller  may  actually  increase.  Interest  rates,  another
macro-economic  factor,  are  important  to our  businesses.  In the lending and
leasing  businesses,  higher real  interest  rates  increased our cost to borrow
funds, but also may provide higher levels of return on new investments.


ITEM 2.   PROPERTIES

     We lease office  space for our  corporate  headquarters  at 500 West Monroe
Street,  Chicago,  Illinois 60661. We lease other offices  throughout the United
States,  Canada,  Europe,   Asia/Pacific  and  Latin  America.  For  information
concerning  our lease  obligations,  see Note 10-- Rental  Commitments--  to the
Consolidated Financial Statements.


ITEM 3.   LEGAL PROCEEDINGS

     We are a party to a number of legal proceedings as plaintiff and defendant,
all arising in the ordinary course of our business. We believe that the amounts,
if any,  which we may  ultimately  pay  regarding  these matters will not have a
material  adverse  effect on our  business,  financial  condition  or results of
operations.  However,  we have no assurance that an unfavorable  decision in any
such legal proceeding would not have a material adverse effect.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                            Omitted



                                       10
<PAGE>
                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     On October 24, 2001 over 90% of Heller's issued and outstanding Class A and
Class B Common Stock was acquired by GE Capital.  GE Capital  acquired  Heller's
common stock at $53.75 per share for  approximately  $5.3  billion in cash.  See
Note 2 - GE Capital Merger - to the  consolidated  financial  statements.  Given
that the common stock of the Company is owned  entirely by GE Capital,  there is
no trading market in such stock.

ITEM 6.   SELECTED FINANCIAL DATA

     The  data  presented  below  should  be read in  conjunction  with  Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations and the  Consolidated  Financial  Statements,  and the notes thereto,
appearing elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                              2001(1)(2)  2000(2)(4)   1999(2)(3)     1998(4)     1997
                                                              ----------  ----------   ----------    --------    ------
                                                                 (4)                     (4)
                                                                 ---                     ---
                                                                                 (in millions)
<S>                                                             <C>          <C>        <C>          <C>         <C>
Results of Operations:
Operating revenues..........................................    $ 1,020      $  1,038   $     952    $    783    $  754
Operating expenses..........................................        456           459         456         399       357
Net (loss) income before accounting change..................         (3)          290         284         193       158
Cumulative effect of accounting change......................         (4)           --          --          --        --
Net (loss) income...........................................         (7)          290         284         193       158
</TABLE>
<TABLE>
<CAPTION>
                                                                                  December 31,
                                                              2001(1)(2)  2000(2)(4)   1999(2)(3)     1998(4)     1997
                                                              ----------  ----------   ----------    --------    ------
                                                                  (4)                     (4)
                                                                  ----                    ---
                                                                                 (in millions)
<S>                                                            <C>        <C>          <C>           <C>       <C>
Balance Sheet Data:
Total assets................................................   $  19,818  $   20,061   $   17,973    $ 14,366  $ 12,861
Total debt..................................................      11,605      15,768       13,832      10,449     9,436
Total stockholder's equity..................................       2,262       2,575        2,347       1,962     1,678

</TABLE>
<TABLE>
<CAPTION>
                                                                  As of, or For the Year Ended, December 31,
                                                                  ------------------------------------------
                                                               2001 (1)   2000(2)(4)   1999(2)(3)     1998(4)      1997
                                                               --------   ----------   ----------     -------    ------
                                                                                           (4)
Selected Data and Ratios:
<S>                                                               <C>         <C>          <C>         <C>       <C>
Profitability
Return on average common stockholder's equity(5)............       (1.4)%      12.7%        14.9%       12.4%     10.5%
Return on average common stockholder's equity, net of merger
   expenses, Small Business Finance charges, and cumulative
   effect of accounting change in 2001(1) and net of HCS gain
   in 1999(5)..............................................         8.2        12.7         12.1        12.4      10.5
Ratio of earnings to combined fixed charges and preferred
   stock dividends(6) .....................................        0.91x        1.37x        1.53x       1.39x     1.39x

Credit Quality
Ratio of earning loans delinquent 60 days or more to receivables
                                                                     2.2%       1.7%         1.5%        1.6%      1.4%
Ratio of net writedowns to average lending assets...........         1.2        0.7          0.7         0.7       1.5
Ratio of total nonearning assets to total lending assets....         2.7        1.9          1.5         1.8       1.4
</TABLE>
                                       11
<PAGE>
(1)  The  financial  data  presented  for 2001  reflects the  following one time
     charges  (pre-tax):   a  $304  million  charge  for  expenses  incurred  in
     connection  with  the GE  Capital  merger,  a $12  million  charge  for the
     discontinuation  of Small Business  Finance loans,  and a $6 million charge
     for the cumulative effect of accounting change.

(2)  The financial data presented for 2001,  2000 and 1999 reflects our purchase
     of HealthCare Financial Partners,  Inc. (HCFP) in July 1999. As a result of
     this  purchase,  we  consolidated  the  acquired  assets  as of the date of
     acquisition. Goodwill related to the acquisition totaled approximately $235
     million. The consolidation of HCFP resulted in an increase of approximately
     $535 million in total lending  assets and  investments  and 134  additional
     employees as of the date of acquisition.  This  acquisition had a favorable
     impact on our 1999 net income.

(3)  On  December  1, 1999,  we sold the net assets of our  Commercial  Services
     unit.  The sale consisted of $911 million of factored  accounts  receivable
     and the assumption of $577 million of liabilities due to factoring clients.
     We recognized an after-tax net gain on the transaction of $48 million.

(4)  The financial  data  presented for 2001,  2000,  1999 and 1998 reflects our
     purchase of the domestic  technology  leasing assets of the Dealer Products
     Group  and  the  stock  of  the  Dealer  Products   Group's   international
     subsidiaries   in  November  1998.  As  a  result  of  this  purchase,   we
     consolidated  the acquired  assets and  international  subsidiaries  of the
     Dealer  Products Group as of the date of acquisition.  Goodwill  related to
     this  acquisition  totaled $190 million.  The  consolidation  of the Dealer
     Products  Group  assets  and  subsidiaries   resulted  in  an  increase  of
     approximately $625 million in total assets and approximately 400 additional
     employees as of December 31, 1998 as compared to December 31, 1997.

(5)  Return on average  common  stockholder's  equity is  computed as net income
     less preferred stock dividends paid, divided by average total stockholder's
     equity net of preferred stock.

(6)  The ratio of  earnings  to  combined  fixed  charges  and  preferred  stock
     dividends  is  calculated  by  dividing  (i) income  before  income  taxes,
     minority  interest and fixed charges by (ii) fixed  charges plus  preferred
     stock dividends.


                                       12
<PAGE>
ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following  discussion and analysis  should be read in  conjunction  with the
Selected  Financial Data and Consolidated  Financial  Statements,  including the
notes thereto,  appearing elsewhere in this Form 10-K. The following  discussion
and  analysis  speaks as of December 31, 2001,  except as otherwise  noted,  and
contains  certain  forward-looking  statements,  as  defined  in the  Securities
Exchange Act of 1934, which are generally  identified by the words  anticipates,
believes,  estimates,  expects,  plans,  intends and other similar  expressions.
These statements are subject to certain risks,  uncertainties and contingencies,
which could cause our actual  results,  performance  or  achievements  to differ
materially  from  those  expressed  in, or  implied  by,  such  statements.  See
Cautionary Note Regarding Forward-Looking Statements below.

General

     We  are  in  the   commercial   finance   business,   providing   primarily
collateralized  financing and leasing products and related services to mid-sized
and small businesses in the United States and selected international markets. We
classify the sources of our operating revenues in two broad categories:

o    net interest income; and

o    non-interest income.

     Net  interest  income   represents  the  total  interest  income  we  earn,
principally  through  our  financing  and  leasing  activities,  less the  total
interest  expense we pay on our  interest  bearing  liabilities,  which  largely
relate to the funding of these financing and leasing activities.

Non-interest income consists of:

o    factoring commissions;
o    income from investments in international joint ventures;
o    investment and asset sale income; and
o    fees income and other.

Fees include:

o    loan servicing income;
o    late fees;
o    structuring fees;
o    residual rental income;
o    syndication fees;
o    prepayment fees; and
o    early termination fees.

Other income includes:

o    real estate participation income;
o    our share of income from fund investments;
o    gains from sales,  syndications and  securitizations  of lending assets and
     investments; and
o    equipment residual gains.

     Our primary expenses,  other than interest expense, are operating expenses,
including  employee  compensation and general and administrative  expenses,  and
provision for credit losses.

                                       13
<PAGE>

     Our results of operations  may vary  significantly  from quarter to quarter
based  upon the  timing  of  certain  events,  such as  securitizations  and net
investment gains. See Note 23--Summary of Quarterly  Financial  Information-- of
our Consolidated Financial Statements.


Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

     Results of Operations

Overview. For the year ended December 31, 2001:

o    Net loss totaled $7 million including the effect of one-time charges of the
     following:  $198 million in after-tax  expenses incurred in connection with
     the  GE  Capital   Merger,   an  $8  million   after-tax   charge  for  the
     discontinuation  of the origination of SBA loans through our Small Business
     Finance unit, and a net after-tax  charge for the  cumulative  effect of an
     accounting change of $4 million.

o    Net income was down 102% from the prior year due to the Company's  one-time
     charges  noted above and also due to a 101% increase from the prior year in
     provision  for losses  which was  partially  off-set by income tax benefits
     totaling $45 million.

o    New business  volume  totaled  $5.6 billion and was  strongest in Corporate
     Finance, Real Estate Finance,  Leasing Services and Healthcare Finance. New
     business  volume was  off-set by over $5 billion in  payoffs,  utilization,
     syndications,  and other run-off. This resulted in growth in lending assets
     and investments to $18.8 billion as of December 31, 2001 from $18.7 billion
     at December 31, 2000.

o    Our factoring  volume  totaled $12.8 billion in 2001, a modest  decrease of
     2.4%  from  the  prior  year.   The  decrease  was  primarily  due  to  the
     depreciation of the Euro. In local currency, Factofrance's factoring volume
     was consistent with their 2000 volume.

o    Nonearning  assets were 2.7% of total  lending  assets in 2001, as compared
     with 1.9% of total lending  assets in 2000.  Net writedowns as a percentage
     of average  lending  assets were 1.2% for the year,  an  increase  from the
     prior year's  percentage of 0.70%.  The increase from prior year was driven
     by a  general  downturn  in the  U.S.  economy  during  2001.  Particularly
     impacted was cash flow financings of our Corporate Finance unit.

Operating  Revenues.  The following  table shows our operating  revenues and the
     percentage of operating  revenues to average funds  employed  (AFE) for the
     years ended December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                          For the Year Ended December 31,
                                                          -------------------------------
                                                             2001                 2000
                                                             ----                 ----
                                                                 Percent              Percent
                                                       Amount    of AFE     Amount    of AFE
                                                      --------   -------     -------  -------
                                                             (dollars in millions)
<S>                                                     <C>         <C>      <C>         <C>
     Net interest income ..........................     $ 638       3.6%     $  629      3.7%
     Non-interest income:
         Fees and other income.....................       277       1.6         298      1.8
         Factoring commissions.....................        69       0.4          73      0.4
         Income of international joint ventures....        36       0.2          38      0.2
                                                      --------   -------     -------  -------
              Total operating revenues.............     $1,020      5.8%     $ 1,038     6.1%
                                                      ========   =======     =======  =======
</TABLE>
                                       14
<PAGE>
     Net Interest Income.  The following table shows our net interest income for
the years ended December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                         For the Year
                                                             Ended
                                                         December 31,      Increase/(Decrease)
                                                       ----------------     -----------------
                                                        2001       2000     Amount    Percent
                                                       ------     ------    ------    -------
                                                           (dollars in millions)
<S>                                                    <C>       <C>       <C>          <C>
     Interest income...............................    $1,488    $ 1,628   $ (140)      (8.6)%
     Interest expense..............................       850        999     (149)     (14.9)
                                                        -----     ------    ------
         Net interest income.......................    $  638    $   629   $   9         1.4
                                                        =====    =======    ======
         Net interest income as a
              percentage of AFE....................       3.6%      3.7%
</TABLE>
     Net interest  income  totaled $638 million for the year ended  December 31,
2001,  an increase  of $9 million,  or 1.4%,  from the prior year  period.  This
slight increase in net interest income is driven by the modest growth in average
lending assets and investments.

     Average  funds  employed  totaled  $17.5 billion for 2001, up 3% from $17.0
billion in 2000,  due to new business  lending  volume of $5.6 billion which was
partially off-set by payoffs, utilization, syndications, and other run-off.

     Net interest  income as a  percentage  of AFE is 3.6% at December 31, 2001,
down slightly from 3.7% at December 31, 2000.  The decrease  reflects the impact
of tighter funding spreads in 2001.

Interest rates we charge vary depending on:

     o    risks and maturities of loans;
     o    competition;
     o    our current costs of borrowing;
     o    state usury laws; and
     o    other governmental regulations.

     Our  portfolio of  receivables  earns  interest at both  variable and fixed
rates. The variable rates float in accordance with various agreed upon reference
rates, including LIBOR, the Prime Rate and corporate based lending rates.

     Throughout  2001  and  2000 we  used  interest  rate  swaps  as a tool  for
financial  risk  management.  They enable us to match more  closely the interest
rate and maturity  characteristics  of our assets and  liabilities.  As such, we
used interest rate swaps to:

     o    change the characteristics of fixed rate debt to that of variable rate
          liabilities;
     o    alter the  characteristics  of specific fixed rate asset pools to more
          closely match the interest terms of the underlying financing; and
     o    modify the variable  rate basis of a liability  to more closely  match
          the variable rate basis used for variable rate receivables.

                                       15
<PAGE>
     The following table shows a comparative  analysis of the year-end principal
outstanding  (gross of the  unamortized  discount of $8 million in 2001 and 2000
and excluding mark to market adjustments from hedge accounting treatment of $275
million in 2001) and weighted  average  interest rates we paid on our debt as of
December  31, 2001 and 2000,  respectively,  before and after  giving  effect to
interest rate swaps:
<TABLE>
<CAPTION>
                                                           For the Year Ended December 31,
                                                           2001                        2000
                                                           ----                        ----
                                                Year-end  Before    After   Year-end   Before   After
                                                 Balance  swaps     swaps   balance    Swaps    swaps
                                                 -------  ------    -----   --------   ------   -----
                                                                (dollars in millions)
<S>                                              <C>       <C>      <C>     <C>          <C>     <C>
   Commercial paper--domestic and foreign......  $   215   3.59%    3.59%   $  4,138     6.28%   6.28%
   Fixed rate debt............................     7,376   6.84     6.66       6,320     6.92    6.96
   Variable rate debt.........................     3,014   2.49     2.57       4,345     6.92    6.90
                                                --------                    --------
       Total..................................  $ 10,605   5.54     5.44    $ 14,803     6.74    6.75
                                                ========                    ========
</TABLE>
Non-Interest Income. Our non-interest income is composed of:

     o    factoring commissions;
     o    income of international joint ventures;
     o    investment and asset sale income; and
     o    fees and other income.

     The  following  table  shows our  non-interest  income for the years  ended
December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                          For the
                                                        Year Ended
                                                       December 31,      Increase/(Decrease)
                                                     -----------------   -------------------
                                                       2001      2000     Amount   Percent
                                                     -------    ------   -------   -------
                                                            (dollars in millions)
<S>                                                  <C>        <C>       <C>        <C>
     Factoring commissions.......................    $    69    $   73    $   (4)    (5.5)%
     Income of international joint ventures......         36        38        (2)    (5.3)
     Fees and other income:
         Investment and asset sale income........        148       201       (53)   (26.4)
         Fee income and other....................        129        97        32     33.0
                                                     -------    ------   --------
              Total fees and other income........    $   277    $  298    $  (21)    (7.0)
                                                     -------    ------   --------
                  Total non-interest income......    $   382    $  409    $  (27)    (6.6)
                                                     =======    ======   ========
     Non-interest income as a percentage of AFE..        2.2%     2.4%
</TABLE>
     Factoring  commissions  decreased $4 million, or 5.5%, in 2001 versus 2000.
The decrease is primarily  due to a decline in commission  rates at  Factofrance
along  with  movements  in foreign  exchange  rate as the  factoring  volume for
Factofrance  during  2001 was  consistent  with  their  2000  volume,  at FRF 82
billion.

                                       16
<PAGE>
     Income of international  joint ventures  represents our share of the annual
earnings  or losses of joint  ventures.  The $2 million  decrease in income from
international  joint  ventures  in 2001  versus  2000 was due  primarily  from a
reduction in income from NMB-Heller Holding N.V.

     Fees and other income  totaled $277 million for 2001, a decrease of 7% from
the prior year due to a decrease in investment and asset sale income,  partially
offset by an increase in fee income and other.  Investment and asset sale income
decreased $53 million,  or 26%, as increased  gains from asset sales were offset
by significantly  lower investment income from our equity investments in limited
partnership funds. In addition,  the year ended December 31, 2000 included a net
gain  from the  sale of one  international  investment  and the  liquidation  of
another.  Investment and asset sale income is somewhat  dependent on the equity,
real estate and capital markets and is therefore subject to volatility.

     Fee income and other increased $32 million,  or 33%, compared to 2000. This
increase is primarily due to increased  lending  partnership  income and leasing
renewal income and the impact of hedging activities.

     Operating  Expenses.  The following table shows our operating  expenses for
the years ended December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                         For the
                                                        Year Ended
                                                       December 31,      Increase/(Decrease)
                                                     -----------------   -------------------
                                                       2001      2000     Amount   Percent
                                                     -------    ------   -------   -------
                                                            (dollars in millions)
<S>                                                <C>        <C>      <C>         <C>
    Salaries and other compensation................  $   234    $  236   $   (2)     (0.8)%
    General and administrative expenses............      198       199       (1)     (0.5)
    Goodwill and non-compete amortization..........       24        24        --      --
                                                      ------    ------   -------
          Total....................................  $   456    $  459   $   (3)     (0.7)%
                                                      ======    =======  =======
    Operating expenses as a percentage of average
       managed assets .............................      2.4%      2.6%
    Ratio of operating expenses to operating
       revenues....................................     44.7%     44.2%
    Ratio of operating expenses, excluding goodwill
       and non-compete amortization, as a
       percentage of operating
       revenues....................................     42.4%     41.9%
</TABLE>
     Operating expenses  decreased by $3 million,  or 1%, in 2001 as compared to
2000.

     Allowance  for  Losses.  The  following  table  shows  the  changes  in our
allowance  for losses of  receivables,  including  our  provision  for losses of
receivables for the years ended December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                          For the
                                                        Year Ended
                                                       December 31,      Increase/(Decrease)
                                                     -----------------   -------------------
                                                       2001      2000     Amount    Percent
                                                     -------    ------   -------    -------
                                                               (dollars in millions)
<S>                                                    <C>      <C>        <C>          <C>
     Balance at the beginning of the year..........    $ 342    $  316     $  26        8.2%
         Provision for losses......................      297       148       149      100.7
         Writedowns................................     (225)     (140)      (85)      60.7
         Recoveries................................       31        25         6       24.0
         Transfers and other.......................       (3)       (7)        4      (57.1)
                                                      ------    ------    ------
     Balance at the end of the year................    $ 442    $  342    $  100       29.2
                                                       =====    ======    ======
</TABLE>

     We systematically  evaluate the appropriateness of the allowance for losses
of receivables and adjust the allowance to reflect any necessary  changes in the
credit  quality  and  inherent  risks  and  losses  of our  portfolio.  See Note
1--Summary of Significant  Accounting  Policies-- to our Consolidated  Financial
Statements  for more  information  on our process for evaluating the adequacy of
our allowance for losses of receivables.

     The provision for losses was higher in 2001 than 2000 due to a down-turn in
the economy during 2001 which  negatively  impacted our portfolio,  primarily in
Leasing Services, Small Business Finance, and Corporate Finance.

                                       17
<PAGE>
     Gross  writedowns  totaled  $225  million for 2001 versus $140  million for
2000, while gross recoveries  totaled $31 million in 2001 versus $25 million for
2000. The increase in gross  writedowns  during 2001  primarily  relates to cash
flow  financings  of our  Corporate  Finance  unit and was  driven  by a general
downturn in the U.S. economy.

     The ratio of our allowance for losses of  receivables  to  receivables  was
2.8% as of December 31, 2001,  representing an increase from 2.1% as of December
31, 2000. The Company considers this level of allowance for loan losses adequate
to cover losses inherent in our loan portfolio at December 31, 2001.

     Nonearning  Assets.  We classify  receivables  as  nonearning  when we have
significant  doubt  about the ability of the debtor to meet  contractual  terms.
This may be evidenced by (1) loan delinquency,  (2) reduction of cash flows, (3)
deterioration  in  the  loan  to  value  relationship  and  (4)  other  relevant
considerations.  The table below shows nonearning  assets by business segment in
2001, 2000 and 1999:
<TABLE>
<CAPTION>
                                                           For the Year Ended December 31,
                                                       2001             2000              1999
                                                       ----             ----              ----
                                                 Amount  Percent  Amount   Percent  Amount   Percent
                                                 ------  -------  ------   ------   ------   ------
                                                                (dollars in millions)
<S>                                              <C>         <C>  <C>         <C>   <C>         <C>
   Domestic Commercial Finance.................  $  401      93%  $  270      88%   $  196      86%
   International Factoring and Asset Based
      Finance..................................      30       7       37      12        32      14
                                                 ------    -----  ------    -----    -----    -----
        Total nonearning assets................  $  431     100%  $  307     100%   $  228     100%
                                                 ======    =====  ======    =====    =====    =====
</TABLE>
     Total  nonearning  assets of Heller as of December 31,  2001,  were 2.7% of
total lending  assets.  The increase in nonearning  assets compared to the prior
year is a result  of  increases  in  Leasing  Services  and cash  flow  loans in
Corporate Finance,  both of which were driven by a general down-turn in the U.S.
economy.  Included  in total  nonearning  assets  are  assets  which  consist of
transactions  from  business  activities  we are  no  longer  pursuing.  Amounts
included  in this  category  have  continued  to decline as we  liquidate  these
accounts.

     Delinquent  Earning  Accounts and Loan  Modifications.  Earning accounts 60
days or  greater  past due  totaled  $360  million,  or 2.2% of  receivables  at
December 31, 2001  compared to $267  million or 1.7% at December  31, 2000.  The
level of delinquent earning accounts changes between periods based on the timing
of payments  and the effects of changes in general  economic  conditions  on our
borrowers.  We did not have any troubled debt  restructurings,  which  represent
earning loans restructured at a lower-than-market  rate of interest, at December
31, 2001 and 2000. At December 31, 2001 and 2000,  there was $11 million and $0,
respectively,  of impaired loans that were  restructured and returned to earning
status.

     Income  Taxes.  We  realized  a tax  benefit  in  2001 as a  result  of the
following:

    o    the effect of earnings from international joint ventures;
    o    the use of business related, foreign, and other tax credits;
    o    differences in tax rates on international earnings; and
    o    the impact of international and state tax planning activities.

     Lending Assets and Investments

     Total lending assets and investments  increased $47 million during 2001 due
to  new  business   originations   of  $5.6  billion  offset  by   syndications,
securitizations,  loan sales,  utilization  and payoffs of $5.5 billion.  During
2001,  new  business  volume was  strongest in  Corporate  Finance,  Real Estate
Finance, Leasing Services and Healthcare Finance, as we continued to realize the
benefits of the market positions held by these business units.

                                       18
<PAGE>

     The following tables present our lending assets and investments by business
line and asset type as of December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                                       December 31,
                                                                      -------------
                                                                 2001                2000
                                                                 ----                ----
                                                           Amount   Percent    Amount    Percent
                                                          --------  -------   --------   -------
                                                                   (dollars in millions)
<S>                                                       <C>          <C>    <C>           <C>
     By Business Segment:
     Domestic Commercial Finance Segment
         Corporate Finance (1).........................   $  5,145     27%    $  5,225      28%
         Leasing Services (1)..........................      4,365     23        4,434      24
         Real Estate Finance...........................      3,242     17        2,766      15
         Healthcare Finance............................      1,852     10        1,563       8
         Small Business Finance........................      1,066      6        1,440       8
         Other.........................................        277      2          387       2
                                                          --------    ----    ---------    ----
     Total Domestic Commercial Finance Segment.........     15,947     85       15,815      85
     International Factoring and Asset Based
         Finance Segment (2)...........................      2,816     15        2,901      15
                                                          --------    ----    ---------    ----
            Total lending assets and investments.......   $ 18,763    100%    $ 18,716     100%
                                                          ========    ====    =========    ====
     By Asset Type:
         Receivables...................................   $ 16,068     86%    $ 15,966      85%
         Repossessed assets............................         23     --           22      --
                                                          --------   ----     --------    ----
            Total lending assets.......................     16,091     86       15,988      85
         Equity and real estate investments............        736      4          795       4
         Debt securities...............................        743      4          755       4
         Operating leases..............................        591      3          695       4
         International joint ventures..................        228      1          216       1
         Lending partnerships (3)......................        374      2          267       2
                                                          --------   ----     --------    ----
            Total lending assets and investments.......   $ 18,763    100%    $ 18,716     100%
                                                          =========  ====     =========   ====
            Average lending assets.....................    $15,716            $ 15,456
            Total managed assets.......................     18,969              18,877
            Average managed assets.....................     19,094              17,516
            Funds employed.............................     17,859              17,734
            Average funds employed.....................     17,523              16,978
</TABLE>

(1)  Lending  assets and  investments at December 31, 2001 and 2000 were reduced
     by approximately $900 million and $800 million, respectively, of commercial
     cash flow and equipment loans sold to asset backed commercial paper conduit
     facilities.

(2)  Includes $228 million in  investments  in  international  joint ventures in
     2001 and $216 million in 2000,  representing 1% of total lending assets and
     investments for both 2001 and 2000 year ends.

(3)  Includes interests we hold in partnerships, which have been established for
     the purpose of  providing  financing  through  operating  leases,  loans or
     direct financing  leases. We account for these investments under the equity
     method of accounting.
                                       19
<PAGE>
     As of December 31, 2001, our domestic commercial finance portfolio remained
well diversified among our domestic product units:

o    Corporate  Finance  decreased its lending  assets and  investments  to $5.1
     billion,  or 27% of total lending  assets and  investments,  as a result of
     $1.8 billion in new business volume, which was offset by loan syndications,
     utilization  and  runoff in the  portfolio  of $1.9  billion.  Of the total
     lending assets and  investments of Corporate  Finance at December 31, 2001,
     approximately $900 million, or 17%, represented asset-based financings.

o    Leasing Services  lending assets and investments were $4.4 billion,  or 23%
     of our total lending assets and investments at December 31, 2001,  which is
     in line with  2000.  New  business  volume of $2.0  billion  was  offset by
     payoffs,    utilization,    syndications   and   securitizations   totaling
     approximately $2.1 billion.

o    Real Estate Finance  increased its lending  assets and  investments to $3.2
     billion,  or 17% of our total lending assets and investments as of December
     31, 2001,  as new business  volume of $1.1 billion,  including  nearly $200
     million in the acquisition of a golf course lending portfolio, was slightly
     offset by payoffs,  securitizations,  syndications and utilization totaling
     $631 million.  The growth in lending assets and  investments of Real Estate
     Finance is primarily attributable to the new golf course properties.

o    Healthcare   Finance  increased  its  lending  assets  and  investments  to
     approximately $1.9 billion, or 10% of total lending assets and investments,
     primarily  due to new  business  volume of nearly $600  million,  partially
     offset by nearly $300 million of syndications,  utilizations,  and payoffs.
     Asset  growth in  Healthcare  Finance  was  driven by asset  based and real
     estate financings.

o    Small Business Finance decreased its lending assets and investments by $374
     million primarily due to the decision to discontinue the origination of SBA
     loans.  New  business  volume of $92  million  was more than offset by $466
     million of loan sales and runoff.  During 2001, we sold  approximately $227
     million of SBA 7(a) and 504 loans.

Liquidity and Capital Resources

     Subsequent  to  October  24,  2001,  the  Company's  treasury  actions  are
centrally executed by GE Capital's Treasury Department, which maintains controls
on all  exposures,  adheres to  stringent  counterparty  credit  standards,  and
actively  monitors  marketplace  exposures.  All future funding needs for Heller
will  be  met  through  inter-company   borrowings  from  GE  Capital.   Current
outstanding debt will be paid down as the debt matures.

     At December 31, 2001, we had $4.3 billion in inter-company notes payable to
GE  Capital,  $10.7  billion  in other  notes and  debentures,  $773  million of
commercial  paper and short-term  borrowings,  and $175 million of  subordinated
debt  outstanding.  Prior to the GE Capital Merger we used  commercial  paper to
finance a portion of our domestic  operations.  Our  consolidated  international
subsidiaries  used short-term  borrowings and commercial  paper to finance their
international  operations.  Subsequent to the GE Capital  Merger the majority of
our  commercial   paper   borrowings  were   terminated  and  financed   through
inter-company  notes  with GE  Capital - see Note 19 - Related  Parties - to the
Consolidated Financial Statements.

     Our liquidity and capital resources are impacted by GE Capital's ability to
raise funds. In addition to obtaining  funds from GE Capital,  we have available
liquidity from bank credit and asset sale  facilities.  As of December 31, 2001,
availability  under our committed bank credit and asset sale facilities  totaled
$1.2 billion.  Of this amount,  $650 million was terminated in January 2002 with
the termination of the asset backed commercial paper conduit facility.

     Included  in  committed  facilities  are  foreign  bank  credit  facilities
totaling   $445  million  (U.S.   dollar   equivalent)   for  our   consolidated
international  subsidiaries  and $25 million  under foreign  currency  revolving
credit facilities. As of December 31, 2001, there was approximately $450 million
available under these facilities.  Included in foreign bank credit facilities is
approximately  $129  million  of  additional  alternative  liquidity.   This  is
available by discounting  eligible  French  receivables  with the French Central
Bank since Factofrance,  our wholly-owned subsidiary,  is a registered financial
institution in France.  At December 31, 2001, all of this facility was available
for use.
                                       20
<PAGE>
     At  December  31,  2001 we had an asset  backed  commercial  paper  conduit
facility  that  allowed  us to  sell  participations  in a  designated  pool  of
Corporate  Finance  cash-flow  loans to  bank-sponsored  conduits  on a  limited
recourse basis.  Liquidity support under this facility totaled $1.2 billion,  of
which $550 million was utilized at December 31, 2001. The  underlying  liquidity
support  is  provided  by  unaffiliated  commercial  banks.  This  facility  was
terminated on January 18, 2002.

     We have a 364-day  facility,  expiring May 1, 2002, which allows us to sell
up to $500 million of our equipment  receivables to two bank-sponsored  conduits
on a limited recourse basis. As of December 31, 2001 we had  approximately  $122
million available under this facility.

     During  2001 we raised  $175  million in cash  through  the  issuance  of 7
million units of 7% mandatory  redeemable  preferred  securities  ("Subordinated
Debt"). For further information on the Subordinated Debt, see Note 7 - Debt - of
our Consolidated Financial Statements.

     In addition to these sources of  liquidity,  we have access to $500 million
of additional liquidity support under a Keep Well Agreement.  This agreement has
been in place  since  1983 and was  originally  between  Heller  and Fuji  Bank.
Effective with the Heller Share  Acquisition,  all of the rights and obligations
under the Keep Well Agreement  were assigned from Fuji Bank to GE Capital.  This
agreement,  which cannot be  terminated  by either Heller or GE Capital prior to
December 31, 2002,  also provides that GE Capital will maintain our net worth at
an amount equal to $500 million.  Neither GE Capital nor Fuji Bank has ever been
required to make any capital  contribution  or advance any funds to us under the
Keep Well Agreement.  For more information on the Keep Well Agreement,  see Note
19 - Related Parties - to the consolidated financial statements.

     Our ratio of debt (net of short-term  investments)  to total  stockholder's
equity remained conservative relative to finance industry peers at 5.1 times and
5.9 times at December 31, 2001 and 2000, respectively. Leverage and the level of
commercial paper and short-term  borrowings  continued to remain within targeted
ranges, which will allow us to maintain a strong financial position.

     Principal  Debt  Conditions.  The  principal  debt  conditions  that  could
automatically  result in remedies,  such as  acceleration of the Company's debt,
are described below.

o    If Heller's bond rating were to fall below A/A2/A-1/VMIG-1, Heller would be
     required to  purchase  certain  bonds by a draw on a letter of credit,  but
     would not  retire  the bonds  until the  rating  improves  or until  Heller
     consents to lower rated  bonds.  The  maximum  amount that Heller  would be
     required  to purchase in the event of such a  downgrade  is $20  million at
     December 31, 2001.

o    If Heller's bond rating is downgraded,  the  remarketing  agent on Heller's
     subordinated  debt is not  required  to proceed  under their  agreement  to
     remarket  the  subordinated  debt in 2004.  Heller  could  renegotiate  the
     agreement  or  replace  the  remarketing  agent as long as  remarketing  is
     viable. If this is not possible,  the rate would be reset at a default rate
     which could be as high as two year Treasury + 3% for the remaining two year
     term.

     Management believes that under any reasonable future economic developments,
the  likelihood  is remote that any such  arrangements  could have a significant
effect on the Company's operations, cash flows or financial position.

     Contractual  Commitments.  The timing of contractual commitments at Heller,
related to leases and debt, are as follows:
<TABLE>
<CAPTION>
     (In millions)                    2002            2003           2004            2005           2006
                                  -----------     -----------    ------------     ---------     -----------
<S>                               <C>             <C>            <C>              <C>           <C>
     Commercial paper.......      $      215      $      --      $     --         $     --      $     --
     Other..................           3,705          3,126         1,023            1,046           930
</TABLE>
                                       21
<PAGE>
Interest Rate and Currency Risk Management

     Interest  rate and  currency  risk  management  is  important in the normal
business  activities of the Company.  Heller is exposed to certain interest rate
and foreign currency risks that result from funding  investments in longer-term,
fixed-rate and foreign currency  denominated assets using short-term U.S. dollar
denominated borrowings. Effective with the GE Capital Merger, GE Capital manages
Heller's  interest rate and foreign  currency risks on a consolidated GE Capital
basis.  While GE Capital manages those exposures on a consolidated basis through
a variety of hedging  activities,  including  the use of interest  and  currency
swaps and  currency  forwards,  those  hedging  activities  are  executed by the
Treasury  function of GE Capital and their  effects are excluded from the Heller
legal  entity.  Because  Heller is not  entitled to benefit  from those  hedging
activities, the effects of the overall hedging strategies of GE Capital, as they
relate to managing the interest rate and foreign currency risks presented by the
operations,  assets and  liabilities  of the Company,  are not  reflected in the
consolidated financial statements of Heller.

     Derivative  financial  instruments  had been used by Heller prior to the GE
Capital  Merger to mitigate or eliminate  certain  financial  and market  risks,
including  those  related to changes in  interest  rates and  currency  exchange
rates.  As a matter of policy,  Heller does not engage in  derivatives  trading,
derivatives market-making,  or other speculative activities. During 2001, Heller
terminated or assigned to GE Capital the majority of our hedge positions. Heller
no longer engages in hedging activity. More detailed information regarding these
financial  instruments  is  contained  in  Notes  1  and 8 to  the  consolidated
financial statements.

     The U.S.  Securities  and Exchange  Commission  requires  that  registrants
provide  information  about  potential  effects of changes in interest rates and
currency  exchange.  Although the rules offer  alternatives  for presenting this
information,  none of the  alternatives  is without  limitations.  The following
discussion is based on so-called  "shock-tests," which model effects of interest
rate and currency shifts on the reporting  company.  Shock tests, while probably
the most meaningful  analysis  permitted,  are  constrained by several  factors,
including the necessity to conduct the analysis  based on a single point in time
and by their  inability to include the complex  market  reactions  that normally
would arise from the market shifts modeled. While the following results of shock
tests for changes in interest  rates and currency  exchange  rates may have some
limited use as benchmarks, they should not be viewed as forecasts.

o    One  means  of   assessing   exposure  to  interest   rate   changes  is  a
     duration-based  analysis that  measures the potential  loss in net earnings
     resulting  from a  hypothetical  increase  in  interest  rates of 100 basis
     points across all maturities (sometimes referred to as a "parallel shift in
     the  yield  curve").  Assuming  our  balance  sheet and  off-balance  sheet
     positions  were to remain  constant  and no actions were taken to alter the
     existing  interest  rate  sensitivity  at  December  31,  2001 and 2000,  a
     hypothetical immediate 100 basis point parallel shift in yield curves would
     affect operating net income by less than 3.2% and 0.7%, respectively,  over
     a six month  horizon.  The  increase in  interest  rate  sensitivity  as of
     December 31, 2001 is due  primarily  to the  elimination  of interest  rate
     swaps after the GE Capital Merger.

o    Additionally,  if our balance sheet and off-balance sheet positions were to
     remain constant and no actions were taken to alter the existing Prime/Libor
     exposure  existing  at  December  31,  2001  and  2000,  a 30  basis  point
     compression  in the  existing  basis  would alter  operating  net income by
     approximately 0.8% and 1.0%, respectively, over a twelve month horizon.

o    The geographic  distribution  of the Company's  operations is diverse.  One
     means of  assessing  exposure to changes in currency  exchange  rates is to
     model  effects on changes in foreign  net  investment  using a  sensitivity
     analysis.   Year-end  2001  consolidated   currency  exposures,   including
     financial instruments  designated and effective as hedges, were analyzed to
     identify  Heller's assets and  liabilities  denominated in other than their
     relevant functional currency.  Net unhedged exposures in each currency were
     then remeasured assuming a 10% decrease in currency exchange rates compared
     with the U.S. dollar.  Under this model,  management  estimated at year-end
     2001 that such a decrease would have an insignificant effect on our foreign
     net investment.
                                       22
<PAGE>
Critical Accounting Policies

     High-quality   financial   statements   require  rigorous   application  of
high-quality accounting policies. The policies discussed below are considered by
management  to be  critical  to an  understanding  of  the  Company's  financial
statements  because their  application  places the most  significant  demands on
management's  judgment,  with financial  reporting results relying on estimation
about the effect of matters that are  inherently  uncertain.  Specific risks for
these critical  accounting  policies are described in the following  paragraphs.
For all of these policies, management cautions that future events rarely develop
exactly as forecast, and the best estimates routinely require adjustment.

     Losses on receivables are recognized when they are incurred. Measurement of
such losses requires consideration of historical loss experience,  including the
need to adjust for current conditions,  and judgments about the probable effects
of relevant  observable  data,  including  present  economic  conditions such as
delinquency  rates,  financial health of specific  customers and market sectors,
collateral  value,  and the present and expected levels of interest  rates.  The
Company's  receivables at year-end 2001 was  approximately  $16 billion  against
which an  allowance  for losses of  approximately  $442  million  was  provided.
Further  information is provided in Notes 1 and 5 to the Consolidated  Financial
Statements.

     Impairment of investment  securities results in a charge to operations when
a market  decline  below  cost is other  than  temporary.  Management  regularly
reviews each investment  security for impairment  based on criteria that include
the extent to which cost  exceeds  market  value,  the  duration  of that market
decline and the financial health of and specific  prospects for the issuer.  The
Corporation's  investment  securities  amounted to  approximately  $2 billion at
year-end 2001,  including equity and real estate  investments,  debt securities,
and operating  leases.  Net unrealized  losses  included in that carrying amount
related to debt  securities  was $64  million.  Net  unrealized  gains on equity
securities was $9 million.  The Company actively performs  comprehensive  market
research, monitors market conditions and segments its investments by credit risk
in order to minimize impairment risks.  Further information is provided in Notes
1 and 6 to the Consolidated Financial Statements.

     Other loss  contingencies  are recorded as liabilities  when it is probable
that a  liability  has been  incurred  and the amount of the loss is  reasonably
estimable.  Disclosure is required when there is a reasonable  possibility  that
the ultimate loss will exceed the recorded provision. Contingent liabilities are
often  resolved  over long time periods.  Estimating  probable  losses  requires
analysis of multiple  forecasts that often depend on judgments  about  potential
actions by third parties such as regulators.

     Other  significant  accounting  policies,  not  involving the same level of
measurement  uncertainties as those discussed above, are nevertheless  important
to an understanding of the financial  statements.  Policies related to financial
instruments  and  consolidation  policy require  difficult  judgments on complex
matters that are often subject to multiple  sources of  authoritative  guidance.
Certain of these  matters are among  topics  currently  under  reexamination  by
accounting standards setters and regulators.  It is not possible at this time to
predict the impact of Heller's results of operations or financial condition from
these  reexaminations.  Also  see Note 1 -  Summary  of  Significant  Accounting
Policies  -  which  discusses  accounting  policies  that  must be  selected  by
management when there are acceptable alternatives.

                                       23
<PAGE>
Accounting Developments

Statement of Financial Accounting Standards No. 141 and No. 142

     SFAS  141,  Business  Combinations,   and  SFAS  142,  Goodwill  and  Other
Intangible Assets, modify the accounting for business combinations, goodwill and
identifiable  intangible  assets.  As of  January  1,  2002,  all  goodwill  and
indefinite-lived   intangible  assets  must  be  tested  for  impairment  and  a
transition  adjustment will be recognized.  Management has determined that there
is no  impairment  of  goodwill  under  these  new  standards  upon  transition.
Amortization of goodwill will cease as of January 1, 2002, and, thereafter,  all
goodwill  and any  indefinite-lived  intangible  assets  must be tested at least
annually  for  impairment.   The  adoption  of  this  statement  will  eliminate
amortization  of goodwill which will have an approximate  $18 million  after-tax
positive impact on annual earnings.


Statement of Financial Accounting Standards No. 143

     SFAS 143, Accounting for Asset Retirement Obligations, requires recognition
of the fair value of  obligations  associated  with the retirement of long-lived
assets  when there is a legal  obligation  to incur such  costs.  This amount is
accounted for like an additional element of the corresponding  asset's cost, and
is depreciated over that asset's useful life. SFAS 143 will be effective for the
Corporation on January 1, 2003.  Management has not yet determined the effect of
adopting this standard on the  Corporation's  financial  position and results of
operations.


Statement of Financial Accounting Standards No. 144

     In  August  2001,  the  FASB  issued  Statement  144,  Accounting  for  the
Impairment  or Disposal of Long-Lived  Assets  ("SFAS No.  144").  The Statement
supercedes Statement 121, Accounting for the Impairment of Long-Lived Assets and
for  Long-Lived  Assets to Be Disposed of and APB Opinion No. 30,  Reporting the
Results  of  Operations--Reporting  the  Effects of  Disposal  of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions, for segments of a business to be disposed of. SFAS No. 144 retains
the  requirements of Statement 121 relating to recognition and measurement of an
impairment  loss and  resolves  certain  implementation  issues  resulting  from
Statement  121.  This  Statement is effective for fiscal years  beginning  after
December  15,  2001 and is not  expected  to have a  significant  impact  on the
Company.

Cautionary Note Regarding Forward-Looking Statements

     This Form 10-K Annual Report and the information  incorporated by reference
in it includes or will include forward-looking statements, as defined in Section
27A of the  Securities Act and Section 21E of the Exchange Act, that reflect our
current expectations regarding our future results of operations, performance and
achievements.  We intend for these  forward-looking  statements to be covered by
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995. We have tried to identify these forward-looking  statements by using words
such as anticipates,  believes,  estimates,  expects,  plans,  intends and other
similar expressions.  These forward-looking  statements are based on information
currently  available  to  us  and  are  subject  to  risks,   uncertainties  and
contingencies, which could cause our actual results, performance or achievements
for 2002 and beyond to differ  materially from those expressed in, or implied by
these statements.

     These risks,  uncertainties and contingencies  include, but are not limited
to, the following:

o    the success or failure of our efforts to implement our business strategy;

o    changes in overall  economic  conditions and the impact of those conditions
     on the  performance  of our borrowers and lessees,  on the markets in which
     they conduct  business and access  capital,  and on the capital  markets in
     which we syndicate and securitize our assets;

o    changes in the  volume and mix of  interest  earning  assets,  the level of
     interest  rates  earned on those  assets,  the  volume of  interest-bearing
     liabilities and the level of interest rates paid on those  interest-bearing
     liabilities;

o    currency exchange rate fluctuations, economic conditions and competition in
     international markets;

o    actions of our competitors and our ability to respond to those actions;

                                       24
<PAGE>
o    the cost of our capital,  which depends in part on our  portfolio  quality,
     our debt  ratings,  our  financial  performance,  prospects and outlook and
     general market conditions;

o    the adequacy of our allowance for losses of receivables;

o    risk associated with the value and recoverability of leased assets;

o    actual  results in connection  with exited  businesses  and  disposition of
     assets;

o    our ability to attract and retain  qualified  and  experienced  management,
     sales and credit personnel; and

o    changes in governmental regulations, tax rates and similar matters.

     You should not place  undue  reliance  on any  forward-looking  statements.
Except as otherwise required by federal securities laws, we assume no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events, changed circumstances or otherwise.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

     Information  about  potential  effects  of changes  in  interest  rates and
currency  exchange on the Company is discussed in the Interest Rate and Currency
Risk Management section of Item 7.


                                       25
<PAGE>
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                     HELLER FINANCIAL, INC. AND SUBSIDIARIES

                          INDEPENDENT AUDITORS' REPORT

To the Stockholder of Heller Financial, Inc.:

     We have  audited  the  accompanying  consolidated  balance  sheet of HELLER
FINANCIAL,  INC. (a Delaware  corporation)  AND  SUBSIDIARIES as of December 31,
2001 and the related consolidated statements of income, changes in stockholder's
equity  and cash flows for the year then  ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

     We conducted our audit in  accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the  financial  position of Heller
Financial,  Inc.  and  Subsidiaries  as of December  31, 2001 and the results of
their  operations  and their cash flows for the year then ended,  in  conformity
with accounting principles generally accepted in the United States of America.


                                                           KPMG LLP

Chicago, Illinois
May 23, 2002



                                       26
<PAGE>

                     HELLER FINANCIAL, INC. AND SUBSIDIARIES

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Heller Financial, Inc.:

We have audited the accompanying consolidated balance sheet of HELLER FINANCIAL,
INC. (a Delaware corporation) AND SUBSIDIARIES as of December 31, 2000, and the
related consolidated statements of income, changes in stockholder's equity and
cash flows for each of the two years in the period ended December 31, 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Heller Financial,
Inc. and Subsidiaries as of December 31, 2000, and the consolidated results of
their operations and their cash flows for each of the two years in the period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.


                           .........                 Arthur Andersen LLP

Chicago, Illinois
January 16, 2001


This report of Arthur Andersen LLP, the former independent public accountants
for Heller, is a copy of the original report dated January 16, 2001 rendered by
Arthur Andersen LLP on the prior years' financial statements, and has not been
reissued by Arthur Andersen LLP since that date. In the course of preparing its
financial statements for the year ended December 31, 2001, nothing came to the
attention of Heller that suggested that the financial statements for the years
ended December 31, 2000 and 1999 as set forth in this Annual Report on Form 10-K
contain any material inaccuracies. Heller's financial statements for the year
ended December 31, 2001 are reported on by KPMG LLP at page 26 of this Annual
Report on Form 10-K. Heller is including this copy of the January 16, 2001
Arthur Andersen LLP report pursuant to Rule 2-02(e) of Regulation S-X under the
Securities Act of 1933.

                                       27
<PAGE>
<TABLE>
<CAPTION>
                     HELLER FINANCIAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                                                             December 31,
                                                                                            2001      2000
                                                                                          --------  --------
                                         ASSETS                                             (in millions)
                                         ------
<S>                                                                                       <C>        <C>
Cash and cash equivalents.............................................................    $    540  $    732
Receivables (Notes 5 and 22)
     Commercial loans
          Term loans..................................................................       4,631     4,973
          Revolving loans.............................................................       1,873     2,052
     Real estate loans................................................................       3,349     2,686
     Factored accounts receivable.....................................................       2,514     2,615
     Equipment loans and leases.......................................................       3,701     3,640
                                                                                          --------  --------
          Total receivables...........................................................      16,068    15,966
     Less: Allowance for losses of receivables (Note 5)...............................         442       342
                                                                                          --------  --------
          Net receivables.............................................................      15,626    15,624
Equity and real estate investments (Note 6)...........................................         736       795
Debt securities (Note 6)..............................................................         743       755
Operating leases (Note 6).............................................................         591       695
Investments in international joint ventures (Note 6)..................................         228       216
Lending partnerships (Note 6) ........................................................         374       267
Goodwill (Note 6).....................................................................         436       458
Other assets (Note 6).................................................................         544       519
                                                                                          --------  --------
          Total assets................................................................     $19,818  $ 20,061
                                                                                          ========  ========
                          LIABILITIES AND STOCKHOLDER'S EQUITY
Debt (Note 7)
     Commercial paper and short-term borrowings.......................................    $    773  $  5,111
     Notes and debentures.............................................................      10,657    10,657
     Subordinated debt ...............................................................         175        --
                                                                                          --------  --------
          Total debt..................................................................      11,605    15,768
Credit balances of factoring clients..................................................         905       982
Notes payable to GE Capital  (Note 19) ...............................................       4,327        --
Other payables and accruals ..........................................................         706       724
                                                                                           -------  --------
          Total liabilities...........................................................      17,543    17,474
Minority interest.....................................................................          13        12
Stockholder's equity
     Non-redeemable preferred stock (Notes 11 and 12).................................         275       400
     Class A Common Stock ($.25 par;  1,000 and  500,000,000  shares  authorized;  100
         and 46,347,832 shares issued; and 100 and 45,450,329 shares  outstanding,  in
         2001 and 2000, respectively) (Notes 2 and 13)................................          --        12
     Class B  Common  Stock  ($.25  par;  0 and  300,000,000  shares  authorized;  0 and
         51,050,000  shares  issued  and  outstanding,  in 2001 and 2000,  respectively)
         (Note 2).....................................................................          --        13
     Additional paid in capital.......................................................       1,594     1,631
     Retained earnings (Note 12)......................................................         498       554
     Treasury stock, at cost (0 shares in 2001 and 897,503 in 2000) (Notes 2 and 13)..          --       (19)
     Accumulated other comprehensive loss.............................................        (105)      (16)
                                                                                          --------  --------
          Total stockholder's equity..................................................       2,262     2,575
                                                                                          --------  --------
          Total liabilities and stockholder's equity..................................    $ 19,818  $ 20,061
                                                                                          ========  ========
</TABLE>
   The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
                                       28
<PAGE>

                     HELLER FINANCIAL, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                                      For the Year Ended
                                                                                         December 31,
                                                                                     2001      2000      1999
                                                                                    -----     -----     -----
                                                                                        (in millions)
<S>                                                                                <C>      <C>       <C>
Interest income................................................................... $1,488   $ 1,628   $ 1,197
Interest expense..................................................................    850       999       685
                                                                                    -----    ------   -------
     Net interest income..........................................................    638       629       512

Fees and other income (Note 14)...................................................    277       298       286

Factoring commissions.............................................................     69        73       119

Income of international joint ventures............................................     36        38        35
                                                                                    -----    ------   -------
     Operating revenues...........................................................  1,020     1,038       952
Operating expenses (Note 15)......................................................    456       459       456

Provision for losses (Note 5).....................................................    297       148       136
Gain on sale of Commercial Services assets (Note 4) ..............................     --        --        79
Merger expenses (Note 2) .........................................................    304        --        --
Small Business Finance charge (Note 16) ..........................................     12        --        --
                                                                                    -----     -----     -----
      (Loss) income before taxes, minority interest, and cumulative effect of
        accounting change.........................................................    (49)      431       439
Income tax provision (Note 18)....................................................    (48)      139       154
Minority interest.................................................................      2         2         1
                                                                                    -----     -----     -----
      (Loss) income before cumulative effect of accounting change.................  $  (3)    $ 290    $  284
Cumulative effect of accounting change (net of tax) (Note 1)......................     (4)       --        --
                                                                                    -----     -----     -----
     Net (loss) income............................................................  $  (7)    $ 290     $ 284
                                                                                    =====     =====     =====

</TABLE>
                 The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

                                       29
<PAGE>
<TABLE>
<CAPTION>
                    HELLER FINANCIAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                    For the Year Ended
                                                                                       December 31,
                                                                                    2001      2000     1999
                                                                                    ----      ----     ----
                                                                                       (in millions)
<S>                                                                                <C>      <C>       <C>
OPERATING ACTIVITIES
  Net (loss) income.............................................................   $  (7)   $  290    $ 284
  Adjustments to reconcile net (loss) income to net cash provided by operating
activities:
    Provision for losses........................................................     297       148      136
    Losses from equity investments..............................................      75        17       21
    Amortization and depreciation...............................................      57        54       46
    Provision for deferred tax (asset) liability................................     (53)       67       40
    Increase (decrease) in accounts payable and accrued liabilities.............     241        (6)     206
    Undistributed income of international joint ventures........................     (19)      (33)     (21)
    (Decrease) increase in interest payable.....................................     (42)       56       20
    Net decrease (increase) in other assets.....................................      75       (33)     (23)
    Other.......................................................................      46         7       33
                                                                                    ----      ----    -----
      Net cash provided by operating activities.................................     670       567      742
INVESTING ACTIVITIES
  Increase in longer-term loans
      Due to HCFP acquisition...................................................      --        --     (535)
    Due to fundings.............................................................  (5,134)   (6,887)  (7,334)

  Collections of principal......................................................   1,784     1,579    2,476
  Loan sales, securitizations, participations, and syndications.................   1,406     3,014    2,425
  Net decrease (increase) in short-term loans and advances to factoring clients
      Due to sale of HCS assets.................................................      --        --      334
    Other.......................................................................   1,802       613   (1,066)
  Investment in operating leases................................................     (57)     (600)    (278)
  Investment in equity interests and other investments..........................    (626)     (332)    (447)
  Goodwill and non-competition agreement from acquisitions......................      --        --     (238)

  Sales of investments and equipment on lease...................................     284       515      337
  Other ........................................................................      --        --       48
                                                                                    ----      ----     ----
      Net cash used for investing activities....................................    (541)   (2,098)  (4,278)
FINANCING ACTIVITIES
  Senior note issues............................................................   3,033     4,695    4,805
  Retirement of notes and debentures............................................  (3,282)   (2,797)  (2,932)
  (Decrease) increase in commercial paper and other short-term borrowings.......  (4,338)      (75)   1,521
  Redemption of cumulative perpetual preferred stock series A...................    (125)       --       --
  Net proceeds from common stock issuance/ re-issuance..........................      31         1      192
  Repurchase of Class A Common Stock (Note 13)..................................      (8)      (10)      (2)
    Settlement of restricted stock..............................................     (14)       --       --
  Net increase in advances from affiliates......................................   4,324        --        6
    Issuance of mandatory redeemable preferred trust securities.................     175        --       --
  Cash dividends paid on preferred and common stock.............................     (53)      (68)     (62)
  Other.........................................................................     (64)        1       (5)
                                                                                   -----     -----    ------
      Net cash (used for) provided by financing activities......................    (321)    1,747    3,523
(Decrease) increase in cash and cash equivalents................................    (192)      216      (13)
Cash and cash equivalents at the beginning of the year..........................     732       516      529
                                                                                  ------     -----    -----
Cash and cash equivalents at the end of the year................................  $  540     $ 732    $ 516
                                                                                  ======     =====    =====
</TABLE>
                 The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
                                       30
<PAGE>
<TABLE>
<CAPTION>
                     HELLER FINANCIAL, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

                                                                                                   Accum.
                                                               Class A   Class B           Add'l   Other
                                                     Preferred  Common   Common  Treasury  Paid   Compre-                  Compre-
                                                      Stock     Stock     Stock   Stock     In    hensiv   Retained        hensive
                                                     (Note 11) (Note 2) (Note 2)(Note 13) Capital Income   Earnings  Total  Income
                                                      -------  -------  -------- -------  ------- -------  -------- ------ -------
                                                                          (in millions)
<S>                                                  <C>       <C>      <C>      <C>     <C>      <C>      <C>     <C>
BALANCE AT DECEMBER 31, 1998.......................   $   400   $   10   $    13  $   (8) $ 1,435  $    1   $   111 $1,962
Comprehensive Income:
Net income.........................................        --       --        --      --       --      --       284    284  $  284
  Other comprehensive loss, net of tax:
    Unrealized   loss  on  securities,   net  of  tax
benefit of $8......................................        --       --        --      --       --      --        --    (15)    (15)
    Foreign  currency  translation  adjustments,  net
of  tax of $ (56)..................................        --       --        --      --       --      --        --    (13)    (13)
                                                                                                                            ------
  Other comprehensive loss.........................        --       --        --      --       --     (28)       --     --     (28)
                                                                                                                            ------
Comprehensive income...............................        --       --        --      --       --      --        --     --   $ 256
                                                                                                                            ======
Issuance of Class A Common Stock ..................        --        2        --      --      190      --        --    192
Repurchase of Class A Common Stock (Note 13).......        --       --        --      (1)      --      --        (1)    (2)
Vesting of Restricted Shares.......................        --       --        --      --        1      --        --      1
Preferred stock dividends (Notes 11 and 12)........        --       --        --      --       --      --       (28)   (28)
Common stock dividends (Note 12)...................        --       --        --      --       --      --       (34)   (34)
                                                      -------  -------  -------- -------  ------- -------  -------- ------
BALANCE AT DECEMBER 31, 1999.......................   $   400   $   12   $    13  $   (9) $ 1,626  $  (27)  $ 2,347   $332

Comprehensive Income:
Net income.........................................        --       --        --      --       --      --       290    290  $  290
  Other comprehensive income, net of tax:
    Unrealized gain on securities, net of tax of $2        --       --        --      --       --      --        --      3       3
    Foreign currency translation adjustments,  net
      of tax of $ (34).............................        --       --        --      --       --      --        --      8       8
  Other comprehensive income.......................        --       --        --      --       --      11        --     --      11
                                                                                                                             -----
Comprehensive income...............................        --       --        --      --       --      --        --     --  $  301
                                                                                                                             =====
Re-issuance of Class A Common Stock ...............        --       --        --      --        1      --        --      1
Repurchase of Class A Common Stock (Note 13).......        --       --        --     (10)      --      --        --    (10)
Vesting of Restricted Shares.......................        --       --        --      --        4      --        --      4
Preferred stock dividends (Notes 11 and 12)........        --       --        --      --       --      --       (29)   (29)
Common stock dividends (Note 12)...................        --       --        --      --       --      --       (39)   (39)
                                                      -------  -------  -------- -------  ------- -------  -------- ------
BALANCE AT DECEMBER 31, 2000.......................   $   400   $   12   $    13  $  (19) $ 1,631  $  (16) $    554 $2,575
                                                      =======  =======  ======== =======  ======= =======  ======== ======
Comprehensive (Loss) Income:
Loss before cumulative effect of accounting change.        --       --        --      --       --      --        (3)    (3)  $  (3)
  Other comprehensive (loss) income, net of tax:
    Transition   adjustment   related
      to  accounting change, net of tax of $(2)....        --       --        --      --       --      --        --     (4)     (4)
    Unrealized  loss on qualifying  cash flow
      hedges, net of tax of $(3)...................        --       --        --      --       --      --        --     (5)     (5)
    Reclassification into earnings of realized
      losses on cash flow hedges,
      net of tax of $1 ............................        --       --        --      --       --      --        --      2       2
    Unrealized  loss  on  securities,
      net  of tax of $(32) ........................        --       --        --      --       --      --        --    (55)    (55)
    Foreign currency translation adjustments,
      net of tax of $1.............................        --       --        --      --       --      --        --    (27)    (27)
  Other comprehensive loss.........................        --       --        --      --       --     (89)       --     --     (89)
                                                                                                                              ----
Comprehensive loss.................................        --       --        --      --       --      --        --     --   $ (92)
                                                                                                                              ====
Issuance of Class A Common Stock ..................        --       --        --      --       31      --        --     31
Repurchase of Class A Common Stock (Note 13).......        --       --        --      (8)      --      --        --     (8)
Redemption of cumulative  perpetual  preferred
  stock, series A..................................      (125)      --        --      --       --      --        --   (125)
Vesting of Restricted Shares.......................        --       --        --      --       12      --        --     12
Settlement of Restricted Shares....................        --       --        --      --      (14)     --        --    (14)
Preferred stock dividends (Notes 11 and 12)........        --       --        --      --       --      --       (24)   (24)
Common stock dividends (Note 12)...................        --       --        --      --       --      --       (29)   (29)
Recapitalization in connection with merger (Note 2)        --      (12)      (13)     17        8      --        --     --
Other .............................................        --       --        --      10      (74)     --        --    (64)
                                                      -------  -------  -------- -------  ------- -------  -------- ------
      BALANCE AT DECEMBER 31, 2001.................    $  275   $   --   $    --  $   --  $ 1,594   $(105)  $   498 $2,262
                                                      =======  =======  ======== =======  ======= =======  ======== ======

     The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</TABLE>
                                       31
<PAGE>

                     HELLER FINANCIAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies

     Description of the Reporting Entity--

     Heller Financial, Inc. (including its consolidated subsidiaries,  Heller or
the  Company,  which may be referred to as we, us or our)  furnishes  commercial
finance  services to businesses in the United States and invests in and operates
commercial  finance companies  throughout the world. We provide our products and
services to  mid-sized  and small  businesses  principally  through two business
segments,  (1) Domestic  Commercial Finance and (2) International  Factoring and
Asset Based Finance.  The Domestic  Commercial  Finance  segment is comprised of
five business units: (i) Corporate Finance (Corporate Finance), (ii) Real Estate
Financial  Services  (Real Estate  Finance),  (iii)  Leasing  Services  (Leasing
Services),  (iv) Healthcare Finance (Healthcare  Finance) and (v) Small Business
Finance (Small Business  Finance) --See Note 16 --Small Business Finance Charge.
Our International Factoring and Asset Based segment, managed by our wholly-owned
subsidiary,  Heller International Group, Inc.  (International  Group),  provides
international  factoring  and asset  based  financing  to medium  size and small
companies.

     In May 1998,  we  issued  38,525,000  shares of Class A Common  Stock in an
initial  public  offering (the  Offering).  During 1998, we also issued  505,912
shares of restricted Class A Common Stock to management.  After the Offering and
the issuance of shares to  management,  there were  90,080,912  shares of common
stock  issued,  of which Fuji America  Holdings,  Inc.  (FAHI),  a  wholly-owned
subsidiary  of The Fuji  Bank,  Limited  (Fuji  Bank),  which is a  wholly-owned
subsidiary of Mizuho  Holdings,  Inc.  (Mizuho) owned 79% of the voting interest
and 57% of the economic interest of Heller's issued common stock.

     In July  1999,  we issued  7.3  million  shares of Class A Common  Stock in
conjunction with the HealthCare  Financial Partners  acquisition.  See Note 3 --
HealthCare  Financial  Acquisition--  for more  details.  Our issuance of common
stock related to this  transaction  reduced FAHI's  economic  interest in Heller
from 57% to 52%.

     On October 24, 2001, over 90% of Heller's  issued and  outstanding  Class A
and Class B Common  Stock was acquired by Hawk  Acquisition  Corp.  ("Hawk"),  a
direct wholly owned  subsidiary of General  Electric  Capital  Corporation  ("GE
Capital")  pursuant  to a tender  offer (the  "Heller  Share  Acquisition").  On
October 25, 2001, Hawk was merged with and into Heller,  with Heller  continuing
as the surviving  corporation  and a wholly owned  subsidiary of GE Capital (the
"GE  Capital  Merger").  See Note 2 - GE  Capital  Merger - to the  consolidated
financial  statements.  GE Capital acquired  Heller's common stock at $53.75 per
share for  approximately  $5.3  billion in cash.  GE  Capital is a  wholly-owned
subsidiary of General Electric Capital Services, Inc., the common stock of which
is in turn wholly-owned  directly or indirectly by General Electric Company.


     Basis of Presentation--

     The accompanying  consolidated financial statements include the accounts of
the Company and our majority-owned  subsidiaries.  All significant inter-company
accounts and transactions have been eliminated in consolidation.  We account for
investments in affiliated  companies  owned 50% or less using the equity method.
We have included  certain  temporary  interests in  investments  and carry those
temporary investments at cost.

                                       32
<PAGE>
     Use of Estimates--

     Preparing  financial  statements in conformity with  accounting  principles
generally  accepted  in the United  States  requires  us to make  estimates  and
assumptions.  These estimates and assumptions may affect the reported amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
at the  financial  statement  date and the  reported  amounts  of  revenues  and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

     Cash and Cash Equivalents--

     Cash and cash equivalents  consist of cash deposits maintained in banks and
short-term debt securities with original maturities of less than 60 days.

     Receivables--

     We present  receivables net of unearned  income,  which generally  includes
deferred loan origination and commitment fees and direct loan origination costs.
We also include in unearned income other amounts attributed to the fair value of
equity  interests  and other  investments  received in  connection  with certain
financings.  We  amortize  the  unearned  income to  interest  income  using the
effective interest method over the life of the related loan, lease or commitment
period.

     We originate loans, portions of which may be sold to participants to manage
borrower,  industry or product concentrations.  We present these receivables net
of unearned income.  In the event we sell a portion of a loan we had originated,
any  deferred  fees or  discounts  relating to the portion  sold are  recognized
immediately  in  income.  For loan  sales that  qualify  as  participations,  we
recognize income when the participation is complete.

     We review income  recognition on an  account-by-account  basis. We evaluate
collateral regularly, primarily by assessing the related current and future cash
flow streams to estimate the value of the  equipment,  or by assessing the value
of the property  underlying the receivable.  We classify loans as nonearning and
we  suspend  all  interest  and  unearned  income  amortization  when  there  is
significant  doubt as to the ability of the debtor to meet  current  contractual
terms.   Numerous  factors  including  loan  covenant  defaults,   deteriorating
loan-to-value  relationships,  delinquencies  greater than 90 days,  the sale of
major income  generating  assets or other major  operational  or  organizational
changes may lead to income  suspension.  All  nonearning  assets are  considered
impaired.  We may restore a  nonearning  account to earning  status,  triggering
recognition of deferred  income,  if all delinquent  principal and interest have
been  paid  under  the  original  contractual  terms  or the  account  has  been
restructured and has demonstrated both the capacity to service the amended terms
of the debt and has adequate loan to value coverage.

     Direct  financing leases are recorded at the aggregate future minimum lease
payments plus estimated  residual values and deferred initial direct costs, less
unearned  income.  We recognize  income on direct  financing  leases by a method
which produces a constant periodic rate of return on the outstanding  investment
in the lease.

     Allowance for Losses--

     We have an  established  process to  evaluate,  on a quarterly  basis,  the
adequacy of the allowance for probable loan losses,  which  assesses the risk of
losses inherent in our portfolio.  This process provides an allowance consisting
of two components,  allocated and unallocated. To derive the allocated component
of the allowance,  the Company combines  estimates of the allowances  needed for
loans analyzed  individually  (including  impaired loans subject to Statement of
Financial  Accounting  Standards  (SFAS) No. 114,  Accounting  by Creditors  for
Impairment of a Loan), and loans analyzed on a pooled basis.

     The  determination  of  allocated  reserves  involves  a review of  certain
higher-risk transactions,  focusing on the accuracy of loan grading, assessments
of specific loss content and, in some cases,  strategies  for resolving  problem
credits.  The loan loss reserve  allocations arrived at through this methodology
are adjusted  based on  management's  judgement  concerning the effect of recent
economic  events  on  portfolio  performance.  In the  case of more  homogeneous
portfolios,  such as small  business  lending  and  small  ticket  leasing,  the
determination of allocated reserves is conducted at a more aggregate,  or pooled
level.  For portfolios of this nature,  the risk  assessment  process focuses on
recent delinquency and loss trends in different  portfolios to estimate inherent
losses.
                                       33
<PAGE>
     To mitigate the  imprecision  inherent in most estimates of expected credit
losses,  the  allocated  component  of  the  allowance  is  supplemented  by  an
unallocated   component.   The  unallocated   component  includes   management's
judgmental  determination of the amounts  necessary for economic  uncertainties,
related industry  performance,  historical losses and other subjective  factors;
correspondingly,  the  relationship  of the  unallocated  component to the total
allowance  for loan  losses  may  fluctuate  from  period  to  period.  Although
management has allocated a portion of the allowance to specific loan categories,
the adequacy of the allowance must be considered in its entirety.

     The allowance  for losses of  receivables  is  established  through  direct
charges  to  income.  We charge  losses to the  allowance  when we deem all or a
portion of a  receivable  to be impaired  and  uncollectible  as  determined  by
account  management  procedures.  These  procedures  include  assessing  how the
borrower is affected by economic  and market  conditions,  evaluating  operating
performance  and  reviewing  loan-to-value  relationships.  We measure  impaired
receivables  based on the present value of expected future cash flows discounted
at the receivable's  effective  interest rate, at the observable market price of
the  receivable  or at the fair value of the  collateral  if the  receivable  is
collateral  dependent.  When the  recorded  balance  of an  impaired  receivable
exceeds  the  relevant  measure  of value,  we record a  writedown  against  our
allowance for losses of receivables.

     Securitized Receivables--

     We have  securitized  and sold to  investors  certain  real  estate  loans,
commercial cash flow loans, small business loans,  factored accounts  receivable
and equipment loans and leases. In the securitization process,  originated loans
are sold to trusts. The trusts then issue asset-backed  securities to investors.
In  accordance  with SFAS No. 140,  Accounting  for  Transfers  and Servicing of
Financial  Assets and  Extinguishments  of  Liabilities - a replacement  of FASB
Statement No. 125, after a transfer of financial assets, an entity:

     o    recognizes  the  financial  and  servicing  assets it controls and the
          liabilities it has incurred;
     o    derecognizes financial assets when control has been surrendered; and
     o    derecognizes liabilities when extinguished.

     SFAS No. 140 provides standards for  distinguishing  transfers of financial
assets  that  are  sales,   from   transfers   that  are   secured   borrowings.
Securitizations of finance receivables are accounted for as sales when legal and
effective control over the related receivables is surrendered.  Servicing assets
or  liabilities  are  recognized  when the servicing  rights are retained by the
seller and when servicing fees vary from market rates.

     In  accordance  with  SFAS  No.  140,  when  we  sell  loans  in a sale  or
securitization  transaction,  the  carrying  value of loans is  allocated to the
portion  retained by Heller and the portion sold, based on relative fair values.
We recognize a gain or loss for the difference between the net proceeds received
and the allocated  carrying value of the receivables  sold. Net proceeds include
cash received plus the fair value of securities or other interests retained less
liabilities  incurred  or  estimated  expenses.  Any gain or loss from a sale or
securitization transaction is recognized currently in fees and other income.

     Securities  retained in a transaction  are recorded at their estimated fair
market value based on estimated  future cash flows,  factoring in expected  loan
loss and prepayment speeds, discounted at a market rate of interest and adjusted
for any recourse  obligations.  Assumptions used in estimating future cash flows
are based on a combination of our historical experience,  current and forecasted
trends and external  data. We classify  retained  securities as debt  securities
available for sale and periodically  review these securities for impairment.  If
we do not retain any interest in the  transaction and sell all of the securities
to third  party  investors  on a  non-recourse  basis,  our gain  equals the net
proceeds on the transaction less the carrying value of the securities sold.

     In general, we do not establish servicing assets or liabilities because, in
securitization  transactions  to date,  we have earned  servicing  fees that are
considered consistent with market rates.

                                       34
<PAGE>
     Investments in International Joint Ventures--

     Our investments in unconsolidated  joint ventures represent  investments in
companies with operations in 17 foreign  countries.  We use the equity method of
accounting for these  investments.  Under this method, we recognize our share of
the earnings or losses of the joint venture in the period in which it is earned.
We record  these  amounts  as  income of  international  joint  ventures  in our
consolidated statements of income. Dividends received from joint ventures reduce
the carrying amount of our investment.

     Lending Partnerships--

     Our  investments  in lending  partnerships  represent  interests we hold in
partnerships, which have been established for the purpose of providing financing
through operating leases, loans or direct financing leases. We account for these
investments under the equity method of accounting.

     Investments--

     Equity interests and  investments--We  carry at cost investments in certain
common  and  preferred  stocks and  certain  equity  investments,  which are not
subject to the provisions of SFAS No. 115, Accounting for Certain Investments in
Debt and Equity Securities (SFAS No. 115). We periodically  review the valuation
of all of these investments, and we write down the investment balance to reflect
declines in value determined to be other than temporary.  We record any gains or
losses  recognized upon sale or writedown of these investments as a component of
fees and other income. We account for equity investments in limited partnerships
under the equity method of accounting in accordance with  Accounting  Principles
Board Opinion No. 18, The Equity Method of Accounting for  Investments in Common
Stock,  and record income on these  investments  based on financial  information
received from fund managers.

     Equipment on Operating  Leases--We record, at cost,  aircraft and equipment
on operating  leases and depreciate it over its estimated useful lives using the
straight line method for financial  reporting  purposes and accelerated  methods
for tax purposes. The equipment and aircraft on operating leases is shown net of
accumulated  depreciation in the balance sheet. We recognize rental revenue from
our  operating  leases  ratably  over the lease  term.  Rental  revenue,  net of
depreciation, is recorded as a component of interest income.

     Residual  Values--We have investments in the residual values of our leasing
portfolios.  The  residual  values  represent  the estimate of the values of the
assets at the end of the lease  contracts.  We  initially  record these based on
appraisals and estimates. Realization of the residual values is dependent on our
future ability to market the aircraft or equipment under then prevailing  market
conditions. Management reviews residuals periodically to determine that recorded
amounts are appropriate.

     Available for Sale and Held to Maturity Securities--In accordance with SFAS
No. 115, we carry, at fair value, our available for sale  securities.  We record
any unrealized  gains or losses in other  comprehensive  income,  net of related
taxes.  We record our held to maturity  securities  at amortized  cost. We write
down to fair value available for sale and held to maturity securities to reflect
declines in value  determined to be other than temporary.  We include the amount
of any writedown in fees and other income.

     Real Estate  Investments--We  provide financing through certain real estate
loan arrangements that are recorded as acquisition, development and construction
investment transactions. We recognize income to the extent we have received cash
in excess of the investment's carrying amount.

     Repossessed Assets--Assets that we have legally acquired in satisfaction of
receivables  are carried at fair value,  less  estimated  selling  costs and are
included in other assets.  After  repossession,  we expense  operating costs and
apply cash receipts to reduce the asset balance.

     Goodwill--We record as goodwill the excess of our acquisition cost over the
fair value of the acquired entity's net assets and any identifiable intangibles.
We amortize goodwill on a straight-line  basis over the  acquisition's  expected
beneficial period not to exceed 25 years. We periodically  evaluate the carrying
value of our goodwill for impairment.
                                       35
<PAGE>
     Income Taxes--

     Federal  income taxes are accounted  for  utilizing  the liability  method.
Deferred tax assets and liabilities are determined based on differences  between
financial  reporting  and tax bases of assets and  liabilities  and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.

     Derivative Financial Instruments--

     We use  derivatives  as an integral part of  asset/liability  management to
reduce  the  overall  level of  financial  risk  arising  from  normal  business
operations. These derivatives are used to:

        o    diversify sources of funding;
        o    alter  interest rate exposure  arising from  mismatches  between
             assets and liabilities; and
        o    manage exposure to fluctuations in foreign exchange rates.

     We do not  trade  in  derivative  securities,  nor  do we  use  speculative
derivative  products to generate  earnings  from  changes in market  conditions.
Before  entering  into  a  derivative  transaction,  we  determine  that  a high
correlation  exists between the change in value of the hedged item and the value
of the  derivative.  At the  inception  of  each  transaction,  derivatives  are
designated  or matched  to  specific  assets or pools of assets or  liabilities.
After  inception  of  a  derivative,   asset/liability   managers   monitor  its
effectiveness through an ongoing review of the amounts and maturities of assets,
liabilities and derivative positions.

     Effective  January 1, 2001,  the  Company  adopted  the  provisions  of the
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments  and  Hedging  Activities,  as amended  by  Statement  of  Financial
Accounting  Standards No. 137,  Deferral of the Effective Date of FASB Statement
No. 133 and Statement of Financial  Accounting Standards No. 138, Accounting for
Derivative  Instruments and Hedging  Activities - an amendment of FASB Statement
No. 133 (collectively  referred to as SFAS No. 133). This Statement  establishes
accounting  and  reporting  standards   requiring  all  derivative   instruments
(including  certain  derivative  instruments  embedded in other contracts) to be
recorded in the balance  sheet as either an asset or  liability  measured at its
fair value.  Changes in the fair value of the  derivative  are to be  recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows gains and losses on  derivatives  to
offset related  results on the hedged items in the income  statement or in other
comprehensive income and requires that a company must document,  designate,  and
assess the effectiveness of transactions that receive hedge accounting.

     Adoption  of  this  new  accounting  standard  resulted  in  the  following
transition adjustment:

     o    cumulative  before-tax  reductions in net income of  approximately  $6
          million  (approximately  $4  million  after-tax),  or $0.04 per common
          share, recorded in the first quarter of 2001; and
     o    after-tax  reductions through other comprehensive  income, a component
          of  stockholder's  equity,  of  approximately  $1 million in the first
          quarter of 2001.

     The adjustment to net income relates  primarily to certain economic hedging
relationships  that do not qualify for hedge accounting  treatment under the new
standard as well as ineffectiveness arising from other hedging relationships.

     Heller utilizes  derivatives,  primarily interest rate swaps, to match more
closely  the  interest  rate and  maturity  characteristics  of its  assets  and
liabilities. Derivatives that qualify as fair value hedges include interest rate
swaps that change the interest rate  characteristics  of fixed rate debt to that
of  variable  rate debt and  interest  rate swaps that alter the  interest  rate
characteristics  of specific  fixed rate asset pools to more  closely  match the
interest rate terms of the  underlying  financing.  Derivatives  that qualify as
cash flow  hedges  include  interest  rate swaps that change the  interest  rate
characteristics  of variable  rate debt to that of fixed rate debt.  We also use
interest  rate swaps to modify the  variable  rate basis of a liability  to more
closely  match the variable rate basis used for variable  rate  receivables.  We
utilize interest rate futures,  as fair value hedges, to hedge the interest rate
risk of a portion of our fixed rate receivables portfolio and certain investment
securities.
                                       36
<PAGE>
     To minimize the effect of fluctuations in foreign  currency  exchange rates
on financial  results,  we  periodically  enter into forward  currency  exchange
contracts,  cross currency swap agreements, or currency options. These financial
instruments  serve  as  hedges  of  the  foreign   investment  in  international
subsidiaries  and joint  ventures or  effectively  hedge the  translation of the
related foreign currency income. Additionally, cross currency interest rate swap
agreements   were   primarily  used  to  hedge  foreign   currency   denominated
inter-company  receivables.  Through these  contracts,  we effectively  sell the
local currency and buy U.S.  dollars.  We also  periodically  enter into forward
contracts to hedge  receivables  denominated  in foreign  currencies or purchase
foreign  currencies in the spot market to settle a foreign currency  denominated
liability.

     Stock Based Compensation--

     We account for stock option and stock awards in accordance  with Accounting
Principles  Board Opinion No. 25,  Accounting for Stock Issued to Employees (APB
No. 25). In accordance  with APB No. 25, no  compensation  expense is recognized
for stock  options  or awards  issued  under our stock  incentive  plan,  as the
exercise price of the stock options equaled the market value on the grant dates.
An expense of $109 million was recorded in 2001 for the cash settlement of stock
options outstanding triggered by the GE Capital Merger. This expense is included
in Merger expenses in the  accompanying  Consolidated  Statements of Income.  In
1996,  SFAS No. 123,  Accounting for  Stock-Based  Compensation  (SFAS No. 123),
became effective. SFAS No. 123, which prescribes the recognition of compensation
expense based on the fair value of options on the grant date,  allows  companies
to  continue  applying  APB No. 25 if  certain  pro forma  disclosures  are made
assuming  hypothetical  fair value  method  application.  See Note  17--Employee
Benefits--for  pro forma  disclosures  required by SFAS No. 123 plus  additional
information on the Company's stock options.

     Restricted  stock issued is recorded as deferred  compensation at the issue
price (fair market value) on grant date and is amortized to compensation expense
on a straight-line  basis over the applicable vesting periods. An expense of $19
million was recorded in 2001 for the cash settlement of restricted  stock due to
the GE Capital  Merger.  This  expense is  included  in Merger  expenses  in the
accompanying Consolidated Statements of Income.

     Reclassifications--

     We have  reclassified  certain prior year amounts to conform to the current
year's presentation.

2.   GE Capital Merger

     On July 30, 2001, GE Capital, Hawk Acquisition Corp., a wholly owned direct
subsidiary  of GE  Capital  ("Hawk"),  and Heller  executed  a merger  agreement
pursuant  to which Hawk and GE Capital  commenced  an offer to  purchase  all of
Heller's  Class A and Class B Common Stock.  Each of the conditions of the offer
to purchase  Heller's  common  stock were  satisfied  on or prior to October 24,
2001, and Heller's  shares were purchased by Hawk. On October 25, 2001, Hawk was
merged with and into Heller, with Heller continuing as the surviving corporation
and a wholly  owned  subsidiary  of GE  Capital.  As a result of the  merger the
authorized,  issued and outstanding shares of Hawk became the authorized, issued
and  outstanding  shares  of  Heller  (1,000  shares  of  Class A  Common  Stock
authorized, and 100 shares of Class A Common Stock issued and outstanding).

     In 2001 we recognized  $304 million in pre-tax  expenses  related to the GE
Capital  Merger.  These  expenses  include  a  charge  of $109  million  for the
settlement of outstanding stock options,  $80 million in severance  benefits for
the termination of  approximately  25% of the Company's  employees,  $34 million
related to office lease  terminations,  $32 million for legal and advisory fees,
$19 million for the immediate  vesting and buy-back of restricted stock, and $30
million on information technology systems.  Liabilities related to these charges
totaled $93 million at December 31, 2001 and are included in other  payables and
accruals on the Consolidated Balance Sheet.

     The  acquisition  was accounted for by GE Capital using the purchase method
of accounting in accordance with SFAS No. 141 - Business Combinations.  Purchase
accounting adjustments were not pushed down to Heller. The merger expenses noted
above are  restructuring and other charges incurred by Heller resulting from the
change in control of the Company.
                                       37
<PAGE>
     Effective January 1, 2002,  Heller's  businesses were combined with various
GE Capital business groups.  Business originated  subsequent to January 1, 2002,
has been originated  under GE Capital's name in the GE Capital  business groups.
Future  receivables  originated  by Heller  will be  recorded  in the GE Capital
business  groups.  As  Heller's  debt  runs-off,  it will be funded  through  GE
Capital.  Various Heller business processes will be consolidated with GE Capital
during  2002,  resulting  in a reduction  in the  workforce  at Heller.  As work
previously  performed by Heller employees is absorbed by GE Capital,  GE Capital
will charge Heller an assessment for such work.

     To conform to GE Capital's  reporting  requirements,  we  reclassified  the
Company  obligated  mandatory  redeemable  preferred  securities of a subsidiary
trust (MEDS Units) from minority  interest,  as shown in previous  quarters,  to
subordinated  debt - see Note 7, Debt - and included  interest  paid on the MEDS
Units with interest expense.

3.   HealthCare Financial Partners, Inc. Acquisition

     On July 28, 1999, we acquired HealthCare  Financial  Partners,  Inc. (HCFP)
for approximately $475 million. We paid 41% of the purchase price in the form of
our Class A Common Stock and 59% in cash.  We issued  approximately  7.3 million
Class A Common  Shares  for the  transaction,  which  reduced  FAHI's  ownership
interest in Heller from 57% to 52%. In addition,  we issued  options to purchase
1.1 million  shares of our Class A Common Stock at prices ranging from $2 to $37
per share to replace stock options  previously  held by HCFP  employees for HCFP
common stock. HCFP was a rapidly growing commercial finance company  exclusively
focused on  providing  secured  financing  to small and  mid-sized  health care
providers throughout the United States.

     We accounted for the acquisition using the purchase method of accounting in
accordance   with   Accounting   Principles   Board  Opinion  No.  16,  Business
Combinations.  Goodwill from the transaction totaled  approximately $235 million
and is being amortized over 25 years. Our 1999 consolidated  statement of income
includes HCFP's operating results since the acquisition date.

4.   Commercial Services Sale

     On December 1, 1999, we sold the assets of our  Commercial  Services  unit,
part of our Domestic Commercial Finance segment,  for approximately $454 million
in cash. The sale consisted of $911 million of factored accounts  receivable and
the assumption of $577 million of liabilities due to factoring clients.

     The  premium on the  transaction  to Heller was  reduced by $41  million of
costs  incurred to exit the domestic  factoring  business.  Of this amount,  $21
million was related to severance  benefits and other related  compensation costs
incurred for  termination  of 19% of our  domestic  employees.  In addition,  we
incurred  expenses for transaction  costs,  termination of third party contracts
such as facility leases and vendor contracts, asset impairment charges, recourse
provisions  and  certain  other costs  directly  attributable  to the sale.  The
transaction  resulted in a pre-tax  gain of $79 million and an after tax gain of
$48 million.

     Upon completion of the sale, we terminated our domestic  factored  accounts
receivable sale facility.

     Of the total costs  incurred in this  transaction,  approximately  $170,000
remains as a liability of Heller as of December 31, 2001.

                                       38
<PAGE>
5.   Lending Assets

     Lending assets includes receivables and repossessed assets.

     At December 31, 2001, we had domestic  commercial  finance  receivables  of
$13.5 billion and international factoring and asset based finance receivables of
$2.6  billion.   The  international   receivables   included  factored  accounts
receivable  of $2.3 billion  relating to  Factofrance  and $300 million from our
other foreign consolidated subsidiaries.  Total receivables at December 31, 2000
consist of $13.3  billion of domestic  receivables  and $2.7  billion of foreign
receivables.

     Diversification of Credit Risk--

     Concentrations  of lending  assets of 5% or more at  December  31, 2001 and
2000, based on the standard  industrial  classification of the borrower,  are as
follows:
                                                  December 31,
                                                ---------------
                                              2001             2000
                                              ----             ----
                                        Amount  Percent   Amount  Percent
                                        ------  -------   ------  -------
                                              (dollars in millions)
     Health Services ........           $ 1,996     12%   $ 1,694     11%
     Transportation .........             1,134      7      1,145      7
     Business Services.......               732      5        897      6
     Computers ..............               751      5        549      3

     The health services  category is primarily  comprised of revolving and term
facilities with small and mid-sized health care providers. The increase in this
category  is  due  to  growth  of  Healthcare   Finance's  portfolio  since  our
acquisition of HCFP in July 1999.

     The lending  assets in the  transportation  category  primarily  arise from
chartered aircraft services and transportation  services of freight,  cargo, and
various packages.

     The business  services  category  consists of equipment  rental and leasing
companies,  building and security maintenance,  and other miscellaneous business
services.  The decrease in this  category is due to a decrease at Global  Vendor
Finance business services.

     The  computers  category  consists of  software/hardware  distributors  and
manufacturers,  component  manufacturers,  and end-users of this equipment.  The
increase in this  category is  primarily  due to the  acquisition  of a computer
leasing portfolio by Global Vendor Finance in 2001.

     Contractual Maturity of Loan Receivables--

     The following table presents the contractual  maturities of our receivables
at December 31, 2001. This  information  should not be regarded as a forecast of
cash flows (in millions):
<TABLE>
<CAPTION>
                                                                                       After
                                          2002     2003      2004     2005     2006     2006    Total
                                         -----    -----     -----    -----    -----    -----   -----
<S>                                    <C>      <C>      <C>       <C>      <C>     <C>       <C>
     Commercial loans................  $ 1,306  $  984   $ 1,009   $   757  $  760  $ 1,688   $ 6,504
     Real estate loans...............      825     978       674       317     242      313     3,349
     Factored accounts receivable....    2,483      19         8         2       1        1     2,514
     Equipment loans and leases......    1,138     811       602       381     299      470     3,701
                                       -------  ------   -------   -------  ------  -------   -------
          Total......................  $ 5,752  $2,792   $ 2,293   $ 1,457  $1,302  $ 2,472   $16,068
                                       =======  ======   =======   =======  ======  =======   =======
</TABLE>

                                       39
<PAGE>
     Commercial   loans   consist   principally   of  senior  loans  secured  by
receivables,  inventory or property, plant and equipment.  Real estate loans are
principally collateralized by first mortgages on commercial and residential real
estate.  Factored accounts receivable are purchased from clients, and we provide
credit and collection  services in return for a commission.  Equipment loans and
leases are secured by the underlying equipment, and we may have at least partial
recourse to the  equipment  vendor in certain  programs.  Of the loans  maturing
after  2002,  $3.1  billion  have fixed  interest  rates and $7.2  billion  have
floating interest rates.

     Direct Financing Leases--

     The components of the net investment in direct financing  leases,  included
as part of Equipment Loans and Leases on our consolidated  balance sheet, are as
follows:
                                                            December 31,
                                                           -------------
                                                            2001     2000
                                                         -------   -------
                                                       (dollars in millions)
         Total minimum lease payments...............    $  1,723   $ 1,556
         Estimated residual values..................         320       310
         Deferred initial direct costs..............          15        18
         Unearned income............................        (307)     (288)
                                                        ---------- -------
         Net investment in direct financing leases..    $  1,751   $ 1,596
                                                        ========   =======

     At December 31, 2001,  the future  minimum lease payments to be received on
direct financing leases for the five succeeding  fiscal years and thereafter are
(in millions):

       Year Ending December 31:
         2002 ......................................  $   699
         2003 ......................................      449
         2004 ......................................      291
         2005 ......................................      134
         2006 ......................................       62
         Thereafter.................................       88
                                                      -------
              Total  minimum lease payments ........  $ 1,723
                                                      =======

     Impaired    Receivables,    Repossessed    Assets,    and   Troubled   Debt
Restructurings--

     We do not  recognize  interest  and fee income on impaired  receivables  or
repossessed assets, both of which are classified as nonearning,  as set forth in
the following table:
                                                            December 31,
                                                           -------------
                                                          2001      2000
                                                         -----     ------
                                                      (dollars in millions)
     Impaired receivables.............................   $ 408     $ 285
     Repossessed assets...............................      23        22
                                                         -----     ------
          Total nonearning assets.....................   $ 431     $ 307
                                                         =====     ======
     Ratio of total nonearning assets to
        total lending assets. ........................    2.7%      1.9%

     Nonearning  assets  included  $30 million and $37 million in 2001 and 2000,
respectively, for our International Factoring and Asset Based Finance Segment.

     The average investment in nonearning impaired receivables was $333 million,
$246  million and $214 million for the years ended  December 31, 2001,  2000 and
1999, respectively.

     We did not have any loans that are considered  troubled debt restructurings
at December 31, 2001 or 2000.  Troubled  debt  restructurings  are earning loans
restructured at below market terms.
                                       40
<PAGE>
     The following table indicates the effect on income if interest on
nonearning impaired receivables and troubled debt restructurings, outstanding at
year-end, had been recognized at original contractual rates during the year:
<TABLE>
<CAPTION>
                                                           For the Year       For the Year
                                                              Ended              Ended
                                                           December 31,       December 31,
                                                           ------------      --------------
                                                          2001  2000  1999  2001  2000  1999
                                                          ----  ----  ----  ----  ----  ----
                                                             Domestic          Foreign
                                                                    (in millions)
<S>                                                       <C>   <C>   <C>    <C>  <C>    <C>
         Interest income which would have been
              recorded.................................   $29   $25   $ 12   $18  $19    $20
         Interest income recorded......................     1     1      2    --   --     --
                                                          ----  ----  ----  ----  ----  ----
         Effect on interest income.....................   $28   $24    $10  $18   $19    $20
                                                          ====  ====  ====  ====  ====   ===
</TABLE>
     Loan Modifications--

     At December  31, 2001 and 2000 there was $11 million and $0,  respectively,
of impaired loans that were restructured and returned to earning status.

     Allowance for Losses of Receivables--

     The changes in the  allowance  for losses of  receivables  and  repossessed
assets were as follows:
                                                        For the Year Ended
                                                            December 31,
                                                       2001     2000    1999
                                                       ----     ----    ----
                                                           (in millions)
     Balance at the beginning of the year........      $ 342    $ 316   $ 271
          Provision for losses...................        297      148     136
          Writedowns.............................       (225)    (140)   (116)
          Recoveries.............................         31       25      18
          HCFP acquisition.......................         --      --        7
          Sale of HCS assets.....................         --      --       (2)
          Other..................................         (3)      (7)      2
                                                       ------   ------  -----
     Balance at the end of the year..............      $ 442    $ 342   $ 316
                                                       =====-   =====-  =====

     There were no material  changes in estimation  methods and  assumptions for
the allowances that took place during 2001. The Company  considers the allowance
for loan losses of $442 million  adequate to cover  losses  inherent in our loan
portfolio as of December 31, 2001.  Because the allowance is based on judgements
and  estimates,  it is reasonably  possible that those  judgements and estimates
could  change in the  future  causing  a  corresponding  change in the  recorded
allowance.

     Impaired receivables with identified reserve requirements were $371 million
and $260 million at December 31, 2001 and 2000, respectively.
<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                                    ------------
                                                                                    2001      2000
                                                                                   ------    ------
                                                                                (dollars in millions)
<S>                                                                                <C>       <C>
         Identified reserve requirements for impaired receivables.............     $ 149     $  78
         Additional allowance for losses of receivables.......................       293       264
                                                                                   -----      -----
              Total allowance for losses of receivables.......................     $ 442     $ 342
                                                                                   ======     =====
         Ratio of total allowance for losses of receivables to nonearning
              impaired receivables............................................      108%      120%
</TABLE>
                                       41
<PAGE>
6.   Investments and Other Assets

   Equity and Real Estate Investments--

     The  following  table sets forth a summary of the major  components  of our
equity and real estate investments (in millions):
                                                              December 31,
                                                              -----------
                                                            2001      2000
                                                           ------    ------
    Equity interests and investments...................    $  372    $  402
    Real estate investments............................       340       321
    Available for sale equity securities...............        24        72
                                                           ------    ------
         Total equity and real estate investments......    $  736    $  795
                                                           ======    ======

     Equity  interests  and  investments   principally   include  common  stock,
preferred stock, warrants and limited partnership investments.

     Real estate  investments  are  acquisition,  development  and  construction
investment  transactions.  At December  31,  2001,  we held  investments  in 159
projects with balances ranging up to approximately $12 million.

     The  available  for sale equity  securities  are  principally  comprised of
shares of publicly  traded common stock.  Net unrealized  holding gains on these
securities  were $9 million  and $49  million  at  December  31,  2001 and 2000,
respectively,  and are  recorded in other  comprehensive  income on a net of tax
basis.

   Debt Securities--

     The  Company's  debt  securities  are  comprised of available for sale debt
securities and include purchased investments in debt securities and $435 million
of securities retained in connection with our loan sales or securitizations.  Of
the $435 million of securities  retained,  $428 million was  repurchased at fair
market  value  by the  Company  and  recorded  as  commercial  loans  receivable
concurrent  with the  termination of the conduit in January 2002. Net unrealized
holding losses on total  available for sale debt securities were $64 million and
$34  million at  December  31, 2001 and 2000,  respectively.  These  amounts are
recorded in other comprehensive income, on a net of tax basis.

     Operating Leases--

         Equipment on lease includes the following (in millions):

                                                        December 31,
                                                       -------------
                                                       2001      2000
                                                     -------   -------
         Aircraft and related equipment...........   $  403    $  384
         Telecommunications equipment ............      134       113
         Computer related equipment ..............       70        84
         Other ...................................      190       259
         Less:  accumulated depreciation..........     (206)     (145)
                                                     -------   -------
              Equipment on lease..................   $  591    $  695
                                                     =======   =======

     Non-cancelable  future  minimum  rental  receipts  under the leases are $89
million,  $65 million, $45 million, $29 million and $14 million for 2002 through
2006.  Substantially  all aircraft and related  equipment were under lease as of
December 31, 2001.
                                       42
<PAGE>
   Investments in International Joint Ventures--

     The following  table sets forth a summary of the  financial  results of our
international  joint ventures on a combined  basis.  This  information  does not
reflect Heller's pro-rata share of these investments:

                                                 December 31,
                                                -------------
                                                2001       2000
                                                ----      -----
                                             (dollars in millions)

         Factoring volume....................  $ 23,981  $ 21,187
         Total receivables...................     4,412     4,312
         Net income..........................        69        65

     The following table shows our investment in international joint ventures by
geographic region:
                                                    December 31,
                                                   -------------
                                                   2001      2000
                                                   -----    -----
                                                (dollars in millions)
         Europe...............................    $   200    $  188
         Latin America........................         10        11
         Asia/Pacific.........................         18        17
                                                  -------    ------
              Total...........................    $   228    $  216
                                                  =======    ======

     We  own  interests  of 40% to 50% in  these  joint  ventures.  Our  largest
investment in  international  joint  ventures is NMB-Heller  Holding N.V.  which
accounts for 69% of our total  investments  in  international  joint ventures at
December 31, 2001.  NMB-Heller Holding N.V. operates finance companies primarily
located in the  Netherlands,  Germany and the United Kingdom.  Our investment in
NMB-Heller  Holding  N.V.  totaled $155 million and $148 million at December 31,
2001 and 2000,  respectively.  NMB-Heller  Holding N.V. had total receivables of
$3.5  billion and $3.4  billion as of December 31, 2001 and 2000 and revenues of
$240 million and $227 million for the years then ended.

     During 2000, we sold our  investment  in our joint venture in Belgium.  Our
investment  in this entity  totaled  nearly $12  million.  A pre-tax gain of $17
million from the sale was recorded as part of fees and other income.

    Lending partnerships--

     Our  investments  in  lending   partnerships  are  primarily  comprised  of
investments  of our Leasing  Services  unit and  primarily  include  partnership
interests within the aircraft  industry and affordable  housing.  As of December
31, 2001, we held interests in 42 lending partnerships versus 36 at December 31,
2000.

   Goodwill--

     The  following  table  presents  goodwill  balances,  net of  amortization,
relating to our acquisitions:
                                                        December 31,
                                                       -------------
                                                      2001      2000
                                                    ------   -------
                                                 (dollars in millions)
         HCFP                                      $   213   $   222
         Dealer Products Group..................       166       174
         Factofrance............................        51        56
         Other..................................         6         6
                                                   -------   -------
              Total goodwill....................   $   436   $   458
                                                   =======   =======

     Amortization  for each year ended  December  31, 2001 and 2000  totaled $20
million and for the year ended December 31, 1999 totaled $15 million.

                                       43
<PAGE>
  Other Assets--

     The following  table sets forth a summary of the major  components of other
assets:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                           -------------
                                                                           2001      2000
                                                                           -----    -----
                                                                           (in millions)
<S>           <C>                                                         <C>       <C>
         Other Assets:
              Deferred  income tax  benefits,  net of allowance of $11
                and  $5 at December 31, 2001 and 2000, respectively...    $  346    $  211
              Prepaid expenses and other assets........................      142       225
              Furniture, fixtures and equipment........................       32        57
              Repossessed assets.......................................       23        22
              Non-compete agreement....................................        1         4
                                                                          ------   -------
                  Total other assets...................................   $  544   $   519
                                                                          ======   =======
</TABLE>
7.  Debt

     Commercial paper and short-term  borrowings--Prior to the GE Capital Merger
we used commercial  paper to finance a portion of our domestic  operations.  Our
consolidated   international   subsidiaries   used  short-term   borrowings  and
commercial  paper to  finance  international  operations.  Subsequent  to the GE
Capital Merger the majority of our commercial  paper  borrowings were terminated
and financed through inter-company notes with GE Capital - see Note 19 - Related
Parties.  Total  commercial  paper  borrowings  represent  2% of  total  debt at
December 31, 2001. Combined commercial paper and short-term borrowings represent
7% of total debt at December 31, 2001.

     The  following  table   summarizes  our  commercial  paper  and  short-term
borrowings as of December 31, 2001 and 2000:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                           --------------
                                                                           2001      2000
                                                                          -------  -------
                                                                           (in millions)
<S>                                                                       <C>      <C>
         Domestic commercial paper...................................     $    --  $  3,485
         International commercial paper..............................         215       652
         Factofrance short-term borrowings...........................         499       833
         Other consolidated subsidiaries short-term borrowings.......          59       141
                                                                          -------  --------
              Commercial paper and short-term borrowings.............     $   773  $  5,111
                                                                          =======  ========
</TABLE>
     The table below sets forth information  concerning our domestic  commercial
paper borrowings. The average interest rates and average borrowings are computed
based on the average daily balances during the year.
<TABLE>
<CAPTION>
                                                                           2001      2000     1999
                                                                           ----      ----     ----
                                                                            (dollars in millions)
<S>                                                                         <C>      <C>      <C>
         Commercial Paper--domestic:
              Average interest rate
                  During the year......................................     4.48%    6.45%    5.32%
                  During the year, including the effect of
                      commitment fees..................................     4.80     6.63     5.47
                  At year-end..........................................       --     7.09     6.13

                  Average borrowings...................................   $2,518  $ 3,699  $ 3,346

                  Maximum month-end borrowings.........................    3,718    3,959    4,194
                  End of period borrowings.............................       --    3,485    3,523

</TABLE>
                                       44
<PAGE>
     Our International commercial paper includes Factofrance commercial paper at
December  31,  2001 and 2000 and also  includes  issuances  under  our  Canadian
commercial  paper  program at December 31, 2000.  Factofrance  commercial  paper
issued  at  December  31,  2001 had an  average  interest  rate of 3.59% and its
short-term  borrowings  at  December  31, 2001 had an average  interest  rate of
3.84%.  Factofrance uses primarily  short-term debt and commercial paper to fund
its assets, which are short-term in nature. We used Canadian commercial paper to
fund our Canadian assets during 2000.

     Available credit and asset sale  facilities--At  December 31, 2001, we have
total committed credit and asset sale facilities of $2.2 billion,  of which $1.2
billion was available for use at December 31, 2001.

     Included  in  committed  facilities  are  foreign  bank  credit  facilities
totaling   $445  million  (U.S.   dollar   equivalent)   for  our   consolidated
international  subsidiaries  and $25 million  under foreign  currency  revolving
credit facilities. As of December 31, 2001, there was approximately $450 million
available under these facilities.  Included in foreign bank credit facilities is
approximately  $129  million  of  additional  alternative  liquidity.   This  is
available by discounting  eligible  French  receivables  with the French Central
Bank since Factofrance,  our wholly-owned subsidiary,  is a registered financial
institution in France.  At December 31, 2001, all of this facility was available
for use.

     At  December  31,  2001 we had an asset  backed  commercial  paper  conduit
facility  that  allowed  us to  sell  participations  in a  designated  pool  of
Corporate  Finance  cash-flow  loans to  bank-sponsored  conduits  on a  limited
recourse  basis.  The underlying  liquidity  support is provided by unaffiliated
commercial banks. Liquidity support under this facility totaled $1.2 billion, of
which $550  million  was  utilized at  December  31,  2001.  This  facility  was
terminated on January 18, 2002.

     We have a 364-day  facility,  expiring May 1, 2002, which allows us to sell
up to $500 million of our equipment  receivables to two bank-sponsored  conduits
on a limited recourse basis. As of December 31, 2001 we had  approximately  $122
million available under this facility.

     Notes and  debentures--The  scheduled  maturities  of debt  outstanding  at
December 31, 2001, other than commercial paper and short-term borrowings,  gross
of the  unamortized  discount of $8 million,  and  excluding  the mark to market
adjustment due to hedge accounting treatment of $275 million, are as follows:
<TABLE>
<CAPTION>
                                                      Scheduled Maturities at December 31,
                                                                                         After
                                        2002      2003      2004      2005      2006      2006    Total
                                        ----      ----      ----      ----      ----      ----    -----
                                                             (dollars in millions)
<S>                                    <C>      <C>       <C>        <C>      <C>       <C>      <C>
     Various fixed rate notes and
        debentures.................... $ 1,865  $ 2,037   $   898    $1,027   $   900   $   649  $  7,376
     Fixed weighted average rate......    6.77%    6.94%     6.27%     7.39%     6.37%     7.36%     6.84%
     Various floating rate notes
        and debentures................ $ 1,816  $ 1,068   $   105        --   $    25        --  $  3,014
     Floating weighted average rate...    2.27%    2.81%     3.06%       --      2.45%       --      2.49%
     Total notes and debentures....... $ 3,681  $ 3,105   $ 1,003    $1,027   $   925    $  649  $ 10,390
</TABLE>

     Our various fixed and floating rate notes and debentures are denominated in
U.S. dollars, Euros, French francs,  Singapore dollars, British pounds, Japanese
yen, Canadian dollars, and Australian dollars. In order to fix the exchange rate
of foreign currency to U.S. dollars on the foreign currency denominated debt, we
have entered into cross  currency  interest  rate swap  agreements.  In order to
convert  certain fixed rate debt to floating rate debt and  vice-versa,  we have
entered into  interest rate swap  agreements.  During 2001 the majority of these
swaps were terminated or assigned to GE Capital.

     The following table provides the year-end weighted average interest rate of
the U.S. dollar and foreign denominated debt (gross of the unamortized  discount
of $8 million in 2001 and 2000 and excluding the mark to market  adjustment  due
to hedge  accounting  treatment  of $275  million in 2001)  before and after the
effect of the swap agreements at December 31, 2001 and 2000.

                                       45
<PAGE>
<TABLE>
<CAPTION>
                                                        Weighted Average Interest Rate
                                                        ------------------------------
                                                 Before    After              Before    After
                                                 Effect   Effect   Variable   Effect   Effect
                                     Fixed Debt    of       of       Debt       of       of    Total Debt
                                     Outstanding  Swap     Swap   Outstanding  Swap     Swap   Outstanding
                                      ---------   -----   ------  ----------   -----   ------- -----------
                                                             (dollars in millions)
<S>                                    <C>        <C>       <C>      <C>        <C>      <C>     <C>
     2001:
        United States dollar.......    $ 6,787    6.98%     6.98%    $2,574     2.49%    2.49%   $  9,361
        Euros......................        271    5.75      2.36         99     3.67     3.45         370
        French franc...............          3    5.25      5.25         55     3.94     3.94          58
        Singapore dollar...........         86    3.12      2.46         --     --        --           86
        Japanese yen...............         --      --       --         173     0.38     2.50         173
        British pound..............         --      --       --          29     4.30     4.30          29
            Canadian dollar........         99    5.58      5.58         32     2.44     2.44         131
            Australian dollar......        130    5.50      2.74         52     4.98     2.74         182
                                       -------    ----      ----     ------     ----     ----    --------
           Total...................    $ 7,376    6.84%     6.66%    $3,014     2.49%    2.57%   $ 10,390
                                       =======    ====      ====     ======     ====     ====    ========
     2000:
        United States dollar.......    $ 5,933    7.03%     6.97%    $4,107     7.00%    6.97%   $ 10,040
        Euros                              283    5.75      7.08        118     5.26     5.35         401
        French franc...............          9    5.25      5.25         58     5.60     5.60          67
        Singapore dollar...........         74    3.31      6.14         --     --       --            74
        Czech koruna...............         21    6.00      7.01         33     5.53     6.99          54
        British pound..............         --      --       --          29     6.39     6.39          29
                                       -------      --       --      ------     ----     ----    --------
           Total...................    $ 6,320    6.92%     6.96%    $4,345     6.92%    6.90%   $ 10,665
                                       =======    ====      ====     ======     ====     ====    ========
</TABLE>
     The contractual  interest rates for the U.S. dollar  denominated fixed rate
debt range between 4.10% and 8.00% at December 31, 2001. The  contractual  rates
on the U.S. dollar denominated floating rate debt are based primarily on indices
such as the Federal  Funds rate plus 0.45% to 0.77% and the  three-month  London
Inter-Bank Offered Rate (LIBOR) plus 0.04% to 0.75%.

     Subordinated Debt-- In May 2001, HFI Trust I (the "Trust"),  a wholly owned
subsidiary  of the Company,  issued 7 million  units of 7% mandatory  redeemable
preferred securities (the "MEDS units") at $25 per unit. Each MEDS unit consists
of a trust  preferred  security and a forward  purchase  contact under which the
holder is  required  to  purchase a variable  number of shares in the  Company's
Class A Common  Stock  for a fixed  purchase  price  at the end of a  three-year
period,  absent specified  circumstances that may entitle the holder to exercise
that right at an earlier time (such as the GE Capital Merger). During the fourth
quarter of 2001,  each holder of a MEDS unit was given the opportunity to settle
the  forward  purchase  contract  component  of the MEDS unit during a specified
period (the Early Option Period)  pursuant to a change in control  provisions in
the documents underlying the MEDS units, resulting in a $69 million reduction to
the  Company's  additional  paid in  capital.  As a result of the  Early  Option
Period,  (a)  holders of  6,994,920  MEDS units  opted to settle  their  forward
purchase  contracts and remain as holders of the trust preferred  securities and
(b)  holders of 5,080 MEDS units did not opt to settle and remain  holding  MEDS
units.  The sole  assets of the Trust are  subordinated  deferrable  notes  (the
"Notes")  issued by Heller.  These  Notes will  mature on May 2, 2006 and have a
liquidation value of $25. The obligations with respect to the Trust constitute a
full and unconditional  guarantee by the Company. The trust preferred securities
of the MEDS units are classified in the Company's  balance sheet as subordinated
debt at their face and redemption  amount of $175 million.  Distributions on the
Notes of 7% per year, or $1.75 per unit,  are paid quarterly and are included in
interest  expense on the Consolidated  Statements of Income.  For the year ended
December  31,  2001,  the Company  distributed  $8.2 million on the Notes to the
holders of MEDS units.  The Company has  exercised  its right to  liquidate  the
Trust,  cancel the trust  preferred  securities  and distribute the Notes to the
holders of the MEDS units and the trust  preferred  securities  pursuant  to the
Declaration of Trust. A certificate of  Cancellation of Trust was filed with the
Secretary of State of Delaware  effective  as of March 29,  2002.  The MEDS were
delisted from the New York Stock Exchange on May 9, 2002.

                                       46
<PAGE>
8.   Derivative Financial Instruments and Financial Instruments with Off-Balance
     Sheet Risk

     We are party to  several  types of  agreements  involving  derivatives  and
financial instruments with off-balance sheet risk. These instruments are used to
meet the financing needs of borrowers and to manage our own exposure to interest
rate and currency  exchange rate  fluctuations.  These  instruments  principally
include interest rate swap  agreements,  forward  currency  exchange  contracts,
options,  futures  contracts,  interest rate cap agreements,  loan  commitments,
letters of credit and guarantees.

     Derivative financial instruments used for risk management  purposes--We use
derivatives  as an integral  part of  asset/liability  management  to reduce our
overall level of financial risk. These derivatives,  particularly  interest rate
swap agreements, are used to:

o    diversify sources of funding;
o    alter  interest rate exposure  arising from  mismatches  between assets and
     liabilities; and
o    manage exposure to fluctuations in foreign exchange rates.

     Our derivative instruments are entirely related to accomplishing these risk
management objectives,  which arise from normal business operations.  We are not
an interest  rate swap dealer nor are we a trader in derivative  securities.  We
have not used speculative  derivative products to generate earnings from changes
in market conditions.

     Subsequent  to the GE Capital  Merger,  the risk  management  function  was
transitioned  to GE Capital's  central  treasury  department.  As a result,  the
majority  of our hedge  positions  were  either  terminated  or  assigned  to GE
Capital.

     The credit risk associated with these instruments is limited to:

o    amounts earned but not collected; and

o    any additional amounts we may incur to replace the instrument under current
     market conditions.

     These amounts will increase or decrease  during the life of the instruments
as interest rates and foreign  exchange rates  fluctuate.  The amounts of credit
risk are substantially  less than the notional amounts of these  agreements.  We
manage this risk by establishing  minimum credit ratings for each counter-party.
We also limit the exposure to  individual  counter-parties  based upon the total
notional amount and the current replacement cost of existing agreements. We have
not experienced  nonperformance by any  counter-party  related to our derivative
financial instruments.

     To minimize the effect of fluctuations in foreign  currency  exchange rates
on financial  results,  we  periodically  enter into forward  currency  exchange
contracts,  cross currency swap agreements, or currency options. These financial
instruments  serve  as  hedges  of  the  foreign   investment  in  international
subsidiaries  and joint  ventures or  effectively  hedge the  translation of the
related foreign currency income. Additionally, cross currency interest rate swap
agreements   were   primarily  used  to  hedge  foreign   currency   denominated
inter-company  receivables.  Through these  contracts,  we effectively  sell the
local currency and buy U.S.  dollars.  We also  periodically  enter into forward
contracts to hedge  receivables  denominated  in foreign  currencies or purchase
foreign  currencies in the spot market to settle a foreign currency  denominated
liability.

     During the twelve  months ended  December  31,  2001,  we entered into $5.9
billion in notional  amount of interest rate swaps.  These  instruments  had the
effect of converting  $3.5 billion of fixed rate debt to a variable  rate,  $2.1
billion of variable  rate debt to another  variable  rate index,  $34 million of
variable  rate debt to a fixed rate and $304  million of fixed rate  assets to a
variable rate. During the same period,  $11.5 billion of our interest rate swaps
were assigned to GE, terminated or matured.

                                       47
<PAGE>
     The following  table  summarizes the  contractual  notional  amounts of our
derivative financial instruments as of December 31, 2001 and 2000.
<TABLE>
<CAPTION>
                                                                           Contractual or
                                                                          Notional Amount
                                                                          -----------------
                                                                           2001       2000
                                                                          ------     ------
                                                                           (in millions)
<S>                                                                       <C>       <C>
         Interest rate swap agreements................................    $    3    $ 4,699
         Basis swap agreements........................................       979      2,161
         Forward currency exchange contracts..........................       267      1,007
         Cross currency interest rate swap agreements.................       693        633
         Interest rate futures contracts..............................       --         334
         Purchased options............................................       --         127
         Interest rate cap agreements.................................        9          30
</TABLE>

     During 2001 we  terminated  or  assigned to GE Capital the  majority of our
derivatives. As a result, the designated hedge relationships were terminated and
the mark to market on the hedged  items were  amortized  to other  income.  This
amortization  totaled  approximately $20 million for the year ended December 31,
2001.

     At December 31, 2001, $3 million of our  derivatives are fair value hedges,
$693  million  are hedges of foreign  currency  exposure of net  investments  in
foreign  operations,  and $1,255  million  does not meet the  criteria for hedge
accounting under SFAS No. 133.

     For the year ended December 31, 2001, the combined  effect of a net gain of
approximately $1 million from fair value hedges and other derivative activity is
classified as Other Income on the  Consolidated  Statements of Income.  Also for
the year ended  December 31, 2001,  unrealized  losses on  qualifying  cash flow
hedges  of $2  million  net of  taxes  of $1  million  is  recognized  in  Other
Comprehensive Income in the Consolidated  Statements of Changes in Stockholder's
Equity.  The income statement impact of cash flow hedges was not significant for
the year ended December 31, 2001.

     For  forward  contracts  that  qualify  as hedges of the  foreign  currency
exposure  of net  investments  in foreign  operations,  a loss of $19 million is
included in the  cumulative  translation  adjustment for the year ended December
31, 2001.  This is  partially  offset by  increases  in  investments  in foreign
operations.

     Commitments,  letters of credit  and  guarantees--We  generally  enter into
various  commitments,  letters  of credit  and  guarantees  in  response  to our
customers'  financing needs.  Since we expect many of these agreements to expire
unused,  the total commitment amount does not necessarily  represent future cash
requirements.  The credit risk involved in issuing these  instruments is similar
to extending loans to borrowers.  Our credit quality and collateral policies for
controlling  this risk are  similar  to those  involved  in our  normal  lending
transactions.  Our  contractual  amount of  commitments,  letters  of credit and
guarantees are shown below:
                                                             Contract Amount
                                                             ---------------
                                                              2001      2000
                                                            -------   -------
                                                              (in millions)
         Loan commitments...............................   $  2,887  $  2,997
         Letters of credit and financial guarantees.....        655       512
         Investment commitments.........................        117       150

     Commitments  to fund  new  and  existing  borrowers  generally  have  fixed
expiration dates and termination clauses and typically require payment of a fee.
We issue letters of credit and financial  guarantees as conditional  commitments
to  guarantee  the  performance  of a borrower or an affiliate to a third party.
Losses  related  to these  services  historically  have  not  been  significant.
Investment  commitments  are  comprised  of Real Estate  Finance  and  Corporate
Finance commitments to fund a variety of investment types.

                                       48
<PAGE>
9.  Legal Proceedings

     We are party to a number of legal  proceedings  as plaintiff and defendant,
all  arising in the  ordinary  course of our  business.  Although  the  ultimate
outcome of these proceedings is not ascertainable,  we believe that the amounts,
if any, which may ultimately be funded or paid will not have a material  adverse
effect on our financial condition or results of operations.

10.  Rental Commitments

     Our minimum rental  commitments under  non-cancelable  operating leases and
other service agreements at December 31, 2001 are as follows (in millions):

         2002.........................................................$ 24
         2003.........................................................  21
         2004.........................................................  20
         2005.........................................................  19
         2006.........................................................   5
         Thereafter...................................................  29
                                                                      ----
         Total........................................................$118
                                                                      ====

     Total rent expense,  net of rental income from subleases,  was $31 million,
$30 million,  and $37 million for the years ended  December  31, 2001,  2000 and
1999, respectively.

11.   Preferred Stock

     The following table summarizes our non-redeemable preferred stock:
<TABLE>
<CAPTION>
                                                                          As of December 31,
                                                                            2001      2000
                                                                            (in millions)
<S>                                                                        <C>       <C>
         Cumulative Perpetual Senior Preferred Stock, Series A......       $    --   $   125
         Noncumulative Perpetual Senior Preferred Stock, Series C...           150       150
         Noncumulative Perpetual Senior Preferred Stock, Series D...           125       125
                                                                          --------  --------
                          Total Preferred Stock ....................       $   275   $   400
                                                                           =======   =======
</TABLE>
     Cumulative  Perpetual  Senior  Preferred  Stock,  Series A ($.01 Par Value;
stated value, $25; 8.125%; 5,000,000 shares authorized and outstanding)-- On May
15,  2001 we  redeemed  all of the  5,000,000  outstanding  shares of our 8-1/8%
Cumulative  Perpetual Senior Preferred Stock, Series A. The shares were redeemed
at the redemption  price of $25.00 per share,  plus accrued and unpaid dividends
to the date of redemption, payable to holders of record thereof on May 1, 2001.

     Noncumulative  Perpetual Senior Preferred Stock,  Series C ($.01 Par Value;
stated value, $100;  6.687%;  1,500,000 shares authorized and outstanding)-- Our
Series C Preferred Stock is not redeemable prior to August 15, 2007. On or after
this date, we can redeem, in whole or in part, the Series C Preferred Stock at a
redemption price of $100 per share, plus any accrued and unpaid dividends.

     Noncumulative  Perpetual Senior Preferred Stock,  Series D ($.01 Par Value;
stated value,  $100; 6.95%;  1,250,000 shares  authorized and  outstanding)--Our
Series D Preferred  Stock is not  redeemable  prior to February 15, 2009.  On or
after this date,  we can  redeem,  in whole or in part,  the Series D  Preferred
Stock at a  redemption  price of $100 per  share,  plus any  accrued  and unpaid
dividends.

                                       49
<PAGE>
     Redeemable  Preferred  Stock--We  have  authorized  the issuance of 100,000
shares of a series of preferred stock designated NW Preferred Stock, Class B (No
Par Value) (NW Preferred Stock).  This stock was authorized pursuant to the Keep
Well  Agreement  between  us and Fuji  Bank.  Effective  with the  Heller  Share
Acquisition, Fuji Bank assigned all rights and  obligations  under the Keep Well
Agreement  to  GE  Capital,   and  GE  Capital  accepted  all  such  rights  and
obligations.  The Keep Well Agreement (including all amendments to the Keep Well
Agreement)  has, among other things,  an agreement for GE Capital to purchase NW
Preferred  Stock in an amount required to maintain our  stockholder's  equity at
$500  million.  As of  December  31,  2001,  our  stockholder's  equity was $2.3
billion. If and when issued, we will pay quarterly dividends on the NW Preferred
Stock at a rate per annum equal to 1% over the three-month  LIBOR rate.  Subject
to certain  conditions,  the holder can redeem the NW  Preferred  Stock within a
specified time period after a calendar  quarter end. The redemption  amount must
not  exceed  the  amount of our  stockholder's  equity  over $500  million.  The
redemption  price  will  equal the price  paid for the  stock  plus  accumulated
dividends.  No purchases  of NW Preferred  Stock have been made by GE Capital or
Fuji Bank under the Keep Well Agreement.

12.   Dividend Restrictions and Payments

     Under the  provisions  of the  Delaware  General  Corporation  Law,  we may
legally  pay  dividends  only out of our  surplus or out of our net  profits for
either the current or  preceding  fiscal  year,  or both.  In  addition,  we are
prohibited from paying dividends on common stock unless all current dividends on
the  Series C and  Series  D  Preferred  Stock  have  been  paid.  Also,  we are
prohibited from paying  dividends on any other preferred stock that ranks,  with
respect to the payment of dividends,  equal or junior to the Series C and Series
D Preferred  Stock,  unless all current and full  cumulative  dividends on these
preferred stocks have been paid.

     The following table summarizes the dividends declared and paid dividends on
our shares of Preferred Stock during 2001 and 2000:
<TABLE>
<CAPTION>
                                                                          As of December 31,
                                                                         -------------------
                                                                            2001      2000
                                                                          --------   ------
                                                                            (in millions)
<S>                                                                        <C>       <C>
         Cumulative Perpetual Senior Preferred Stock, Series A......       $     5   $    10
         Noncumulative Perpetual Senior Preferred Stock, Series C...            10        10
         Noncumulative Perpetual Senior Preferred Stock, Series D...             9         9
                                                                          --------  --------
                          Total Preferred Stock ....................      $     24  $     29
                                                                          ========  ========
</TABLE>
     We paid Common  Stock  dividends of $29 million and $39 million in 2001 and
2000, ratably to our Class A and Class B shareholders.

13.   Treasury Stock

     We have an  executive  deferred  compensation  plan (the  Plan)  into which
certain employees could elect to defer a portion of their annual compensation on
a pre-tax basis. The amount deferred remains an asset of Heller and was invested
in several mutual funds and, prior to the Heller Share Acquisition, in our Class
A Common Stock.  During 2001, prior to the Heller Share Acquisition,  $4 million
of Class A Common Stock was repurchased to meet the obligations of the executive
deferred  compensation  plan.  Effective  with the Heller Share  Acquisition  on
October 24, 2001, all of the  investments  of the Plan in the Company's  Class A
Common Stock were liquidated for $53.75 per share and the funds were re-invested
in the mutual funds of the Plan. This reduced treasury stock by $10 million.  At
December  31,  2001  and 2000 we held 0 and  235,562  shares,  respectively,  of
treasury stock through the Plan. See Note 17--Employee Benefits-- for additional
information relating to the Plan.

     During 2001, prior to the Heller Share  Acquisition,  $4 million of Class A
Common Stock was also  repurchased  to meet the  obligations  of Heller's  stock
incentive  compensation plans. As a result of the GE Capital Merger,  during the
fourth quarter of 2001 the stock  incentive  compensation  plans were terminated
and all vested stock  options  were  settled for cash.  At December 31, 2001 and
2000 we held 0 and 661,941 shares, respectively, of our Class A Common Stock for
use in meeting the requirements of our stock incentive compensation plans.

     There were no shares of treasury stock held as of December 31, 2001.

                                       50
<PAGE>
14.   Fees and Other Income

     The  following  table  summarizes  our fees and other  income for the years
ended December 31, 2001, 2000 and 1999:
                                                              Year Ended
                                                             December 31,
                                                        2001     2000     1999
                                                        ----     ----     ----
                                                             (in millions)
         Investment and asset sale income...........  $  148    $ 201    $ 175
         Fee income and other.......................     129       97      111
                                                       ------   ------   ------
               Total................................  $  277    $ 298    $ 286
                                                      =======   ======   ======

     Investment  and asset sale  income  consists  of gains on  securitizations,
syndications and loan sales, net investment income and gains, equipment residual
gains and  participation  income.  Investment and asset sale income in 2000 also
includes  a net  gain  from  the sale of one  international  investment  and the
liquidation of another.  Investment and asset sale income is somewhat  dependent
on the  equity,  real estate and capital  markets  and is  therefore  subject to
volatility.

     Fee income and other includes servicing income, late fees, prepayment fees,
early termination fees, residual rental income and other miscellaneous fees.

15.   Operating Expenses

     The  following  table  sets  forth a  summary  of the major  components  of
operating expenses:
<TABLE>
<CAPTION>
                                                                                Year Ended
                                                                               December 31,
                                                                          2001     2000     1999
                                                                          ----     ----     ----
                                                                               (in millions)
<S>                                                                       <C>      <C>      <C>
         Salaries and other compensation..............................    $  234   $  236   $  237
         Legal and professional fees..................................        33       41       45
         Business acquisition costs...................................        33       26       23
         Space costs..................................................        31       30       37
         Equipment costs..............................................        29       33       25
         Goodwill and non-compete agreement amortization..............        24       24       19
         Travel and entertainment costs...............................        19       21       19
         Other........................................................        53       48       51
                                                                          ------   ------   ------
              Total...................................................    $  456   $  459   $  456
                                                                          ======   ======   ======
</TABLE>

16.   Small Business Finance Charge

     In the first quarter of 2001 we decided to discontinue  the  origination of
SBA loans through our Small  Business  Finance  unit.  In  connection  with this
decision,  we incurred a one time pre-tax  charge of  approximately  $12 million
(approximately $8 million after-tax).  This charge primarily relates to employee
severance benefits and facility-related costs.

     Of the total  costs  incurred  related to this  transaction,  approximately
$400,000 remains a liability as of December 31, 2001.

17.   Employee Benefits

     We  had   various   incentive   compensation   plans  and  a  savings   and
profit-sharing  plan during 2001 which  provided  for annual  contributions  for
eligible employees based on our achievement of certain financial  objectives and
employee achievement of certain objectives.

                                       51
<PAGE>
     Pension and Post Retirement  Plans -- We  have a  noncontributory  defined
benefit  pension  plan  (Retirement  Plan)  covering  substantially  all  of our
domestic employees and a supplemental  executive retirement plan (SERP) in which
certain  employees  participate.  Our policy is to fund,  at a minimum,  pension
contributions  as required by the  Employee  Retirement  Income  Security Act of
1974.  Benefits  under the  Retirement  Plan and SERP are based on an employee's
years of service and average earnings for the five highest  consecutive years of
compensation occurring during the last ten years before retirement.

     We also provide  health care  benefits for eligible  retired  employees and
their eligible dependents through the  Post-retirement  Health Care Plan (Health
Care Plan).

     The following  table  summarizes the change in the benefit  obligations for
the Retirement  Plan and Health Care Plan at the end of the respective  year and
identifies the assumptions used to determine the benefit obligation:
<TABLE>
<CAPTION>
                                                                                      Post-Retirement
                                                             Retirement Plan         Health Care Plan
                                                               Year Ended               Year Ended
                                                              December 31,             December 31,
                                                              ------------             ------------
                                                          2001     2000    1999    2001    2000     1999
                                                          ------  -------  ------ -------  ------  -------
                                                                      (dollars in millions)
         Change in benefit obligation
<S>                                                       <C>     <C>      <C>    <C>      <C>     <C>
          Benefit obligation at January 1...............  $  50   $   50   $  52  $   10   $  10   $   10
             Service Cost...............................      3        3       4    --       --      --
             Interest Cost..............................      4        3       4       1       1        1
             Plan Amendments............................      1      --      --      --      --       --
             Acquisitions/Divestitures..................    --       --       (1)    --      --       --
             Actuarial loss(gain).......................      8       (5)     (7)      1     --       --
             Benefits paid..............................     (1)      (1)     (2)     (1)     (1)      (1)
                                                          ------  -------  ------ -------  ------  -------
               Benefit obligation at December 31........  $  65   $   50   $  50  $   11   $  10   $   10
                                                          ======  =======  ====== =======  ======  =======
             Change in plan assets
          Fair value of plan assets at January 1........  $  53   $   56   $  50  $  --    $  --   $   --
             Actual return on plan assets...............     (4)      (2)      8       1       1       --
             Benefits paid..............................     (1)      (1)     (2)     (1)     (1)      --
                                                          ------  -------  ------ -------  ------  -------
          Fair value of plan assets at December 31......  $  48   $   53   $  56  $   --   $  --   $   --
                                                          ======  =======  ====== =======  ======  =======
        Reconciliation of funded status
          Funded status.................................  $ (13)  $    3   $   6  $  (11)  $ (10)  $  (10)
          Unrecognized prior service cost...............     --       (1)     (1)     (1)     (1)      --
          Unrecognized actuarial (gain) loss............      2      (11)    (14)      1       1        1
          Unrecognized transition obligation............     --       --      --       4       4        4
                                                          ------  -------  ------ -------  ------  -------
             Net amount recognized in the statement
               of financial position at December 31.....  $ (11)  $   (9)  $  (9) $   (7)  $  (6)  $   (5)
                                                          ======  =======  ====== =======  ======  =======
        Weighted-average assumptions as of
          December 31:
          Discount rate.................................  7.00%    7.75%   7.50%   7.00%    7.75%   7.50%
          Expected return on assets.....................  9.00     9.00    9.00     N/A      N/A     N/A
          Rate of salary increases......................  5.00     5.00    5.00     N/A      N/A     N/A
</TABLE>
                                       52
<PAGE>
     Components of net pension cost for the Retirement  Plan and the Health Care
Plan for the following periods are:
<TABLE>
<CAPTION>
                                                             Retirement Plan          Post-Retirement
                                                               Year Ended          Healthcare Plan Year
                                                              December 31,          Ended December 31,
                                                              ------------          ------------------
                                                           2001     2000    1999    2001    2000     1999
                                                          ------  -------  ------ -------  ------  -------
                                                                          (in millions)
<S>                                                       <C>     <C>      <C>    <C>     <C>      <C>
         Service cost..................................   $  3    $    3   $   4  $   --  $   --   $   --
         Interest cost.................................      4         3       4       1       1        1
         Expected return on plan assets................     (5)       (5)     (5)     --      --       --
         Recognized actuarial (gain) or loss...........     --        (1)     --      --      --       --
                                                          ------  -------  ------ -------  ------  -------
               Net periodic benefit cost...............   $  2    $   --   $   3  $    1  $    1   $    1
                                                          ======  =======  ====== =======  ======  =======
</TABLE>

     The following  table  summarizes the change in the benefit  obligations for
SERP Plan at the end of the respective year and identifies the assumptions  used
to determine the benefit obligation:
<TABLE>
<CAPTION>
                                                             Supplemental Executive
                                                                Retirement Plan
                                                                   Year Ended
                                                                  December 31,
                                                                ----------------
                                                            2001     2000      1999
                                                            ----     ----      ----
                                                                 (in millions)
<S>                                                      <C>        <C>       <C>
        Benefit obligation
          Benefit obligation at January 1..............  $     3    $   3     $   3
                                                         =======    ======    ======
          Benefit obligation at December 31 ...........  $     3    $   3     $   3
                                                         =======    ======    ======
        Plan assets
          Fair value of plan assets at January 1.......  $   --     $  --     $  --
                                                         =======    ======    ======
          Fair value of plan assets at December 31.....  $   --     $  --     $  --
                                                         =======    ======    ======
        Reconciliation of funded status
          Funded status................................  $   (3)    $  (3)    $  (3)
          Unrecognized prior service cost..............       1         2         2
          Unrecognized actuarial gain..................      (4)       (4)       (4)
                                                         -------    ------    ------
          Net amount recognized in the statement
                of financial position at December 31...  $   (6)    $  (5)    $  (5)
                                                         =======    ======    ======
</TABLE>

     The weighted average assumptions as of December 31, 2001, 2000 and 1999 for
the SERP were  consistent  with the discount  rate and rate of salary  increases
applied to the Retirement Plan.

     The net pension cost for the  Supplemental  Executive  Retirement  Plan was
less than $1 million for the years ended December 31, 2001, 2000 and 1999.

     In  2001  there  was  a  reduction   in  plan   participants   due  to  the
discontinuance of the Small Business Finance Group. This reduction resulted in a
decrease in the 2001  pension  expense by less than $1 million.  The  additional
employees  resulting  from  the  HCFP  acquisition  in July  1999 did not have a
significant  impact on our pension  expense since the date of  acquisition.  The
reduction of plan participants resulting from the sale of assets of our HCS unit
in December  1999,  had no impact on 1999  pension  expense and  decreased  2000
pension expense by approximately $1 million.

     We adjust the discount and salary rates,  as well as the expected  rates of
return  on  assets,  for the  Retirement  Plan  and the SERP to  reflect  market
conditions at the measurement date. Changes in these assumptions will impact the
amount of pension expense in future years.  The decrease in the discount rate at
December  31, 2001 will not have a material  impact on the  pension  expense for
2002.  The modest  increase in the discount rate at December 31, 2000  increased
expense  by  approximately  $1  million  in 2001 as  compared  to 2000.  We have
maintained our salary rate assumption at 5% for both the Retirement Plan and the
SERP.
                                       53
<PAGE>
     We also adjust the discount,  salary,  and health care cost trend rates for
the Health  Care Plan to reflect  market  conditions  at the  measurement  date.
Changes in these  assumptions  will impact the amount of the benefit  expense in
future  years.  The decrease in the discount  rate at December 31, 2001 will not
have a material  impact on the  benefit  expense for 2002.  The  increase in the
discount  rate at December 31, 2000 had an  insignificant  impact on the benefit
expense for 2001.

     The accumulated post retirement benefit obligation,  under the terms of the
Health  Care  Plan,  as  amended,   was  calculated  using  relevant   actuarial
assumptions  and health care cost trend rates projected at annual rates starting
in 2002 with 10.0% pre-65 and 12.0%  post-65 and trending  down over seven years
to 5.5% and 6.0%,  respectively.  The effect of a 1.0% annual  increase in those
assumed cost trend rates would increase the accumulated post retirement  benefit
obligation by approximately  $1 million,  while annual service and interest cost
components in the aggregate  would not be materially  affected.  The effect of a
1.0% annual  decrease in these  assumed  cost trend  rates  would  decrease  the
accumulated  post retirement  benefit  obligation by  approximately  $1 million,
while annual service and interest cost  components in the aggregate would not be
materially affected.

     Savings  and Profit  Sharing  Plan - We have a Savings  and Profit  Sharing
qualified  401(K) Plan whereby  eligible  employees can make  voluntary  pre-tax
contributions  to the  401(K)  Plan up to 18% of their base  salary,  subject to
certain IRS limits.  Heller  provides a $0.50  match on every  dollar  employees
defer,  up to the first 6% of  employees'  base  salary.  The  Company  may also
provide profit sharing contributions for certain employees,  based upon Heller's
achievement of its financial objectives for the year.  Contributions are held in
a trust of the 401(K) Plan. Prior to the GE Capital Merger, all Company matching
contributions and profit sharing contributions were in the form of Heller stock.
Upon the GE Capital Merger,  Heller stock held by the 401(K) Plan was liquidated
and  re-invested  in a  mutual  fund  of the  401(K)  Plan.  Subsequent  Company
contributions  are made to the  401(K)  Plan in cash.  Prior to January 1, 2002,
employees  vested in the 401(K)  Plan at 20% per year with 100%  vesting at five
years of  service.  As a result of the GE Capital  Merger,  the 401(K)  Plan was
amended to provide  active  employees  immediate  vesting of benefits  effective
January 1, 2002. Our  contributions to the 401(K) Plan for 2001 and 2000 were $2
million and $3 million, respectively.

     Deferred   Restoration  Plan  -  Effective   January  1,  2001  we  have  a
nonqualified  Deferred Restoration Plan (DRP) for certain employees.  The DRP is
an  extension  of  the  401(K)  plan  and  allows  certain   employees  to  make
contributions  and receive  benefits -  including  a Company  match - that would
otherwise  not be allowed  with the  401(K)  Plan  because  of IRS  limitations.
Company  contributions to the DRP remain an asset of Heller.  Contributions made
to the DRP during 2001 were insignificant.

     Executive Deferred  Compensation  Plan--Our Executive Deferred Compensation
Plan (the Plan) is a nonqualified  deferred  compensation  plan in which certain
employees may elect to defer a portion of their annual compensation on a pre-tax
basis.  The amount deferred  remains an asset of Heller and may be invested,  at
the participant's  discretion,  into certain mutual funds and our Class A Common
Stock.  Effective with the GE Capital  Merger,  investment in our Class A Common
Stock is no longer an option. During the fourth quarter of 2001,  investments in
our Class A Common  Stock held by the Plan were  liquidated,  and the funds from
the  liquidation  were  re-invested in the mutual funds of the Plan.  Payment of
amounts  deferred is made in a lump sum or in annual  installments  over a five,
ten or fifteen year period as determined by the participant.

     Investments  in our Class A Common  Stock under this plan were  reported as
treasury  stock on our balance  sheet.  At December 31, 2001 and 2000, we held 0
and 235,562  shares,  respectively,  of treasury  stock  through the Plan.  Plan
assets,  other than  treasury  stock,  totaled  $70  million  and $45 million at
December 31, 2001 and 2000, respectively.

                                       54
<PAGE>
     Earnings or losses on plan assets,  other than treasury stock, are included
as part of fees and other  income.  In 2001, we recorded a gain of $5 million on
plan assets. We recorded a loss on plan assets, other than treasury stock, of $3
million during 2000, and income of $8 million during 1999.  Compensation expense
of these same amounts was also recorded in each of these years.

     Long Term  Incentive  Plans--We  have  long-term  incentive  plans in which
participants  receive  performance  units that are granted at the  beginning  of
either a two or three-year  performance  period. The value of a performance unit
is based on our  three-year  average  earnings  per share  and  return on common
equity.  The  total  expense  related  to  the  long-term  incentive  plans  was
approximately $4 million in 2001 and $1 million in 2000 and 1999. Effective with
the GE Capital  Merger,  the Long Term Incentive  Plans were  terminated and all
accrued amounts were paid to participants in cash.

     1998 Stock  Incentive  Plan--We  adopted a stock-based  incentive plan, The
Heller  Financial,  Inc.  1998 Stock  Incentive  Plan  (Stock  Incentive  Plan),
covering non-employee directors and employees (collectively, Participants).

     The  Stock   Incentive  Plan  provided  for  the  grant  of  incentive  and
non-qualified  stock  options,  restricted  stock,  stock  appreciation  rights,
performance  shares and performance units (Awards).  The terms of the Awards are
set forth in award agreements (Award Agreements).  The Compensation Committee of
the  Heller  Board  of  Directors,  in its  sole  discretion,  determined  which
employees  received  Awards as well as the type,  size and terms and  conditions
applicable  to any  Award.  Effective  with  the GE  Capital  Merger  the  Stock
Incentive Plan was terminated.

     Restricted  Stock--During  2001,  2000 and 1999,  242,784  shares,  128,947
shares and 197,604  shares,  respectively,  of restricted  stock were granted as
part of  compensation  awards.  All  restricted  shares  were issued at the fair
market value on the date of grant. Shares awarded during 2001, 2000 and 1999 had
various vesting periods.

     Effective  with the GE Capital  Merger,  all restricted  stock  outstanding
immediately  vested and was settled for cash at the GE Capital purchase price of
$53.75 per share. During the fourth quarter of 2001,  additional paid in capital
was reduced by $14 million, reflecting the settlement of the restricted stock at
its original measurement price.  Deferred compensation related to the restricted
stock, a contra-equity  account,  was eliminated to reflect the  acceleration of
the vesting period,  resulting in a $6 million expense. An additional expense of
$13 million was incurred reflecting the excess of the settlement price of $53.75
per share over the original  measurement  price of the restricted  stock.  These
expenses were incurred during the fourth quarter of 2001 and are classified with
the Merger expenses in the enclosed Consolidated Statements of Income.

     Compensation  expense  related to the  restricted  stock totaled $6 million
during 2001 and 2000 and $5 million during 1999.

     Accounting for  Stock-Based  Compensation  Plans--We  account for the stock
options in accordance with Accounting  Principles  Board Opinion No. 25 (APB No.
25),  Accounting  for Stock  Issued to  Employees.  Under APB No.  25, we do not
recognize  compensation  expense on the  issuance of our stock  options,  as the
option  terms are fixed and the  exercise  price  equals the market price of the
underlying  stock on the grant date. In 2001,  with the GE Capital  Merger,  all
unvested  stock  options  immediately  vested  and  all  options  were  settled.
Compensation  expense of $109  million  relating to the stock  options was fully
recognized in the fourth quarter 2001 and is classified  with Merger expenses in
the  enclosed  Consolidated  Statements  of Income.  The Company  realized a tax
benefit of $43 million on this transaction.

     Over 1.8 million options were granted prior to the Heller Share Acquisition
as part of compensation  awards.  Of the 2.3 million options granted in 1999, as
presented  in the table  below,  approximately  1.1 million  related to the HCFP
acquisition  and were 100% vested on the grant date.  The options were issued at
prices ranging from $2 to $37 per share to replace stock options previously held
by HCFP employees for HCFP common stock.

                                       55
<PAGE>
     A summary of the  status  and  activity  of stock  options  under the Stock
Incentive  Plan as of December 31, 2001,  2000 and 1999,  and changes during the
years ending on those dates is presented below:
<TABLE>
<CAPTION>
                                                   2001                     2000                   1999
                                            ----------------------------------------------------------------------
                                                          Weighted-              Weighted-               Weighted-
                                                          Average                Average                 Average
                                                          Exercise               Exercise                Exercise
                                             Shares       Price      Shares      Price       Shares      Price
                                            --------     ---------  ---------   ---------- ------------  ----------
<S>                                         <C>          <C>        <C>         <C>         <C>        <C>
   Outstanding at beginning of year..       3,895,623    $ 24.82    3,150,795   $  26.27    1,291,952  $ 26.85
   Granted   ........................       1,800,988      34.56    1,248,243      19.78    2,293,824    25.29
   Exercised ........................      (1,214,185)     25.03     (189,508)     17.89     (136,863)   11.81
   Forfeited ........................         (68,110)     28.12     (313,907)     23.52     (298,118)   27.84

   GE Capital merger.................      (4,414,316)     28.69           --         --           --       --
                                           -----------              ------------           -------------
   Outstanding at end of year........             --       24.82    3,895,623      26.27    3,150,795
                                           ===========              ============           =============
   Weighted-average fair value of
     options granted during the year              --                 $  11.00                $  13.45
</TABLE>

     If we were to implement Statement of Financial Accounting Standard No. 123,
Accounting for Stock Based  Compensation  (SFAS No. 123) for 2000 and prior, our
net  income  applicable  to common  stock for 2000 and 1999 would have been $255
million and $243  million,  respectively.  Our diluted  earnings per share would
have been $2.63 and $2.61 for 2000 and 1999, respectively.  The weighted average
fair value of each  option  granted  during 2000 and 1999 was $11.00 and $13.45,
respectively.  The  annual  cost of the stock  options  was  determined  using a
Black-Scholes option-pricing model that assumed the following:

     o    a ten-year option life for 2000 and 1999;
     o    a risk-free interest rate of 6.53% for 2000 and 4.76% for 1999;
     o    a dividend yield of 2.04% for 2000 and 1.26% for 1999; and
     o    volatility  of 53.13% for 2000  based on the  volatility  of  Heller's
          stock price and 36.51% for 1999 based on industry peers' volatility.

     With the  settlement  of stock options in 2001,  the expense  recognized in
2001 is not materially different under APB No. 25 versus SFAS No. 123.

     Employee  Stock Purchase  Plan--We  adopted an Employee Stock Purchase Plan
(the ESPP) which offered  employees the  opportunity  to purchase Class A Common
Stock at a discount through payroll  deductions.  During 2001, 2000 and 1999, we
incurred  expenses related to the ESPP of approximately  $213,000,  $271,000 and
$408,000,  respectively.  The ESPP was  terminated as a result of the GE Capital
Merger.

                                       56
<PAGE>
18.   Income Taxes

     The provision for income taxes is summarized in the following table:

                                        2001     2000     1999
                                        ----     ----     ----
                                             (in millions)
         Current:
              Federal...               $ (25)    $   25   $   81
              State..................     (1)         5       11
              Foreign................     31         32       22
                                       -----     ------   ------
                  Total current......      5         62      114
                                       -----     ------   ------
         Deferred:
              Federal................    (38)        82       37
              State..................     (4)         5        3
              Foreign................    (11)       (10)      --
                                       ------    -------  ------
                  Total deferred.....    (53)        77       40
                                       ------    ------   ------
                                       $ (48)    $  139   $  154
                                      =======    ======   ======

     Heller filed its final  consolidated U.S. Federal income tax return for the
period  ended  October 24,  2001.  Beginning  with the period  October 25, 2001,
Heller  will be  included in the  consolidated  US Federal  income tax return of
General Electric Company.  The provision for income taxes takes into account the
effect of the change in consolidated income tax reporting.

     We record future tax benefits for  deductible  temporary  differences if we
believe that it is more likely or not we will realize these  benefits.  Included
in income tax expense are amounts relating to International Group.

     We made United States  Federal  income tax payments of $59 million in 2001,
$68 million in 2000 and $67 million in 1999.

     The  reconciliation  between the statutory Federal income tax provision and
the actual effective tax provision for each of the three years ended December 31
is as follows:
<TABLE>
<CAPTION>
                                                                          2001     2000     1999
                                                                          ----     ----     ----
                                                                               (in millions)
<S>                                                                       <C>      <C>      <C>
      Tax provision at statutory rate..................................   $  (18)  $  151   $  154
      State and foreign income taxes,
          net of Federal income tax effects ...........................       15       31       32
      Income of foreign subsidiaries and joint ventures and
          foreign tax credit utilization...............................      (29)     (28)     (29)
      Business related and other tax credits...........................      (19)     (15)      (8)
      Other, net.......................................................        3       --        5
                                                                          -------  -------  ------
                                                                          $  (48)  $  139   $  154
                                                                          =======  =======  ======
</TABLE>
                                       57
<PAGE>
     The  significant  components  of the  deferred  tax assets and deferred tax
liabilities at December 31, 2001 and 2000 are shown below:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                           2001      2000
                                                                           (in millions)
<S>                                                                       <C>       <C>
        Deferred Tax Assets:
             Allowance for losses of receivables.......................   $  193    $  144
             Lease portfolio acquisitions..............................       99        89
             Net operating losses......................................       68        57
             Accrued expenses..........................................       77        42
             Foreign tax credits.......................................       11         5
             Equity interests and other investments....................        9         3
                                                                          -------   -------
        Gross deferred tax assets......................................      457       340
        Valuation allowance............................................      (11)       (5)
                                                                          -------   -------
        Gross deferred tax assets, net of valuation allowance..........      446       335
        Deferred Tax Liabilities:
             Fixed assets and deferred income from lease financing          (122)     (103)
             Repossessed properties....................................      (14)      (14)
             Unrealized appreciation of securities available for sale..       36        (7)
                                                                          -------   -------
        Gross deferred tax liabilities.................................     (100)     (124)
                                                                          -------   -------
        Net deferred tax asset.........................................   $  346    $  211
                                                                          =======   =======
</TABLE>
     We have not made a provision for United States or additional  foreign taxes
on $335 million of  undistributed  earnings of  subsidiaries  outside the United
States since we intend to reinvest those  earnings.  These earnings would become
taxable upon the sale or liquidation of these  international  operations or upon
the remittance of dividends.  Given the  availability of foreign tax credits and
various  tax  planning  strategies,  we  believe  any tax  liability  which  may
ultimately  be paid on these  earnings  would be  substantially  less  than that
computed at the statutory  federal  income tax rate.  Upon  remittance,  certain
foreign countries impose  withholding taxes that are then available,  subject to
certain limitations, for use as credits against our United States tax liability.
The  amount of  withholding  tax that would be payable  upon  remittance  of the
entire amount of undistributed earnings is approximately $22 million.

     We had unused foreign tax credit  carryforwards  of $11 million at December
31, 2001 and $5 million at December 31, 2000. Due to substantial restrictions on
the utilization of foreign tax credits imposed by the Tax Reform Act of 1986, we
may  not be able  to  utilize  a  significant  portion  of  foreign  tax  credit
carryforwards prior to expiration.  Accordingly,  we have recognized a valuation
allowance  for the amount of foreign tax credits  recorded at December  31, 2001
and 2000.

     We have  recorded a net  deferred  tax asset of $346 million as of December
31, 2001. Although realization is not assured, we believe it is more likely than
not that the deferred  tax assets will be  realized.  The amount of the deferred
tax assets  considered  realizable,  however,  could be reduced if  estimates of
future taxable income are reduced.
                                       58
<PAGE>
19.   Related Parties

     Prior to the GE Capital Merger we had several financial,  administrative or
other service arrangements with Fuji Bank or related affiliates.  As a result of
the GE Capital  Merger we entered  into various  agreements  with GE Capital and
terminated our  arrangements  with Fuji Bank. We believe that the terms of these
arrangements  were  similar to those we would have  obtained in like  agreements
with unaffiliated entities in arms-length transactions.

     Keep Well Agreement with GE Capital. The Keep Well Agreement was originally
entered into in 1983 between us and Fuji Bank.  Effective  with the Heller Share
Acquisition,  Fuji Bank assigned all rights and obligations  under the Keep Well
Agreement  to  GE  Capital,   and  GE  Capital  accepted  all  such  rights  and
obligations.  The Keep  Well  Agreement  provides  that if  Heller  should  lack
sufficient cash or credit  facilities to meet our commercial paper  obligations,
GE  Capital  will lend us up to $500  million.  That loan  would be  payable  on
demand.  We could  only use the  proceeds  from the loan to meet our  commercial
paper obligations.

     The Keep Well Agreement  further provides that GE Capital will maintain our
stockholder's equity at $500 million.  Accordingly, if at the close of any month
our stockholder's equity is less than $500 million, GE Capital will purchase, or
cause one of its  subsidiaries to purchase,  shares of our NW Preferred Stock in
an amount necessary to increase our stockholder's equity to $500 million.

     We paid  commitment fees to GE Capital and/or Fuji Bank under the Keep Well
Agreement of less than $1 million in 2001, 2000 and 1999.  Interest on any loans
will be charged at the prime rate of Morgan  Guaranty  Trust Company of New York
plus 0.25% per annum. No loans or purchases of NW Preferred Stock have been made
by GE Capital or Fuji Bank under this agreement.

     Neither GE Capital nor Heller can terminate  the Keep Well  Agreement on or
prior to December 31, 2002. After December 31, 2002, the Keep Well Agreement can
only be  terminated  if we have  received  written  certifications  from Moody's
Investor  Service,   Inc.  and  Standard  and  Poor's   Corporation  that,  upon
termination, our Series C Preferred Stock will be rated no lower than "baa1" and
"BBB" respectively.  Similarly,  after December 31, 2002, the agreement may only
be  terminated  if our senior debt  ratings  were  unchanged  as a result of the
termination  of the  Agreement.  After  December 31, 2007,  the agreement may be
terminated by either party with 30 business days written notice.

     Services  Provided by Fuji Bank for Heller.  Certain employees of Fuji Bank
performed  managerial,  administrative  and other  related  functions for Heller
during  2001,  2000  and  1999.  We  compensated  Fuji  Bank for the use of such
individuals'  services at a rate that reflects current costs. The amount paid to
Fuji Bank for these services was  approximately $1 million during 2001, 2000 and
1999.  Additionally,  certain  subsidiaries  of Fuji Bank acted as registrar and
paying agent for certain debt issuances by Heller.  These services were provided
at market rates.

     Fuji  Bank  and  one  of  its  subsidiaries  occasionally  also  served  as
co-managers for various offerings of Heller debt securities. These services were
provided  at  market  rates and paid  directly  to the lead  underwriter  on the
offering.

     Services  Provided  by Heller for Fuji Bank and  Affiliates.  We  performed
services for our  affiliates,  including  FAHI, and charged them for the cost of
the work  performed.  The amount  received from FAHI was less than $1 million in
during 2001, 2000 and 1999. Additionally, we guaranteed payment under a deferred
compensation  arrangement  between  FAHI and certain of its  employees  who were
providing  services  to Heller.  In certain  instances  we also  guaranteed  the
obligations  of our  clients or the  clients of certain  joint  ventures,  under
letters of credit issued by financial  institutions,  some of which are Heller's
affiliates.

     Intercompany Receivables, Payables, Transactions and Financial Instruments.
At December 31, 2001 we had $4.3 billion of notes payable to GE Capital.  During
2001 we expensed $12.8 million in interest to GE Capital on these notes.

                                       59
<PAGE>
     At December 31, 2000,  inter-company notes payable included net amounts due
to and due from affiliates of $3 million.  These amounts mainly include interest
bearing demand notes representing  amounts due to and from Heller,  arising from
advances,  administrative  fees and costs charged to other  subsidiaries of FAHI
and amounts  payable to FAHI for services  provided.  The notes bear interest at
rates that  approximate  the average rates our commercial  paper  obligations or
short-term bank borrowing rates  outstanding  during the period.  During 2000 we
paid  interest  of  $210,000 to FAHI  related to these  notes.  These notes were
paid-off during 2001.

     Fuji Bank and one of its subsidiaries provided committed lines of credit to
our consolidated international subsidiaries totaling $43 million at December 31,
2000.  Fuji  Bank  also  provided  uncommitted  lines of credit of less than $15
million at December 31, 2000.  In addition,  Fuji Bank  provided  committed  and
uncommitted  lines of credit  to  certain  international  joint  ventures  as of
December 31, 2000.  There were no committed or uncommitted  lines of credit from
Fuji Bank as of December 31, 2001.

     During  2000,  we  originated  a mezzanine  loan of  approximately  Yen 1.5
billion  (or  $15  million)  and  made  a   participation,   in  an  arms-length
transaction,  to Fuji Bank for 50% of the loan balance. As of December 31, 2001,
the outstanding  balance of this loan is approximately $1 million, of which $0.5
million relates to the Fuji participated portion.

20.   Fair Value Disclosures

     Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial  Instruments,  requires  disclosure of fair value information
for certain financial instruments,  for which it is practicable to estimate that
value.  Since  there is no  well-established  market  for many of our assets and
financial  instruments,  fair values are estimated using present value, property
yield,  historical  rate  of  return  and  other  valuation  techniques.   These
techniques are  significantly  affected by the assumptions  used,  including the
discount  rate and  estimates  of  future  cash  flows.  These  assumptions  are
inherently judgmental and changes in such assumptions could significantly affect
fair  value   calculations.   The  derived  fair  value  estimates  may  not  be
substantiated  by comparison to  independent  markets and may not be realized in
immediate liquidation of the instrument.

     Our carrying values and estimated fair values of our financial  instruments
at December 31, 2001 and 2000, are as follows:
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                        --------------------
                                                                       2001                2000
                                                                       ----                ----
                                                                         Estimated           Estimated
                                                                Carrying    Fair    Carrying    Fair
                                                                  Value    Value     Value     Value
                                                                --------  --------  --------  --------
                                                                             (in millions)

<S>                                                              <C>      <C>       <C>        <C>
         Total receivables...................................    $ 16,068 $ 15,366  $ 15,966   $15,832
         Total investments...................................       1,853    1,754     1,817     1,867
         Debt................................................      11,605   11,748    15,768    15,936
         Swap agreements:
              Asset..........................................           5        5        --        71
              Liability......................................         (28)     (28)       --       (26)
         Forward currency exchange contracts.................          11       11        (4)       (4)
         Interest rate futures contracts.....................          --       --       (11)      (11)
              Options........................................          --       --        (2)       (2)
</TABLE>

     We used the following  methods and  assumptions  to estimate the fair value
disclosures for financial  instruments.  Carrying values approximate fair values
for all financial instruments which are not specifically addressed.

     Receivables were pooled by loan type and risk rating. We estimated the fair
value for these  receivables  by employing  discounted  cash flow analyses using
interest  rates equal to the London  Inter-Bank  Offered  Rate or the Prime rate
offered as of December 31, 2001 and 2000 plus an adjustment  for normal  spread,
credit quality and the remaining terms of the loans.

     Carrying  and fair values of the  securities  available  for sale are based
predominantly  on quoted market prices.  We use our business  valuation model to
determine the estimated  value of our equity and other  investments  as of their
anticipated  exercise date. The business valuation model analyzes the cash flows
of the related company and considers values for similar equity investments.  The
determined  value is then discounted back to December 31, 2001 and 2000 using an
appropriate rate of return for equity investments.

                                       60
<PAGE>
     We estimated the fair value of our notes and  debentures  using  discounted
cash flow analyses.  These analyses are based on current  incremental  borrowing
rates for arrangements with similar terms and remaining maturities, as quoted by
independent financial institutions as of December 31, 2001 and 2000. Fair values
were assumed to equal carrying values for commercial  paper and other short-term
borrowings.

     The estimated fair value of interest rate swap agreements was derived using
discounted cash flow analyses in addition to using quoted market prices obtained
from  independent  financial  institutions.  Forwards,  futures  contracts,  and
options  outstanding  at December  31, 2001 are carried at fair value.  The fair
values of loan commitments, letters of credit and guarantees are negligible.

21.   Operating Segments

     SFAS No.  131,  Disclosures  about  Segments of an  Enterprise  and Related
Information,  requires us to report  segment  information  based upon the way we
organize  segments  within  the  Company  for  making  operating  decisions  and
assessing performance.

<PAGE>
     Our two reportable segments,  Domestic Commercial Finance and International
Factoring  and Asset Based  Finance,  are  identified  based upon our  strategic
business  units whose  long-term  financial  performance  is affected by similar
economic  conditions.  Each segment was managed separately by its own President.
Effective  January 1, 2002,  Heller  business groups were merged into various GE
Capital business groups.  The following is a summary of Heller's business groups
through December 31, 2001:

     Domestic Commercial Finance--This segment consists of five business units:

(i)  Heller Corporate Finance (Corporate Finance): providing collateralized cash
     flow and asset based lending;

(ii) Heller Real Estate  Financial  Services  (Real Estate  Finance):  providing
     primarily secured real estate financing;

(iii)Heller  Leasing  Services  (Leasing  Services):  providing  debt and  lease
     financing of small and large ticket equipment and commercial aircraft;

(iv) Heller  Healthcare  Finance  (Healthcare  Finance):  providing asset based,
     collateralized   cash  flow  and  secured  real  estate  financing  to  the
     healthcare industry; and

(v)  Heller Small Business Finance (Small Business Finance): providing financing
     to small  businesses,  primarily  under U.S. Small Business  Administration
     (SBA) loan programs.  In 2001 we discontinued  the origination of SBA loans
     through Small  Business  Finance but continue to fund existing  commitments
     and  continue  to  service  the  existing  portfolio.  See  Note 16 - Small
     Business Finance Charge - for more details.

     The Domestic  Commercial  Finance  segment also  includes  receivables  for
domestic business activities that we are no longer pursuing.

     International  Factoring and Asset Based Finance--This segment,  managed by
International  Group,  provides  various  types of financing  through 5 majority
owned  subsidiaries and 8 joint ventures.  These subsidiaries and joint ventures
operate in 17 countries in Europe,  Asia/Pacific and Latin America. The types of
financing provided include:

        o    factoring and receivables management services;
        o    asset based financing;
        o    acquisition financing; and
        o    leasing and vendor finance and/or trade finance programs.

     We evaluate the performance of our operating  segments based on net income.
Inter-segment sales and transfers are not significant.  The reportable segments'
accounting  policies are consistent  with ours, as described in Note 1-- Summary
of Significant Accounting Policies.
                                       61
<PAGE>
     Summarized  financial  information  concerning our  reportable  segments is
shown in the following table.
<TABLE>
<CAPTION>

                                                                  International
                                                        Domestic  Factoring and
                                                       Commercial Asset Based    Consolidated
                                                        Finance     Finance        Company
                                                       ---------- -------------- ------------
                                                                  (in millions)
         Total assets:
<S>           <C>                                       <C>           <C>          <C>
              2001...................................   $ 16,674      $ 3,144      $  19,818
              2000...................................     16,792        3,269         20,061
              1999...................................     14,510        3,463         17,973
         Revenues:
              2001...................................      1,586          284          1,870
              2000...................................      1,729          308          2,037
              1999...................................      1,372          265          1,637
         Income (loss) of international joint ventures:
              2001...................................         (2)          38             36
              2000...................................         (1)          39             38
              1999...................................          1           34             35
         Net interest income:
              2001...................................        584           54            638
              2000...................................        575           54            629
              1999...................................        474           38            512
         Net (loss) income:
              2001...................................        (56)          49             (7)
              2000...................................        224           66            290
              1999...................................        236           48            284
</TABLE>

     Net income of Domestic Commercial Finance for 2001 includes a net after-tax
charge of $8 million for the  discontinuation of the origination of SBA loans, a
net after-tax  charge of $4 million for the  cumulative  effect of an accounting
change,  and net after-tax  expenses of $198 million incurred in connection with
the GE Capital Merger.

     Net income of  International  Factoring  and Asset  Based  Finance for 2000
includes  a net  after-tax  gain  of $7  million  relating  to the  sale  of one
international investment and the liquidation of another.

     Net income of  Domestic  Commercial  Finance  for 1999  includes a one-time
after-tax  gain of $48 million  relating to the sale of assets of our Commercial
Services unit. See Note 4--Commercial Services Sale-- for more details.

     International  Factoring  and Asset Based Finance net income was reduced by
minority interest of $2 million in 2001 and 2000 and of $1 million in 1999.

     We have  allocated  expenses  of our  corporate  support  functions  to our
Domestic  Commercial  Finance segment and our International  Factoring and Asset
Based Finance segment based on estimates of services provided to these segments.
Unallocated  expenses have been included  with our Domestic  Commercial  Finance
segment.
                                       62
<PAGE>
     The following table presents  certain  financial  information by geographic
region for the years ended December 31, 2001,  2000 and 1999. We have attributed
revenues to the specific region of transaction origination.
<TABLE>
<CAPTION>
                                                  For the Year Ended December 31,
                                                -----------------------------------
                                    United                         Other    Asia/    Latin
                                    States    Canada    France    Europe   Pacific  America  Consolidated
                                   -------    ------    ------   -------   -------  -------  ------------
                                                         (in millions)
         Long-lived assets
<S>           <C>                  <C>        <C>       <C>      <C>      <C>       <C>       <C>
              2001..............   $   935    $   3     $  71    $  244   $   18    $   17    $  1,288
              2000..............     1,083        3        73       231       18        22       1,430
              1999..............       824        3        87       228       18        27       1,187
         Total revenues
              2001..............   $ 1,499   $   26     $ 209     $  78    $  27     $  31    $  1,870
              2000..............     1,674       14       223        75       18        33       2,037
              1999..............     1,332        6       187        70       19        23       1,637
</TABLE>

     Long-lived  assets,  according  to SFAS No.  131,  include  investments  in
international  joint ventures,  gross operating  leases,  goodwill,  non-compete
agreements and fixed assets.

22.  Sale of Receivables

     During 2001 and 2000, we sold equipment  loans and leases,  commercial cash
flow  loans,   and   factored   accounts   receivable   through   securitization
transactions.  Additionally,  during  2000 we sold  real  estate  loans  through
securitization   transactions.   We  retained  servicing   responsibilities  and
subordinated  interests,  including  contractual rights to excess cash flows, in
the  securitizations of both equipment loans and leases and commercial cash flow
loans.  We  retained  servicing   responsibilities  for  the  factored  accounts
receivable.  We have no continuing  involvement with the real estate transferred
assets sold in 2000.

     Our retained interests are subordinate to the investor's  interests.  Their
value  is  subject  to  credit,  prepayment,  and  interest  rate  risks  on the
transferred  financial assets. The investors and  securitization  trusts have no
recourse to our other assets for failure of debtors to pay when due.

     Included on our balance  sheet as of  December  31, 2001 are  approximately
$665 million of receivables  which  represent a contractual  right in commercial
cash flow receivables  sold to a special purpose entity.  Our rights to the cash
flows of these receivables are pari passu to those of the senior note holders in
the special purpose entity.

     In 2001, we recognized  pretax  income of  approximately  $5 million on the
securitization  of  commercial  cash  flow  loans,  and  recognized  a  gain  of
approximately $8 million on the securitization of equipment loans and leases. We
did  not  recognize  any  gain or loss  on the  sale  of the  factored  accounts
receivable.

     In 2000, we recognized  pretax gains of  approximately  $12 million on both
the  securitizations  of real estate loans and commercial  cash flow loans,  and
recognized a gain of $1 million on the  securitization  of  equipment  loans and
leases.  We did not  recognize  any  gain or  loss on the  sale of the  factored
accounts receivable.
                                       63
<PAGE>
     The following table presents certain economic assumptions used in measuring
the retained interests related to securitization  transactions  completed during
the year, as of the date of the transaction:
<TABLE>
<CAPTION>
                                                        2001                            2000
                                                        ----                            ----
                                              Equipment      Commercial      Equipment       Commercial
                                              Loans and      Cash Flow       Loans and       Cash Flow
                                                Leases        Loans (1)        Leases       Loans (2)(3)
                                                ------        ---------        ------       ------------

<S>                                              <C>             <C>            <C>             <C>
     Prepayment Speed ...................        11.00%          15.00%         15.00%          15.00%
     Weighted average life (in years) ...         1.64            9.26           1.66            8.47
     Annual expected credit losses ......         0.72%           1.00%          0.58%           1.00%
     Residual cash flows discounted at ..         8.23%          12.78%         10.21%          13.00%
</TABLE>

(1)  Prepayment  speed  assumption  utilized  in  year 4,  after  the end of the
     revolving period of transaction.

(2)  Prepayment  speed  assumption  utilized  in  year 5,  after  the end of the
     revolving period of transaction.

(3)  No credit losses expected in the first year of the transaction.

     As of December 31, 2001, we held retained  interests  from previous  years'
securitizations,  in addition to those  occurring in 2001.  The following  table
presents  the fair values of our  retained  interests  as of December  31, 2001,
along with key  economic  assumptions  used to derive the values as of year-end.
The table also presents the  sensitivity  of the current fair value to immediate
10 percent and 20 percent adverse changes in the listed economic assumptions.
<TABLE>
<CAPTION>
                                                                   Equipment       Commercial
                                                                  Loans and        Cash Flow
                                                                    Leases         Loans (1)
                                                                 -----------      ----------
                                                                     (dollars in millions)
<S>                                                              <C>               <C>
     Fair value of retained interests as of
       December 31, 2001 .................................       $       21        $     429
     Weighted-average
       life (in years) ...................................             1.57             7.33

     Prepayment speed
       Assumption (annual rate) ..........................             11.0%            15.0%
     Impact on fair value of 10%
       adverse change ....................................              N/M              N/M
     Impact on fair value of 20%
       adverse change ....................................              N/M              N/M

     Expected credit losses
       (annual rate) .....................................             0.72%            1.00%
     Impact on fair value of 10%
       adverse change ....................................              N/M        $      (8)
     Impact on fair value of 20%
       adverse change ....................................       $       (1)       $     (15)

     Residual cash flows
       Discount rate (annual) ............................             8.10%            7.21%
     Impact on fair value of 10%
       adverse change ....................................              N/M        $     (16)
     Impact on fair value of 20%
       adverse change ....................................        $      (1)       $     (30)
</TABLE>

(1)  Prepayment  speed  assumption  utilized  in  year 4,  after  the end of the
     revolving period of transaction.
                                       64
<PAGE>
     These  sensitivities  are hypothetical and should be used with caution.  As
the amounts  indicate,  changes in fair value based on a 10 percent variation in
assumptions  generally  cannot be extrapolated  because the  relationship of the
change in assumption to the change in fair value may not be linear. Also, in the
above table,  the effect of a variation in a particular  assumption  on the fair
value  of the  retained  interest  is  calculated  without  changing  any  other
assumption;  in reality, changes in one factor may result in changes in another,
which might magnify or counteract the sensitivities.

     Certain   retained   interests   from  our   equipment   loans   and  lease
securitizations have been excluded from the above sensitivity analysis, as these
interests have no ascribed value as of December 31, 2001. We have also excluded,
from the sensitivity  analysis, a retained interest from a securitization of our
SBA 7(a) loans (unguaranteed portion) due to an assessment of immateriality,  in
light of both quantitative and qualitative factors.

     The following table illustrates expected static pool credit losses.  Static
pool credit losses are  calculated  by summing the actual and  projected  future
credit losses and dividing these losses by the original  balance of each pool of
assets.  The amounts shown below are a weighted average for all  securitizations
in which  Heller has  retained a material  interest,  based on  qualitative  and
quantitative factors, as of December 31, 2001.
<TABLE>
<CAPTION>
                                                                         Equipment       Commercial
                                                                         Loans and     Cash Flow Loans
                                                                           Leases
                                                                         ---------      -------------
 <S>                                                                        <C>             <C>
        Actual and Projected Credit Losses (%) as of:
                  December 31, 2001...............................         1.19%(1)        2.47% (2)
</TABLE>

(1)  No losses  have been  recorded  to date on  transaction.  Ratio  calculates
     estimate  of  projected  future  credit  losses  over  1.64  year  life  of
     transaction.

(2)  No losses  have been  recorded  to date on  transaction.  Ratio  calculates
     estimate of projected future credit losses over remaining  eleven-year life
     of transaction.

     The table below  summarizes  certain  cash flows  received  from/(paid  to)
securitization  trusts for all  securitization  activity  occurring  in 2001 and
2000:
<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                                 2001              2000
                                                                                 ----              ----
                                                                                     (in millions)
     Proceeds from collections reinvested during revolving period
<S>                                                                           <C>                <C>
             of previous securitizations ...........................          $ 2,368            $   966
     Proceeds from new securitizations..............................              767              1,504
     Other cash flows received on retained interests................               62                  4
     Servicing fees received........................................                4                  3
     Servicing advances.............................................             (154)              (140)
     Repayment of servicing advances................................              145                136
     Other..........................................................               --                (25)
</TABLE>
                                       65
<PAGE>

         The following illustration presents quantitative information about
delinquencies, net credit losses, and components of securitized financial assets
and other assets managed together with them:
<TABLE>
<CAPTION>
                                                                         Principal Amount
                                                     Total Principal    of Loans 60 Days
                                                     Amount of Loans    or more past due    Net Credit Losses
                                                      -------------       -------------      ---------------
                                                             At December 31, 2001            During the Year
                                                             --------------------            ---------------
<S>                                                    <C>                <C>                 <C>
     Type of Asset                                                        (in millions)
       Equipment loans and leases................      $    4,093         $      150           $      45
       Commercial cash flow loans ...............           4,296                 27                  90
                                                       ----------         ----------           ---------
     Total assets managed or securitized.........      $    8,389         $      177           $     135
                                                                          ==========           =========
       Less:  assets securitized ................            (935)
                                                       -----------
     Assets held in portfolio (1)................      $    7,454
                                                       ==========
</TABLE>

(1)  For securitized asset types where Heller retains an interest as of December
     31, 2001.

23.   Summary of Quarterly Financial Information (Unaudited)

     The following financial information for the calendar quarters of 2001, 2000
and 1999, is unaudited. In the opinion of management,  all adjustments necessary
to present fairly the results of operations for such periods have been included.
<TABLE>
<CAPTION>
                                                               Quarter Ended
                                                               -------------
                                            March 31      June 30     September 30  December 31
                                            --------      -------     ------------  -----------
                                  (in millions)
<S>                                              <C>           <C>           <C>          <C>
         Net interest income
              2001.....................          154           167           179          138
              2000.....................          146           157           163          163
              1999.....................          113           118           133          148
         Operating revenues
              2001.....................          253           272           277          218
              2000.....................          261           262           261          254
              1999.....................          223           225           239          265
         Provision for losses
              2001.....................           60            57           104           76
              2000.....................           30            41            36           41
              1999.....................           29            30            37           40
         Net income (loss)
              2001.....................           46            67            48         (168)
              2000.....................           75            70            72           73
              1999.....................           57            58            59          110
</TABLE>

     Net income for the third and fourth  quarters of 2001 includes an after-tax
charge of $3 million and $195  million,  respectively,  for charges  incurred in
connection with the GE Capital Merger.  Net income for the first quarter of 2001
also includes a net after-tax  charge of $8 million for the  discontinuation  of
the  origination  of SBA loans and a net after-tax  charge of $4 million for the
cumulative  effect of an accounting  change.  As disclosed in amended  Quarterly
Reports on Form 10-Q/A for the periods ended March 31, 2001,  June 30, 2001, and
September 30, 2001, each filed  concurrently with this Annual Report. Net income
for the fourth quarter of 1999 includes a one-time after-tax gain of $48 million
relating  to the  sale of  assets  of our  Commercial  Services  unit.  See Note
4--Commercial Services Sale-- for more details.

                                       66
<PAGE>
24.      Subsequent Events

     On  May  22,  2002,  Heller  International  Group  (HIG),  a  wholly  owned
subsidiary of Heller Financial,  Inc., transferred all of the outstanding common
stock of Heller  Holding  France  S.A.  (HHF),  the  French  holding  company of
Factofrance  Heller S.A.  and Heller  Factoring  Espanola,  S.A.,  to GE Capital
European  Investments,  Inc. In exchange for the common stock of HHF, GE Capital
European  Investments,  a wholly owned  subsidiary of General  Electric  Capital
Corporation,  issued to HIG 6,710 shares of Series A preferred  stock with a par
value of $100,000 per share.  These preferred  shares pay quarterly,  cumulative
dividends at an annual fixed rate of 6.20%,  are non-voting and are  mandatorily
redeemable  after  twenty one years.  Heller will  account for this  exchange of
shares between  entities  under common control using the carryover  basis of the
transferred net assets which were approximately $447 million as of May 22, 2002.
No gain or loss will be recorded in connection with the transfer.  The total HHF
assets and liabilities  transferred  approximated $2.5 billion and $2.0 billion,
respectively.  Operating  revenues and pre-tax  income for the  transferred  HHF
entities  amounted to $150 million and $65 million,  respectively,  for the year
ended December 31, 2001.

ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

     On January 21,  2002,  Arthur  Andersen  LLP  ("Andersen")  resigned as the
principal  independent  accountant to audit the financial  statements of Heller.
Andersen  resigned  because it concluded it was not independent  with respect to
Heller  once Heller was  acquired by General  Electric  Capital  Corporation  on
October 24, 2001.  During the two years ended  December  31,  2001,  and through
January  21,  2002 (the  "reporting  period"),  none of  Andersen's  reports  on
Heller's  financial  statements  contained  an adverse  opinion,  disclaimer  of
opinion,  or was  qualified  or  modified  as to  uncertainty,  audit  scope  or
accounting  principles.  There was no  disagreement  with  Andersen  during  the
reporting period on any matter of accounting principles or practices,  financial
statement  disclosure,  or auditing scope or procedures that, if not resolved to
the  satisfaction  of Andersen,  would have caused Andersen to make reference to
the  subject  matter  of the  disagreement  in any of its  reports  on  Heller's
financial statements. Also, there was no "reportable event" during the reporting
period as described in Item  304(a)(1)(v) of Regulation  S-K.  Heller  requested
Andersen to provide a letter addressed to the Securities and Exchange Commission
(the "SEC") stating whether Andersen agrees with the above statements. A copy of
that letter was filed with the SEC in Heller's  Current Report on Form 8-K dated
January 25, 2002. On January 23, 2002, Heller engaged KPMG LLP ("KPMG") to audit
Heller's financial  statements for the year ended December 31, 2001, as approved
by Heller's  Board of Directors.  KPMG has not been engaged during the reporting
period  as  either  the  principal  independent  accountant  to  audit  Heller's
financial   statements  or  the  independent  account  to  audit  the  financial
statements of any  significant  subsidiary of Heller.  Also,  neither Heller nor
anyone on its behalf has consulted  with KPMG during the reporting  period about
any of the matters listed in Item 304(a)(2)(i) or (ii) of Regulation S-K.



                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

                                            Omitted


ITEM 11.   EXECUTIVE COMPENSATION

                                            Omitted


ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                                            Omitted


ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                                            Omitted


                                       67
<PAGE>
                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Documents Filed as Part of This Report:

     1.   Financial Statements (All Financial Statements listed below are those
          of the Company and its consolidated subsidiaries):

          Reports  of  Independent  Public   Accountants--KPMG  LLP  and  Arthur
          Andersen LLP

          Consolidated Balance Sheets--December 31, 2001 and 2000

          Consolidated  Statements  of Income for the Years Ended  December  31,
          2001, 2000 and 1999

          Consolidated Statements of Cash Flows for the Years Ended December 31,
          2001, 2000 and 1999

          Consolidated  Statements  of Changes in  Stockholder's  Equity for the
          Years Ended December 31, 2001, 2000 and 1999

          Notes to Consolidated Financial Statements

     2.   Financial Statement Schedules:

          Schedules are omitted because they are not applicable or because the
          required information appears in the financial statements or the notes
          thereto.

     3.   Exhibits:

          Any  shareholder  who would like a copy of the following  Exhibits may
          obtain one upon request from the Company at a charge that reflects the
          reproduction  cost of such  Exhibits.  Requests  should be made to the
          Corporate  Secretary,  Heller  Financial,  Inc.,  500 W.  Monroe  St.,
          Chicago, IL 60661.

          (2)(a)          Agreement and Plan of Merger by and among General
                          Electric Capital Corporation (GE Capital), Hawk
                          Acquisition Corporation and the Company dated as of
                          July 30, 2001, are incorporated by reference to
                          Exhibit 2.1 to the Company's Current Report on Form
                          8-K, filed on August 3, 2001 (File No. 1-6157).

          (3)(a)          Amended  and  Restated  Certificate  of  Incorporation
                          of the Company,  dated April 30, 1998, is incorporated
                          by reference to Exhibit 3.1 to the  Company's
                          Quarterly  Report on Form 10-Q for the period ended
                          March 31, 1998 (File No. 1-6157).

          (3)(b)*         Amended and Restated By-laws of the Company,
                          adopted on October 25, 2001.

          (4)(a)          Certificate of Designation, Preferences and Rights of
                          the Company's Fixed Rate Noncumulative Perpetual
                          Senior Preferred Stock, Series C (Liquidation
                          Preference $100.00 Per Share) filed with the Secretary
                          of State of Delaware on November 5, 1997, is
                          incorporated by reference to Exhibit 4.4 to the
                          Company's Registration Statement on Form S-4 dated
                          October 24, 1997 (File No. 333-38627).

          (4)(b)          Certificate of Designation, Preferences and Rights of
                          the  Company's  Fixed Rate  Noncumulative  Perpetual
                          Senior Preferred Stock,  Series D (Liquidation
                          Preference  $100.00 Per Share), filed with the
                          Secretary of State of Delaware on December 3, 1998 is
                          incorporated  by  reference  to Exhibit 4)(c) to the
                          Company's  Annual Report on Form 10-K for the
                          Fiscal  Year ended  December  31,  1998,  as amended
                          on Form 10-K/A (File No. 1-6157).

                                       68
<PAGE>
          (4)(c)          Heller Financial, Inc. Standard Multiple-Series
                          Indenture Provisions dated February 5, 1987 are
                          incorporated by reference to Exhibit (4)(a) to the
                          Company's Registration Statement on Form S-3 dated
                          February 5, 1987 (File No. 33-11757).

          (4)(d)          Indenture dated as of September 1, 1995 between the
                          Company and State Street Bank and Trust Company, as
                          successor to Shawmut Bank Connecticut, National
                          Association, as Trustee, with respect to Senior
                          Securities is incorporated by reference to Exhibit 4.3
                          to the Company's Registration Statement on Form S-3
                          dated October 23, 1997 (File No. 333-38545).

          (4)(e)          First Supplemental Indenture dated as of October 13,
                          1995, to the Indenture dated as of September 1, 1995,
                          between the Company and State Street Bank and Trust
                          Company, as successor to Shawmut Bank Connecticut,
                          National Association, as Trustee, with respect to
                          Senior Securities is incorporated by reference to an
                          exhibit to the Company's Current Report on Form 8-K,
                          filed October 18, 1995 (File No. 1-6157).

          (4)(f)          Second Supplemental Indenture dated November 17, 1997
                          to the Indenture dated September 1, 1995 between the
                          Company and State Street Bank and Trust Company, as
                          Trustee, with respect to Senior Securities is
                          incorporated by reference to Exhibit 4(a) to the
                          Company's Current Report on Form 8-K filed
                          December 4, 1997 (File No.1-6157).

          (4)(g)          Third Supplemental Indenture dated as of August 16,
                          1999 to the Indenture dated September 1, 1995 between
                          the Company and State Street Bank and Trust Company,
                          as Trustee, with respect to Senior Securities is
                          incorporated by reference to Exhibit 4 to the
                          Company's Quarterly Report on Form 10-Q for the
                          period ended September 30, 1999 (File No. 1-6157).

          (4)(h)          Indenture dated as of September 1, 1995 between the
                          Company and State Street Bank and Trust Company, as
                          successor to Shawmut Bank Connecticut, National
                          Association, as Trustee, with respect to Subordinated
                          Securities is incorporated by reference to
                          Exhibit 4.5 to the Company's Registration Statement
                          on Form S-3 dated October 23, 1997
                          (File No. 333-38545).

          (4)(i)          First Supplemental Indenture dated as of October 13,
                          1995, to the Indenture dated as of September 1, 1995,
                          between the Company and State Street Bank and Trust
                          Company, as successor to Shawmut Bank Connecticut,
                          National Association, as Trustee, with respect to
                          Subordinated Securities is incorporated by reference
                          to an exhibit to the Company's Current Report on Form
                          8-K, filed October 18, 1995 (File No. 1-6157).

          (4)(j)*         Second Supplemental Indenture dated as of May 1, 2001,
                          to the Indenture dated as of September 1, 1995,
                          between the Company and State Street Bank and Trust
                          Company, as successor to Shawmut Bank Connecticut,
                          National Association, as Trustee, with respect to
                          Subordinated Securities.

          (4)(k)          Indenture dated as of September 1, 1995 between the
                          Company and State Street Bank and Trust Company, as
                          successor to Shawmut Bank Connecticut, National
                          Association, as Trustee, with respect to Junior
                          Subordinated Securities is incorporated by reference
                          to Exhibit 4.7 to the Company's Registration Statement
                          on Form S-3 dated October 23, 1997 (File No.
                          333-38545).

                                       69
<PAGE>
          (4)(l)          First Supplemental Indenture dated October 13, 1995 to
                          the Indenture dated as of September 1, 1995 between
                          the Company and State Street Bank and Trust Company,
                          as successor to Shawmut Bank Connecticut, National
                          Association, as Trustee, with respect to Junior
                          Subordinated Securities is incorporated by reference
                          to Exhibit 4(d)(i) to the Company's Current Report on
                          Form 8-K filed October 18, 1995 (File No. 1-6157).

          (4)(m)          Form of Medium-Term Note, Series J (Fixed Rate) due
                          from 9 months to 30 years from date of issue is
                          incorporated by reference to Exhibit 4(a) to the
                          Company's Current Report on Form 8-K filed
                          October 6, 1999 (File No. 1-6157).

          (4)(n)          Form of Medium-Term Note, Series J (Fixed Rate/
                          Currency Indexed) due from 9 months to 30 years from
                          date of issue is incorporated by reference to Exhibit
                          4(b) to the Company's Current Report on Form 8-K filed
                          October 6, 1999 (File No. 1-6157).

          (4)(o)          Form of Medium-Term Note, Series J (Floating Rate) due
                          from 9 months to 30 years from date of issue filed as
                          Exhibit 4(c) to the Company's Current Report on Form
                          8-K filed October 6, 1999 (File No. 1-6157).

          (4)(p)          Form of Medium-Term Note, Series J (Floating Rate/
                          Currency Indexed) due from 9 months to 30 years from
                          date of issue is incorporated by reference to Exhibit
                          4(d) to the Company's Current Report on Form 8-K filed
                          October 6, 1999 (File No. 1-6157).

          (4)(q)          Programme Manual dated October 16, 2000 for
                          $2,000,000,000 Euro Medium-Term Programme for which
                          Heller Financial, Inc. is an issuer and guarantor
                          and Heller Financial Canada, Ltd. is an issuer is
                          incorporated by reference to Exhibit 4(q) to the
                          Company's Annual Report on Form 10-K for the fiscal
                          year ended December 31, 2000 (File No. 1-6157).

          (4)(r)          Form as Amended and Restated Declaration of Trust of
                          HFI Trust I is incorporated by reference to Exhibit
                          4.16 of the Company's Amendment No. 2 to Form S-3
                          filed on April 20, 2001 (File No. 333-58052).

          (4)(s)          Form of Purchase Contract Agreement between the
                          Company and BNY Midwest Trust Company, as purchase
                          contract agent is incorporated by reference to the
                          Company's Amendment No. 2 to Form S-3 filed on
                          April 20, 2001 (File No. 333-58052).

          (10)(a)         Amended and Restated Keep Well Agreement between The
                          Fuji Bank, Limited (Fuji Bank) and the Company, as
                          amended, is incorporated by reference to Exhibit 4.13
                          to the Company's Registration Statement on Form S-3
                          dated July 8, 1998 (File No. 333-58723).

          (10)(b)         Assignment and Assumption of Amended and Restated Keep
                          Well Agreement among the Company, GE Capital and Fuji
                          Bank dated as of July 30, 2001, is incorporated by
                          reference to Exhibit 10.1 to the Company's Current
                          Report on Form 8-K filed August 3, 2001 (File No.
                          1-6157).

          (10)(c)         Registration Rights Agreement dated May 6, 1998
                          between the Company and Fuji Bank is incorporated by
                          reference to Exhibit (10)(b) to the Company's Annual
                          Report on Form 10-K for the Year Ended December 31,
                          1998, as amended on Form 10-K/A (File No. 1-6157).

          (10)(d)         Services Agreement dated January 1, 1985 between the
                          Company and Fuji Bank is incorporated by reference to
                          Exhibit (10)(e) to the Company's Annual Report on Form
                          10-K for the Fiscal Year ended December 31, 1992 (File
                          No. 1-6157).

                                       70
<PAGE>
          (10)(e)         Management Services Agreement dated as of January 2,
                          1998 between Fuji America Holdings, Inc. (FAHI) and
                          the Company is incorporated by reference to Exhibit
                          10(d) to the Company's Annual Report on Form 10-K for
                          the Fiscal Year ended December 31, 1997, as amended on
                          Form 10-K/A (File No. 1-6157).

          (10)(f)         Agreement for the Allocation of Federal Income Tax
                          Liability and Benefits among FAHI and the Company,
                          effective as of January 2, 1998, incorporated by
                          reference to the Company's Annual Report on Form 10-K
                          for the Fiscal Year ended December 31, 1998, as
                          amended on Form 10-K/A (File No. 1-6157).

          (10)(g)         Supplemental Executive Retirement Benefit Plan,
                          amended and restated effective January 1, 1996, is
                          incorporated by reference to Exhibit (10)(e) to the
                          Company's Annual Report on Form 10-K for the Fiscal
                          Year ended December 31, 1996 (File No. 1-6157).

          (10)(h)         First Amendment to the Company's Supplemental
                          Executive Retirement Plan effective as of January 1,
                          1999, is incorporated by reference to the Company's
                          Quarterly Report on Form 10-Q for the period ended
                          September 30, 1999 (File No. 1-6157).

          (10)(i)         Heller Financial, Inc. Executive Deferred Compensation
                          Plan (as amended and restated effective as of
                          January 1, 2001) is incorporated by reference to the
                          Company's Annual Report on Form 10-K for the year
                          ended December 31, 2000 (File No. 1-6157).

          (10)(j)         First Amendment of Heller Financial, Inc. Executive
                          Deferred Compensation Plan (as amended and restated
                          effective as of January 1, 2001) is incorporated by
                          reference to the Company's Annual Report on Form 10-K
                          for the year ended December 31, 2000 (File No.
                          1-6157).

          (10)(k)         Second Amendment of Heller Financial, Inc. Executive
                          Deferred Compensation Plan (as amended and restated
                          effective as of January 1, 2001) dated August 15, 2001
                          is incorporated by reference to Exhibit (10)(a) to the
                          Company's Quarterly Report on Form 10-Q for the period
                          ended September 30, 2001 (File No. 1-6157).

          (10)(l)         Heller Financial, Inc. Deferral Restoration Plan
                          (Effective January 1, 2001) is incorporated by
                          reference to the Company's Annual Report on Form 10-K
                          for the year ended December 31, 2000 (File No. 1-6157)

          (10)(m)         Form of Change in Control Agreement is incorporated by
                          reference to Exhibit 10.32 to the Company's
                          Registration Statement on Form S-2 initially filed on
                          February 26, 1998, as amended (File No. 333-46915).

          (12)*           Computation of Ratio of Earnings to Combined Fixed
                          Charges and Preferred Stock Dividends

          (16)            Confirming Letter from Arthur Andersen LLP dated
                          January 25, 2002 concerning change in certifying
                          accountant is incorporated by reference to Exhibit 16
                          to the Company's Current Report on Form 8-K,
                          filed on January 25, 2002 (File No. 1-6157).

          (24)*           Power of Attorney

          (99.1)*         Certification  Pursuant To 18 U.S.C. Section  1350, As
                          Adopted Pursuant To Section 906 Of The Sarbanes-Oxley
                          Act Of 2002

          (99.2)*         Certification Pursuant To 18 U.S.C. Section 1350, As
                          Adopted Pursuant To Section 906 Of The  Sarbanes-Oxley
                          Act Of 2002






         *Filed herewith.

                                       71
<PAGE>
      Instruments defining the rights of holders of certain issues of long-term
debt of the Company have not been filed as exhibits to this Report because the
authorized principal amount of any one of such issues does not exceed 10% of the
total assets of the Company. The Company hereby agrees to furnish to the
Securities and Exchange Commission, upon request, a copy of each instrument that
defines the rights of holders of the Company's long-term debt.

     (b)  Current Reports on Form 8-K:
<TABLE>
<CAPTION>

          Date of Report              Item  Description

<S>       <C>                           <C>    <C>
          January 17, 2001            5,7   A report filing a press release announcing the declaration of
                                            dividends on the Company's common and preferred stocks.
          January 18, 2001            5,7   A report filing a press release announcing (i) earnings for the year
                                            ending December 31, 2000, (ii) selection by the Board of Directors of
                                            May 3, 2001 as the date for the Annual Meeting of Stockholders, and
                                            (iii) selection by the Board of Directors of March 9, 2001 as the
                                            record date for voting at the Annual Meeting of Stockholders.
          February 20, 2001           5,7   A report filing a press release announcing the cessation of new
                                            business origination in the Company's Small Business Finance unit.
          April 11, 2001              5,7   A report filing a press release announcing that all outstanding
                                            shares of the Company's 8-1/8% Cumulative Perpetual Senior Preferred
                                            Stock, Series A, will be redeemed on May 15, 2001.
          April 18, 2001              5,7   A report filing a press release announcing the declaration of
                                            dividends on the Company's common and preferred stocks.
          April 19, 2001              5,7   A report filing a press release  announcing the Company's earnings for
                                            the quarter ending March 31, 2001.
          July 17, 2001               5,7   A report filing a press release announcing the declaration of
                                            dividends on the Company's common and preferred stocks.
          July 19, 2001               5,7   A report filing a press release announcing the Company's earnings for
                                            the quarter ended June 30, 2001.
          July 30, 2001               5,7   A report filing a press release announcing that the Company and GE
                                            Capital have entered into a definitive merger agreement for GE Capital
                                            to acquire the Company.
          August 3, 2001              5,7   A report filing the Agreement and Plan of Merger by and among GE
                                            Capital, Hawk Acquisition Corp. and the Company and the Assignment and
                                            Assumption of Amended and Restated Keep Well Agreement among the
                                            Company, The Fuji Bank Limited, and GE Capital.
          October 18, 2001            5,7   A report filing a press release announcing the declaration of
                                            dividends on the Company's preferred stocks.
          October 25, 2001            5,7   A report filing changes in control of the registrant.
          January 21, 2002             4    A report filing changes in registrant's certifying accountant.

</TABLE>






                                       72
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized on this 2nd day of
August, 2002.

                                             HELLER FINANCIAL, INC.

                                             By: /s/  RANDOLPH T. BROWN
                                                 -------------------------
                                                 Randolph T. Brown
                                                 Chief Executive Officer,
                                                 Chief Financial Officer and
                                                 Chief Accounting Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-K has been signed by the following persons on behalf of the registrant
in their capacities and on the date indicated.

  Signature                        Title                          Date
  ---------                        -----                          -----

  /s/   RANDOLPH T. BROWN         Chief Executive Officer         August 2, 2002
 ------------------------
        (Randolph T. Brown)

  /s/   RANDOLPH T. BROWN         Chief Financial Officer         August 2, 2002
 ------------------------
        (Randolph T. Brown)

  /s/   RANDOLPH T. BROWN         Chief Accounting Officer        August 2, 2002
 ------------------------
        (Randolph T. Brown)

   Nancy E. Barton*               Director

   Mark H.S. Cohen*               Director

   James A. Parke*                Director

    A MAJORITY OF THE BOARD OF DIRECTORS

  * By: /s/   RANDOLPH T. BROWN                                   August 2, 2002
        -----------------------
            (Randolph T. Brown)
             Attorney-in-fact




                                       73
<PAGE>


                                                                    EXHIBIT (12)

                             HELLER FINANCIAL, INC.

                        COMPUTATION OF RATIO OF EARNINGS
             TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

<TABLE>
<CAPTION>

                                                                     2001      2000    1999     1998    1997
                                                                     -----     ----    -----   ------  ------
                                                                          (dollar amounts in millions)
<S>                                                                <C>      <C>       <C>      <C>     <C>
(Loss) income before taxes, minority interest,  and cumulative
      effect of accounting change.............................     $  (49)  $  431    $ 439    $ 290   $ 233
Add-Fixed charges
      Interest and debt expense....................................    850     999      685      624     516
      One-third of rentals.........................................      9      10       10       11       8
                                                                    ------  ------   -------   -----   -----
         Total fixed charges.......................................    859   1,009      695      635     524
                                                                    ------  ------   -------   -----   -----
Net income as adjusted.............................................    810   1,440    1,134      925     757
                                                                    ------  ------   -------   -----   -----
Ratio of earnings to fixed charges.................................   0.94x   1.43x     1.63x   1.46x   1.44x
                                                                    ======  ======   =======   =====   =====
 Preferred stock dividends on a pre-tax basis...................... $   36  $   43     $ 44    $  31   $  21
              Total combined fixed charges and preferred
              stock dividends......................................    895   1,052      739      666     545
                                                                    ------  ------   -------   -----   -----
 Ratio of earnings to combined fixed charges and preferred
   stock dividends.................................................   0.91x   1.37x     1.53x   1.39x   1.39x
                                                                    ======  ======   =======   =====   =====
</TABLE>

     For purposes of computing  the ratio of earnings to combined  fixed charges
and preferred  stock  dividends,  earnings  includes income before income taxes,
minority interest and fixed charges.  Combined fixed charges and preferred stock
dividends  includes  interest on all  indebtedness,  one third of annual rentals
(approximate portion  representing  interest) and preferred stock dividends on a
pre-tax basis.


                                       74
<PAGE>

                                                                      Exhibit 24

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being directors of
Heller Financial, Inc., a Delaware corporation (the "Corporation"), hereby
constitutes and appoints Randolph T. Brown, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead in any and all capacities, to sign one or more Annual
Reports for the Corporation's fiscal year ended December 31, 2001, on Form 10-K
under the Securities Exchange Act of 1934, as amended, or such other form as
such attorney-in-fact may deem necessary or desirable, any amendments thereto,
and all additional amendments thereto in such form as he may approve, and to
file the same with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done to the end that such
Annual Report or Annual Reports shall comply with the Securities Exchange Act of
1934, as amended, and the applicable Rules and Regulations of the Securities and
Exchange Commission adopted or issued pursuant thereto, as fully and to all
intents and purposes as he might or could in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
resubsitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand this 30 th
day of July 2002.




/s/   Nancy E. Barton                           /s/  James A. Parke
--------------------------                      ---------------------------
Nancy E. Barton                                 James A. Parke
Director                                        Director




                                    /s/  Mark H.S. Cohen
                                    ---------------------------
                                    Mark H.S. Cohen
                                    Director





A MAJORITY OF THE BOARD OF DIRECTORS



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