UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                ----------------

                                    FORM 10-K
                           --------------------------

            |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

                  For the transition period from _____ to _____

                           ---------------------------
                         Commission file number 0-14804
                           ---------------------------

                     General Electric Capital Services, Inc.
             (Exact name of registrant as specified in its charter)

           Delaware                                          06-1109503
-------------------------------                         --------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)


 260 Long Ridge Road,
Stamford, Connecticut                 06927                (203) 357-4000
----------------------          ---------------     ---------------------------
(Address of principal              (Zip Code)         (Registrant's telephone
  executive offices)                                number, including area code)


                           --------------------------

                         SECURITIES REGISTERED PURSUANT
                          TO SECTION 12(b) OF THE ACT:


    Title of each class                                       Name of each
------------------------------                      exchange on which registered
7 1/2% Guaranteed Subordinated                      ----------------------------
  Notes Due August 21, 2035                             New York Stock Exchange


                         SECURITIES REGISTERED PURSUANT
                          TO SECTION 12(g) OF THE ACT:
                               Title of each class
                        -------------------------------

                    Common Stock, par value $1,000 per share

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 March 7, 2002,  1,012 shares of voting common stock,  which constitute all of
the outstanding common equity, with a par value of $1,000 were outstanding.

Aggregate market value of the outstanding common equity held by nonaffiliates of
the registrant at March 7, 2002. None.

                       DOCUMENTS INCORPORATED BY REFERENCE

The consolidated  financial statements of General Electric Company, set forth in
the Annual  Report on Form 10-K of General  Electric  Company for the year ended
December 31, 2001 are incorporated by reference into Part IV hereof.

Item 1.  Business - Property and Casualty  Reserves for Unpaid  Claims and Claim
Expenses,  set forth in the  Annual  Report on Form 10-K of GE Global  Insurance
Holding  Corporation  for the year ended  December 31, 2001 is  incorporated  by
reference into Part I hereof.

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.
<PAGE>


                                                        TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>            <C>                                                                                                  <C>
                                                                                                                     Page
PART I
     Item 1.   Business ..........................................................................................     1
     Item 2.   Properties ........................................................................................    12
     Item 3.   Legal Proceedings .................................................................................    12
     Item 4.   Submission of Matters to a Vote of Security Holders ...............................................    12

PART II

     Item 5.   Market for the Registrant's Common Equity and Related Stockholder Matters .........................    13
     Item 6.   Selected Financial Data ...........................................................................    13
     Item 7.   Management's Discussion and Analysis of Results of Operations .....................................    13
     Item 7A.  Quantitative and Qualitative Disclosures About Market Risk ........................................    27
     Item 8.   Financial Statements and Supplementary Data .......................................................    28
     Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ..............    52

PART III

     Item 10.  Directors and Executive Officers of the Registrant ................................................    53
     Item 11.  Executive Compensation ............................................................................    53
     Item 12.  Security Ownership of Certain Beneficial Owners and Management ....................................    53
     Item 13.  Certain Relationships and Related Transactions ....................................................    53

PART IV

     Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K ..................................    54

</TABLE>

<PAGE>
                                       1

                                     PART I

Item 1.  Business.

GENERAL ELECTRIC CAPITAL SERVICES, INC.

General Electric Capital Services, Inc. (herein,  together with its consolidated
affiliates, called "GE Capital Services", "the Corporation" or "GECS" unless the
context  otherwise  requires) was incorporated in 1984 in the State of Delaware.
Until February 1993, the name of the Corporation was General Electric  Financial
Services,  Inc. All  outstanding  common  stock of GE Capital  Services is owned
directly or indirectly by General Electric Company,  a New York corporation ("GE
Company" or "GE"). The business of GE Capital Services  consists of ownership of
two principal subsidiaries which, together with their affiliates,  constitute GE
Company's  principal financial services  businesses.  GE Capital Services is the
sole owner of the common  stock of General  Electric  Capital  Corporation  ("GE
Capital"  or "GECC") and GE Global  Insurance  Holding  Corporation  ("GE Global
Insurance Holdings").

GE Capital  Services'  principal  executive  offices are at 260 Long Ridge Road,
Stamford, Connecticut 06927 (Telephone number (203) 357-4000).

GENERAL ELECTRIC CAPITAL CORPORATION

GE  Capital  was  incorporated  in 1943  in the  State  of New  York  under  the
provisions  of the New York Banking Law  relating to  investment  companies,  as
successor to General Electric Contracts  Corporation,  which was formed in 1932.
The capital  stock of GE Capital was  contributed  to GE Capital  Services by GE
Company in June 1984.  Until  November  1987,  the name of the  corporation  was
General  Electric  Credit  Corporation.  On July 2, 2001, GE Capital changed its
state of  incorporation  to  Delaware.  The  business  of GE Capital  originally
related principally to financing the distribution and sale of consumer and other
products of GE  Company.  Currently,  however,  the types and brands of products
financed and the services offered are significantly more diversified. GE Company
manufactures few of the products financed by GE Capital.

GE Capital  operates in five key operating  segments  that are described  below.
These  operations are subject to a variety of  regulations  in their  respective
jurisdictions.

Services of GE Capital  are  offered  primarily  in the United  States,  Canada,
Europe and the Pacific Basin. GE Capital's  principal  executive  offices are at
260 Long Ridge Road,  Stamford,  Connecticut  06927.  At December 31,  2001,  GE
Capital and affiliates employed approximately 88,000 persons.

GE GLOBAL INSURANCE HOLDING CORPORATION

GE Global Insurance Holdings, together with its affiliates, writes substantially
all lines of reinsurance  and certain lines of property and casualty  insurance.
GE  Global  Insurance  Holdings  has  three  principal  subsidiaries:  Employers
Reinsurance  Corporation,  GE  Reinsurance  Corporation  and Medical  Protective
Corporation.   These  affiliates,   together  with  their  direct  and  indirect
subsidiaries,  reinsure  property and casualty  risks written by more than 1,000
insurers around the world.  They also write certain specialty lines of insurance
on a direct basis,  principally excess workers'  compensation for self-insurers,
medical malpractice  coverage for physicians and dentists,  errors and omissions
coverage for insurance agents and brokers; excess indemnity for self-insurers of
medical  benefits,  and libel and allied  torts.  Other  property  and  casualty
affiliates  write  excess and  surplus  lines  insurance.  The life  reinsurance
affiliates are engaged in the reinsurance of life insurance products,  including
term, whole and universal life,  annuities,  group long-term health products and
the provision of financial reinsurance to life insurers.

GE Global  Insurance  Holdings  operates in three  broad  arenas:  property  and
casualty  reinsurance,  life reinsurance and primary commercial lines. GE Global
Insurance  Holdings  competes with more than 100 other property and casualty and
life  reinsurance  companies  around the world, and with several hundred primary
commercial lines companies in the United States. GE Global Insurance Holdings is
the fourth largest  reinsurer in the world,  based on 2000 net written premiums.
It is a relatively  small niche  player in the broad  primary  commercial  lines
arena. In one of its major primary areas - medical  professional  liability - GE
Global  Insurance  Holdings is the fourth  largest  writer in the United  States
based on 2000 premiums.


<PAGE>
                                       2


Inherent  in GE  Global  Insurance  Holdings  business  is a range of  insurance
underwriting  risks,  weather risk and financial risk associated with inflation,
economic growth or recession in specific areas.  Important  factors to continued
success include maintaining clear underwriting guidelines,  balancing portfolios
geographically  and  demographically  with a broad  variety  of  exposures,  and
maintaining  a  balanced  global  portfolio  exposed  to a variety  of  economic
conditions.  In addition,  the  insurance/reinsurance  industry  can  experience
cyclical turns in profitability associated with catastrophic events.

The global reinsurance industry is operating in an unprecedented  environment in
the aftermath of the events of September 11. After years of the effect of excess
market  capacity,  the global market finds itself in a capacity  crunch and with
many market  participants  declining to write coverage that includes  terrorism.
The challenges associated with quantifying terrorism risk today are significant.
Primary insurers continue to consider alternatives to traditional risk transfer,
including insurance  captives,  structured  securities and derivative  products.
Global  reinsurers are offering ways to meet the demands of this changing global
market  by  expanding  their  markets,  entering  into new  reinsurance  niches,
offering new reinsurance products and spreading their risks geographically. This
changing reinsurance environment may affect the industry's profitability,  which
has historically been influenced by the insurance industry's underwriting cycle,
changes in interest rates and catastrophic events.

Insurance  and  reinsurance  operations  are  subject to  regulation  by various
insurance regulatory agencies.

GE Global Insurance Holdings and its affiliates conduct business  throughout the
world  using a network of local  offices.  The world  headquarters  of GE Global
Insurance  Holdings are at 5200 Metcalf Avenue,  Overland Park, Kansas 66201. At
December  31,  2001,  GE  Global  Insurance  Holdings  and  affiliates  employed
approximately 3,400 persons.

OPERATING SEGMENTS

The  Corporation  provides a wide variety of financing,  asset  management,  and
insurance products and services which are organized into the following operating
segments:

-    Consumer Services - private-label  credit card loans,  personal loans, time
     sales and revolving  credit and inventory  financing for retail  merchants,
     auto leasing and inventory financing, mortgage servicing, retail businesses
     and consumer savings and insurance services.

-    Equipment  Management - leases,  loans, sales and asset management services
     for  portfolios  of  commercial  and  transportation  equipment,  including
     aircraft,  trailers,  auto fleets,  modular space units,  railroad  rolling
     stock, data processing equipment and marine shipping containers.

-    Mid-Market  Financing - loans,  financing and operating  leases,  and other
     services for middle-market customers, including manufacturers, distributors
     and end-users, for a variety of equipment that includes vehicles, corporate
     aircraft, data processing equipment,  medical and diagnostic equipment, and
     equipment  used  in  construction,   manufacturing,   office  applications,
     electronics and telecommunications activities.

-    Specialized  Financing  - loans and  financing  leases  for  major  capital
     assets,  including industrial facilities and equipment,  and energy-related
     facilities;  commercial and residential  real estate loans and investments;
     and loans to and  investments  in public and  private  entities  in diverse
     industries.

-    Specialty  Insurance - U.S. and  international  multiple-line  property and
     casualty reinsurance; certain directly written specialty insurance and life
     reinsurance;  financial guaranty insurance,  principally on municipal bonds
     and asset-backed securities; and private mortgage insurance.

Refer  to  Item  7,   "Management's   Discussion  and  Analysis  of  Results  of
Operations,"  in  this  Annual  Report  on Form  10-K  for a  discussion  of the
Corporation's  Portfolio  Quality.  Item 1.  Business  - Property  and  Casualty
Reserves for Unpaid Claims and Claim Expenses,  which is set forth in the Annual
Report on Form 10-K of GE Global Insurance  Holdings for the year ended December
31,  2001,  is  incorporated   herein,  by  reference.   A  description  of  the
Corporation's principal businesses by operating segment follows.


<PAGE>
                                       3

CONSUMER SERVICES

GE Financial Assurance

GE Financial  Assurance ("GEFA") provides consumers financial security solutions
by selling a wide variety of  insurance,  investment  and  retirement  products,
payment protection insurance and income protection packages,  primarily in North
America,  Europe and Asia.  These  products help consumers  invest,  protect and
retire  and are sold  through  a  family  of  regulated  insurance  and  annuity
affiliates.  GEFA's  principal  product  lines  in  North  America  and Asia are
annuities  (deferred  and  immediate,   fixed  and  variable),   life  insurance
(universal, term, ordinary and group), guaranteed investment contracts including
funding  agreements,  long-term care insurance,  accident and health  insurance,
personal lines of automobile insurance and consumer club memberships.

GEFA's  principal  product  lines and services in Europe are payment  protection
insurance (designed to protect customers' loan repayment obligations),  personal
investment  products,  and travel and personal  accident  insurance,  as well as
management of uninsured loss claims on behalf of victims of traffic accidents.

GEFA's product  distribution  in North America,  Europe and Asia is accomplished
primarily  through four channels:  intermediaries  (brokerage  general agencies,
banks and  securities  brokerage  firms),  dedicated  sales forces and financial
advisors,  worksites,  and direct and  affinity  based  marketing  (through  the
Internet, telemarketing, and direct mail).

GEFA's principal operating affiliates include General Electric Capital Assurance
Company,  First  Colony Life  Insurance  Company,  Federal  Home Life  Insurance
Company,  GE Life and  Annuity  Assurance  Company,  GE  Edison  Life  Insurance
Company, GE Insurance Holdings Limited and GE Life Group Limited.

GEFA  recognizes  that  consolidation  in the financial  services  industry will
create  fewer  but  larger   competitors.   GEFA  believes  that  the  principal
competitive factors in the sale of insurance and investment products are product
features,  commission  structure,  perceived  stability of the  insurer,  claims
paying ability ratings,  service,  name recognition,  price and cost efficiency.
GEFA's  ability to compete is  affected  by its  ability to provide  competitive
products and quality service to the consumer, general agents, licensed insurance
agents and brokers;  to maintain  operating scale; and to continually reduce its
expenses through the elimination of duplicate functions and enhanced technology.

Many  of  GEFA's  activities  are  regulated  by  a  variety  of  insurance  and
other regulators.

GEFA headquarters are in Richmond, Virginia.

Auto Financial Services

GE Capital Auto Financial  Services ("AFS") provided financial services in North
America to automobile dealers, manufacturers, banks, financing companies and the
consumer  customers of those  entities,  both through  traditional  channels and
through  the  Internet.  In the  United  States,  AFS was a leading  independent
provider of leases for new and used motor  vehicles and of  non-prime  financing
products.  In addition,  AFS offered  inventory  financing  programs,  off-lease
vehicle sales,  productivity  enhancing Internet solutions,  and direct loans to
the industry.

On November 29, 2000, AFS announced its decision to discontinue  originating new
lease, loan and commercial  transactions  effective December 1, 2000. Since that
date, AFS operations have consisted of servicing  their existing  portfolios and
re-marketing off-lease vehicles.

AFS headquarters are in Barrington, Illinois.

GE Card Services

GE Card Services  ("CS") is a leading  provider of sales  financing  services to
North  American  retailers in a broad range of consumer  industries.  Details of
financing  plans  differ,  but  include  customized  private-label  credit  card
programs with  retailers and inventory  financing  programs with  manufacturers,
distributors and retailers.

CS offers customized private-label credit card solutions designed to attract and
retain customers for retailers such as JC Penney, ExxonMobil, Wal-Mart, The Home
Depot,  Sam's  Club,  Macy's and  Lowe's.  CS  provides  financing  directly  to
customers of retailers or purchases the retailers' customer receivables. Most of
the  retailers  sell a variety of  products of various  manufacturers  on a time
sales basis. The terms for these financing plans differ according to the size of
contract and credit standing of the customer. Financing is provided to consumers
under contractual arrangements, both with and without recourse to retailers. CS'
wide  range  of  financial  services  includes  application  processing,   sales
authorization, statement billings, customer services and collection services. CS
provides  inventory  financing  for  retailers  primarily in the  appliance  and
consumer  electronics  industries.  CS  maintains  a  security  interest  in the
inventory  financed and retailers are obliged to maintain insurance coverage for
the merchandise financed.
<PAGE>
                                       4


Additionally,  CS issues and services  the GE Capital  Corporate  Card  product,
providing  payment and  information  systems  which help medium and  large-sized
companies reduce travel costs, and the GE Capital Purchasing Card product, which
helps customers streamline their purchasing and accounts payable processes.

CS competes in the unsecured consumer lending market, doing business principally
in the United States and Canada. CS' operations are subject to a variety of bank
and consumer protection regulations.

The unsecured  consumer  lending market's  principal  methods of competition are
price,  servicing  capability including Internet value added e-services and risk
management  capability.  The  unsecured  consumer  lending  market is subject to
various risks including declining retail sales, increases in personal bankruptcy
filings, increasing payment delinquencies and rising interest rates.

CS headquarters are in Stamford, Connecticut.

Global Consumer Finance

GE Capital Global Consumer  Finance ("GCF") is a leading  provider of credit and
insurance  products  and  services  to non-U.S.  retailers  and  consumers.  GCF
provides private-label credit cards and proprietary credit services to retailers
in Europe,  Asia and, to a lesser extent,  Central and South America,  including
Tesco,  The Home  Depot,  Metro and  Wal-Mart,  as well as offering a variety of
direct-to-consumer  credit  programs  such as  consumer  loans,  auto  loans and
finance leases, mortgages, debt consolidation, bankcards and the distribution of
credit insurance.

GCF provides financing to consumers through operations in Argentina,  Australia,
Austria,  Brazil, the Caribbean,  the Czech Republic,  Denmark, France, Germany,
Hong Kong, Hungary, India, Indonesia,  Italy, Japan, Korea, Mexico, New Zealand,
Norway,  Poland,  Portugal,   Republic  of  Ireland,  Slovakia,  Spain,  Sweden,
Switzerland, Taiwan, Thailand, and the United Kingdom.

In March,  May and September 2001, GCF closed  transactions  increasing a former
minority  interest  in  Budapest  Bank in  Hungary  to a 99%  majority  holding.
Budapest Bank is a commercial and retail bank offering a variety of consumer and
small business financing products and new services such as electronic banking.

In June 2001, GCF acquired  igroup Limited,  a leading  provider of mortgage and
debt  consolidation  products  to the UK  market,  which is  based  in  Watford,
England.

GCF's  operations  are  subject  to a variety  of bank and  consumer  protection
regulations  in their  respective  jurisdictions  and a number of countries have
ceilings on rates chargeable to consumers in financial service transactions. The
consumer  lending market is also subject to the risk of declining  retail sales,
changes  in  interest  and  currency  exchange  rates,   increases  in  personal
bankruptcy filings and payment delinquencies.

The  businesses  in which GCF engages are subject to  competition  from  various
types of financial  institutions  including commercial banks, leasing companies,
consumer loan companies,  independent finance companies,  manufacturers' captive
finance companies, and insurance companies. Cross selling multiple products into
its customer base is a critical success factor for GCF.

GCF headquarters are in Stamford, Connecticut.

Mortgage Services

GE Capital Mortgage Services,  Inc.  ("Mortgage  Services") engaged primarily in
the  business of  originating,  purchasing,  selling and  servicing  residential
mortgage loans collateralized by one-to-four-family homes located throughout the
United States.  Mortgage Services obtained servicing through the origination and
purchase of mortgage  loans and servicing  rights,  and  primarily  packaged the
loans it originated and purchased into mortgage-backed  securities which it sold
to investors. Mortgage Services also originated and serviced home equity loans.

On September 29, 2000,  Mortgage  Services closed on a transaction  with a major
mortgage  company,  which is owned by a major national bank holding company,  to
subservice  Mortgage  Services'  mortgage  servicing  portfolio  and to  acquire
Mortgage  Services'  servicing  facility  and  mortgage  origination   business.
Mortgage Services retains its financial interest in the servicing  portfolio and
the related assets, which are now being managed by GE Capital Mortgage Insurance
(see  page  11) and the  results  of which  are now  included  in the  Specialty
Insurance segment. As a result of this transaction, Mortgage Services exited the
business of originating, purchasing and selling of residential mortgage loans.


<PAGE>
                                       5


EQUIPMENT MANAGEMENT

Aviation Services

GE Capital Aviation  Services  ("GECAS"),  the world's foremost aircraft leasing
company, is a global commercial aviation financial services business that offers
a broad range of financial  products to airlines,  aircraft  operators,  owners,
lenders  and  investors.  Financial  solutions  provided  to  customers  include
operating leases,  sale/leasebacks,  aircraft purchasing and trading,  financing
leases,  engine/spare  parts  financing,  pilot  training,  fleet  planning  and
financial advisory services.

GECAS owns approximately 1,000 aircraft and manages  approximately 300 on behalf
of third parties. In addition,  it has planes on order or on option from Boeing,
Airbus, Dornier, Embraer and Bombardier. GECAS has over 200 customers in over 60
countries.

GECAS  operates in a highly  competitive  area serving a cyclical  industry that
could further  consolidate if airlines generally continue to weaken financially.
The impact of the events of September 11 has hastened and deepened a downturn in
the  aviation  industry  served by GECAS.  The  business can also be affected by
regulatory  changes that may impact aircraft values.  Regulations  under current
consideration,  if enacted,  that reduce  permissible  noise levels emitted from
commercial aircraft would have an effect on aircraft values.

GECAS  headquarters  are in  Stamford,  Connecticut,  with  regional  offices in
Shannon,  Republic of Ireland;  New York,  New York;  Miami,  Florida;  Chicago,
Illinois; Vienna, Austria; Toulouse, France; Luxembourg;  Beijing and Hong Kong,
China; Tokyo, Japan; and Singapore.

Fleet Services

GE Capital  Fleet  Services  ("Fleet")  is one of the  leading  corporate  fleet
management companies with operations in North America,  Europe,  Australia,  New
Zealand and Japan and has  approximately 1.2 million cars and trucks under lease
and service  management.  Fleet offers  finance and operating  leases to several
thousand customers. The business via Web applications and other unique channels,
delivers  productivity  solutions that drive commercial  vehicle cost savings to
company fleets of all sizes.

The primary  product in North  America is a terminal  rental  adjustment  clause
lease through which the customer  assumes the residual risk - that is, risk that
the book  value will be  greater  than  market  value at lease  termination.  In
Europe,  the  primary  product  is a  closed-end  lease in which  Fleet  assumes
residual risk. In addition to the services  directly  associated with the lease,
Fleet offers value-added fleet management services designed to reduce customers'
total fleet management costs.  These services include,  among others,  web-based
vehicle  ordering  and  reporting,  maintenance  management  programs,  accident
services,  national  account  purchasing  programs,  fuel  programs,  title  and
licensing services and strategic cost analysis consulting. Fleet's customer base
is diversified  with respect to industry and geography and includes many Fortune
500 companies.

Fleet competes both on a local and global basis with other leasing businesses of
various  sizes as well as automobile  manufacturers  in some parts of the world.
The  industry  is  dependent  upon  the  attractiveness  of  leasing  and  fleet
management as a viable  alternative  for customers,  along with the stability of
new and used car prices. Future success will depend upon the ability to maintain
a large and diverse customer  portfolio,  to estimate used car prices as well as
mitigate  the  impact  of  fluctuations  in those  prices,  and to  continue  to
understand and deliver unique product and service  offerings to the customers in
the most efficient and cost effective manner possible.

Fleet headquarters are in Eden Prairie, Minnesota.

Information Technology Solutions

GE Capital Information  Technology Solutions ("IT Solutions") is a provider of a
broad array of information technology products and services, including full life
cycle services that provide customers with cost-effective control and management
of  their  information  systems.   Products  offered  include  desktop  personal
computers,  client server  systems,  UNIX  systems,  local and wide area network
hardware,  and  software.  Services  offered  include  network  design,  network
support, asset management,  help desk, disaster recovery,  enterprise management
and  financial  services.  IT  Solutions  serves  commercial,   educational  and
governmental  customers  in 13  countries.  During 2001,  IT  Solutions  exited,
including  through sales of portions of business units, its operations in France
and the United Kingdom.


<PAGE>
                                       6



The worldwide  competition  in information  technology  products and services is
intense.  Competition is very active in all products and services and comes from
a number of principal  manufacturers  and other  distributors  and  resellers of
information  technology  products.  Markets for products and services are highly
price   competitive.   Additionally,   many   information   technology   product
manufacturers  are bypassing  traditional  information  technology  resellers in
favor of direct manufacturer relationships with the ultimate end-users.

IT Solutions' North American headquarters are in Newport, Kentucky; its European
headquarters are in Munich, Germany.

Transport International Pool/Modular Space

In April, 1999,  Transport  International Pool and GE Capital Modular Space were
consolidated to generate cost savings and management synergies.  This merger has
resulted in the elimination of duplicate  support  functions and the integration
of back offices.

Transport  International  Pool ("TIP") is one of the global  leaders in renting,
leasing, selling and financing transportation equipment. With more than 40 years
of experience in the renting,  leasing and selling of trailers, TIP's mission is
to  provide  customers  with  products  and  services  that help  them  increase
productivity and lower operating costs. TIP's fleet of over 390,000 dry freight,
refrigerated  and double vans,  flatbeds,  intermodal  assets,  and  specialized
trailers is available  for rent,  lease or purchase at over 200 locations in the
United States,  Europe,  Canada,  and Mexico.  TIP's commercial vehicle fleet of
over  35,000  units is  available  for rent,  lease,  or  purchase in the United
Kingdom.  TIP also finances new and used trailers and buys trailer fleets. TIP's
customer  base  comprises  trucking   companies,   railroads,   shipping  lines,
manufacturers and retailers.

TIP's competitive environment is made up of a few large national competitors and
many smaller, often changing regional players. TIP is a major participant in the
transportation renting,  leasing,  selling and financing market. The industry is
characterized  by  thin  operating   margins  and  continued   consolidation  of
companies,  with their  volume  driven by the gross  domestic  product and their
costs  affected  by  fuel  prices  and  driver  labor.  The  ability  to  remain
competitive will require the continued expansion of value-added  services around
the core business of renting, leasing and financing transportation equipment.

GE Capital  Modular  Space  ("Modular  Space")  provides  commercial  mobile and
modular  structures  for rental,  lease and sale from over 100 facilities in the
United  States,  Europe,  Canada and Mexico.  The  buildings  are provided  with
flexible customized financing, turnkey services and dedicated local sales staff.
The  primary  markets  served  include  construction,   education,   healthcare,
financial, commercial,  institutional and government. Modular Space products are
available  as  custom  mobile  and  modular  buildings,   designed  to  customer
specifications,  or are  available  through  the  Modular  Space  stock fleet of
approximately 120,000 mobile and modular units.

Competition  consists primarily of national modular companies and regional/local
competitors  who provide  services in selected  territories.  Modular Space also
competes  with  construction  companies  on permanent  structure  opportunities.
Competitive factors for rental and lease customers include price,  condition and
availability  of local fleet.  Factors for custom and fleet sales  opportunities
include price, alternative solutions, and delivery.

TIP/Modular  Space  have  offices  in  North  America  and  Europe.   The  world
headquarters for TIP/Modular Space are in Devon, Pennsylvania. TIP/Modular Space
European headquarters and pooled accounting service center are in Amsterdam, The
Netherlands,  and a commercial  vehicle operation and  administrative  center is
located in Manchester, England.

GE SeaCo

GE SeaCo  SRL  ("GE  SeaCo")  is a joint  venture  between  GE  Capital  and Sea
Containers  Ltd., which operates the combined marine container fleets of Genstar
Container Corporation ("Genstar") and Sea Containers Ltd. GE SeaCo is one of the
world's largest  lessors of marine shipping  containers with a combined fleet of
over  900,000  twenty  foot  equivalent  units of dry  cargo,  refrigerated  and
specialized  containers  for  global  cargo  transport.  Lessees  are  primarily
shipping lines that lease on a long term or master lease basis.

The marine container leasing industry continues to be cyclical due to periods of
excess  capacity and changes in trade volumes.  Further risk is  attributable to
the lessees,  which are the major  steamship  lines and which  exhibit  cyclical
results and generally  weak financial  condition,  exposing GE SeaCo to customer
credit  risk.  GE SeaCo is subject to asset  value  compression  resulting  from
declining new container  prices and positioning risk attributed to the increased
use of one-way leases.

GE SeaCo headquarters are in Bridgetown, Barbados.


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                                       7


Penske Truck Leasing

GE Capital is a limited  partner in Penske  Truck  Leasing Co. L.P.  ("Penske"),
which is a leading  provider of  full-service  truck leasing and  commercial and
consumer truck rental in the United States and Canada. Penske operates through a
national  network  of  full-service  truck  leasing  and rental  facilities.  At
December  31, 2001,  Penske had a fleet of about  145,000  tractors,  trucks and
trailers in its  leasing and rental  fleets and  provided  contract  maintenance
programs or other support services for about 50,000 additional vehicles.

Penske also provides  dedicated  logistics  operations  support  which  combines
company-employed  drivers  with  its  full-service  lease  vehicles  to  provide
dedicated  contract carriage services.  In addition,  Penske offers supply chain
services such as distribution  consulting,  warehouse management and information
systems support.

In  February  2001,  Penske  acquired  Rollins  Truck  Leasing  Corporation  for
approximately  $2  billion  in cash and  assumed  debt.  Rollins  Truck  Leasing
Corporation  was one of the  largest  national  full-service  truck  leasing and
rental companies, with locations in the United States and Canada.

Penske competes with several other companies conducting nationwide truck leasing
and rental operations, a large number of regional truck leasing companies,  many
similar  companies  operating  primarily  on a local  basis  and both  local and
nationwide common and contract carriers.

On a nationwide basis, Penske offers full-service truck leasing,  commercial and
consumer  rental and logistics  services.  In its leasing and support  services,
Penske competes primarily on the basis of customer service. Geographic location,
price and equipment  availability are also important competitive factors in this
business.  In its consumer rental  operations,  Penske competes primarily on the
basis  of  equipment  availability,  price,  geographic  location  and  customer
service.

Penske headquarters are in Reading, Pennsylvania.

GE American Communications

GE American Communications ("Americom") engaged primarily as a satellite service
supplier to a diverse array of  customers,  including the broadcast and cable TV
industries,   as  well  as  broadcast   radio.   It  also  supplied   integrated
communications  services for government and commercial customers.  Americom also
operated communications  satellites and maintained a supporting network of earth
stations,  central  terminal  offices,  and  telemetry,   tracking  and  control
facilities.

On November 9, 2001,  GECS  exchanged  the stock of Americom  and other  related
assets  and  liabilities  for a  combination  of cash and  stock  in SES  Global
("SES"), a leading satellite company. As a result of the transaction, GE Capital
now  owns  30.7% of the  combined  operations  of both  Americom  and  SES.  The
investment in the combined entity is now part of the Structured Finance Group.

Americom headquarters were in Princeton, New Jersey.

Rail Services

GE Capital  Rail  Services  ("GERSCO")  is one of the  leading  railcar  leasing
companies  in North  America,  with a fleet of  190,000  railcars  in its  total
portfolio.  Serving Class 1 and  short-line  railroads  and shippers  throughout
North America,  GERSCO offers one of the most diverse fleets in the industry and
a variety of lease options.

GERSCO  also owns and  operates  a network of  railcar  repair  and  maintenance
facilities  located  throughout  North America.  The repair  facilities  offer a
variety of services,  ranging from light  maintenance to heavy repair of damaged
railcars. The company also provides railcar management, administration and other
services.

In  addition,  GERSCO is a  pan-European  provider of rail  transport  services,
offering  a broad  range of  railcar  equipment  and  rail-related  services  to
railroads, shippers and other transport providers.

Traditional  competitors  include railroads,  stand-alone  leasing companies and
other owners of railcar fleets, diversified financial institutions,  and railcar
builders.  Customers who lease railcars also have the choice of purchasing them,
either  outright  or through a  financial  sale.  Certain  segments of the North
American  railcar leasing  industry  continue to be affected by an oversupply of
cars.  Ongoing  technology changes in car design and capacity are also impacting
car supply. In Europe,  liberalization  and privatization of national  railroads
continue  to  significantly  impact  the rail  industry.  In  addition,  on both
continents,  changes in supply and demand for  commodities  shipped by rail also
impact the demand for cars.  In that  regard,  the trucking  industries  on both
continents  continue  to make  inroads  into  traditional  haulage by rail.  The

<PAGE>
                                       8

interaction  and timing of these forces  across the portfolio of cars can impact
the profitability of GERSCO.  The ability to remain competitive will require the
commitment to constant  productivity  gains and  improvement  in its breadth and
quality  of  service  through  the  implementation  of  technology  and  process
improvements.

European sales offices are in England, France, Germany, Italy and Sweden. GERSCO
headquarters are in Chicago, Illinois.

MID-MARKET FINANCING

Commercial Equipment Financing

GE  Capital  Commercial  Equipment  Financing  ("CEF")  offers  large  and small
companies with a broad line of innovative  financial  solutions including leases
and loans to middle-market  customers,  including  manufacturers,  distributors,
dealers and end-users,  as well as municipal financing and facilities financing,
in such areas as construction equipment,  corporate aircraft, medical equipment,
trucks and trailers.  It also furnishes customers with direct-source  tax-exempt
finance programs,  as well as lease and sale/leaseback  offerings.  Products are
either held for CEF's own account or brokered to third parties.

Generally,  transactions  range in size from $50 thousand to $50  million,  with
financing  terms from 36 to 180 months.  CEF also maintains an asset  management
operation that redeploys off-lease and repossessed equipment and other assets.

The global equipment  financing  industry  continues to be highly fragmented and
intensely  competitive.  Competitors  in the  U.S.  domestic  and  international
markets  include  independent  financing  companies,  financing  subsidiaries of
equipment  manufacturers,  and banks (national,  regional, and local).  Industry
participants  compete not only on the basis of monthly payments,  interest rates
and fees charged  customers but also on deal  structures  and credit terms.  The
profitability  of CEF is affected  not only by broad  economic  conditions  that
impact customer  credit quality and the  availability  and cost of capital,  but
also by  successful  management of credit risk,  operating  risk and such market
risks  as  interest  rate and  currency  exchange  risk.  Important  factors  to
continued success include  maintaining strong risk management  systems,  diverse
portfolios,  service and  distribution  channels,  strong  collateral  and asset
management  knowledge,  deal  structuring  expertise  and the reduction of costs
through enhanced use of technology.

During 2001, CEF purchased the stock of Franchise Finance Corporation of America
and certain assets and liabilities from Mellon Financial  Corporation and SAFECO
Corporation. The purchase price for these acquisitions amounted to approximately
$4.4 billion.

CEF operates from offices  throughout the Americas,  Europe,  Asia and Australia
and through  joint  ventures in Indonesia  and China.  CEF  headquarters  are in
Danbury, Connecticut.

Commercial Finance

GE Capital  Commercial Finance ("CF") is a leading global provider of innovative
financing, primarily revolving and term debt and equity to finance acquisitions,
business  expansion,  bank  refinancings,  recapitalizations  and other  special
situations.  Products  also include  asset  securitization  facilities,  capital
expenditure  lines  and  bankruptcy-related  facilities,  as well  as  factoring
services.  Loan  transactions  range in size from under $10 million to over $200
million.

CF's  clients  are  owners,  managers  and  buyers of both  public  and  private
companies,  principally manufacturers,  distributors,  retailers and diversified
service  providers,  and CF has industry  specialists  in the retail,  media and
communications,  and high technology  industries.  Through its Merchant  Banking
Group, CF provides senior debt, subordinated debt and bridge financing to buyout
and private equity firms, and co-invests in equity with buying groups or invests
directly on a select basis.

The corporate  financing business is characterized by intense competition from a
variety of lenders and factoring services providers,  including local, regional,
national  and   international   banks  and  non-bank   financing   institutions.
Competition is based on interest  rates,  fees,  credit terms,  and  transaction
structures. In addition to these factors,  successful management of credit risks
within  the  existing  customer  loan  portfolio  also  affects   profitability.
Important  factors to continued  success include  maintaining  deal  structuring
expertise, strong risk management systems, and collateral management knowledge.

CF headquarters are in Stamford,  Connecticut.  CF has lending  operations in 25
cities,  including  international offices in Canada,  Mexico,  Thailand,  Korea,
Australia,  The  Netherlands,  and the United Kingdom,  and also has significant
factoring  operations in the U.S.,  France, the United Kingdom and Italy serving
U.S. and European companies.

Vendor Financial Services

GE Capital Vendor Financial  Services ("VFS") provides  financial  solutions and
services   to  over   100   equipment   manufacturers   and  more   than   4,500
dealers/distributors  in  North  America,  Europe  and Asia  (including  Japan),
<PAGE>
                                       9


enabling them to offer  financing  options to their  customers.  With nearly $20
billion in served assets,  VFS helps its partners focus on their core businesses
and improve  sales by  providing  flexible  financial  solutions  and  services.
Customers  include  major  U.S.  and  non-U.S.  manufacturers  in a  variety  of
industries  including  information  technology,  office  equipment,  healthcare,
telecommunications,  energy and  industrial  equipment.  VFS  establishes  sales
financing in two ways - by forming captive  partnerships with manufacturers that
do not have them, and by outsourcing  captive  partnerships  from  manufacturers
that do (captive  partnerships  provide sales financing solely for products of a
given  manufacturer).  VFS  offers  industry-specific  knowledge,  leading  edge
technology,  leasing  and  equipment  expertise,  and  global  capabilities.  In
addition,  VFS  provides an  expanding  array of related  financial  services to
customers, including trade payables services.

In June 2001, VFS acquired the Manufacturer  and Dealer Services  business (MDS)
of Mellon  Leasing  for  approximately  $480  million.  MDS  provides  financial
services for office equipment and industrial equipment manufacturers.

In September  2001, VFS signed a framework  agreement with Xerox to form a Joint
Venture, Xerox Capital Services. Through this joint venture, VFS will become the
primary financing provider for Xerox customers across the United States.

An economic  slowdown  would impact the  continued  expansion  of the  equipment
financing  industry,  intensifying a competitive pricing  environment,  pressure
delinquencies and residual  realizations,  and pressure any recourse obligations
from vendor  relationships.  The ability to remain competitive will depend upon,
among  other  things,  the ability to drive down costs  through the  significant
investment  in   productivity   initiatives  and  the  ability  to  continue  to
effectively  manage  its  spread  of  risk in  industry  sectors  and  equipment
categories in conjunction with vendor partners.

VFS has sales  offices  throughout  the  United  States,  Canada,  Europe,  Asia
(including Japan), and Australia. VFS headquarters are in Danbury, Connecticut.

GE European Equipment Finance

GE European  Equipment  Finance ("EEF") is one of Europe's  leading  diversified
equipment leasing  businesses,  offering financial solutions on a single-country
and pan-European basis. Customers include  manufacturers,  vendors and end-users
in industries such as office imaging,  materials  handling,  corporate aircraft,
information  technology,  broadcasting,  machine tools,  telecommunications  and
transportation.  Products  and  services  include  loans,  leases,  master lease
coordination and other services,  such as helping end-users increase  purchasing
power through financing  options and helping  manufacturers and vendors to offer
leasing programs. For financial reporting purposes,  EEF's operating results are
allocated to CEF and VFS.

EEF is subject to  competition  from various  types of  financial  institutions,
including  leasing  companies,  commercial  and  investment  banks,  and finance
companies associated with manufacturers. Consolidation in the financial services
industry will create fewer but larger competitors.  EEF continues to be impacted
by  pricing  pressures,  slow  growth in some of its  markets,  and is  directly
affected  by the general  economic  conditions  within  country  economies.  Its
ability to effectively compete in a changing environment will be dependent upon,
among other things,  its ability to increase  productivity  and offer innovative
financial  products and services.  Operations are subject to varying  degrees of
regulation in several jurisdictions across the European continent.

EEF operates from offices in the United Kingdom,  France, Germany,  Switzerland,
Belgium, The Netherlands,  Ireland,  Italy, Spain, Norway,  Denmark,  Sweden and
Finland,  as  well as  having  transaction  capabilities  in  countries  such as
Portugal. EEF headquarters are in Hounslow, England.

Heller Financial

In October 2001,  the  Corporation  acquired  Heller  Financial,  Inc.  ("Heller
Financial")  for  approximately   $5.3  billion.   At  December  31,  2001,  the
Corporation  reported  Heller  Financial  as a  stand-alone  entity  within  the
Mid-Market  Financing  segment  due  to the  proximity  of  the  acquisition  to
year-end. During 2002, the Corporation will report Heller Financial's operations
with  those of the  Corporation's  businesses  with  which  they were  combined,
primarily  Commercial  Finance,  VFS and CEF. In addition,  one of the strongest
Heller  Financial / GE Capital  synergies  was  achieved  when their  healthcare
businesses were combined to create a new business to meet the financial needs of
the dynamic healthcare industry,  Healthcare Financial Services. Overall, Heller
Financial  provides  financing  solutions to  middle-market  and small  business
clients including collateralized cash flow and asset based lending, secured real
estate  financing,  debt and lease  equipment  financing  and  small  businesses
financing.

Heller  Financial  originates  transactions  in the United States through its 62
domestic office locations and internationally  through a network of wholly owned
subsidiaries  and joint  venture  commercial  finance  companies in 22 countries
outside the United States.  Heller  Financial  concentrates  primarily on senior

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                                       10


secured  lending,  with  approximately  90% of  consolidated  lending assets and
investments  at December 31, 2001 being made on that basis.  Heller  Financial's
primary  clients and  customers  are entities in the  manufacturing  and service
sectors having annual sales generally in the range of $5 million to $250 million
and in the real estate sector having property  values  generally in the range of
$1 million to $40 million.

Heller Financial's  markets are highly fragmented and extremely  competitive and
are  characterized  by  competitive  factors that vary by product and geographic
region.  Heller  Financial's  competitors  include commercial finance companies,
national and regional banks and thrift  institutions,  investment banks, leasing
companies, investment companies, and manufacturers and vendors. Heller Financial
competes primarily on the basis of pricing, terms, structure and service.

Heller Financial's 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,  regulate
credit  granting  activities,  establish  maximum  interest  rates  and  finance
charges,  restrict foreign ownership or investment,  govern secured transactions
and set collection, foreclosure, repossession and claims handling procedures.

Heller Financial headquarters are in Chicago, Illinois.

SPECIALIZED FINANCING

Real Estate

GE Capital  Real Estate  ("Real  Estate")  provides  funds for the  acquisition,
refinancing  and renovation of a wide range of apartment  buildings,  industrial
properties,   multi-family  housing,   retail  facilities  and  offices  located
throughout the United States,  Canada, Mexico, Europe and Asia. Real Estate also
provides  asset  management  services  to real  estate  investors  and  selected
services  to real  estate  owners.  Real  Estate is one of the  world's  leading
providers of capital and services to the global  commercial  real estate market,
providing  debt and  equity for real  estate  operators,  developers,  REITs and
opportunity  funds to allow  them to meet  their  acquisition,  refinancing  and
renovation needs.

Lending  is  a  major  portion  of  Real  Estate's   business  in  the  form  of
intermediate-term  senior or subordinated fixed and floating-rate  loans secured
by existing  income-producing  commercial  properties such as office  buildings,
rental apartments,  shopping centers,  industrial buildings,  mobile home parks,
hotels and  warehouses.  Loans  range in amount from  single-property  mortgages
typically  not less than $5  million  to  multi-property  portfolios  of several
hundred million dollars. Approximately 90% of all loans are senior mortgages.

Real Estate  purchases and provides  restructuring  financing for  portfolios of
real estate,  mortgage loans, limited  partnerships,  and tax-exempt bonds. Real
Estate's  business  also  includes the  origination  and  securitization  of low
leverage  real estate  loans,  which are  intended to be held less than one year
before outplacement.  Additionally, Real Estate provides equity capital for real
estate  partnerships  through the holding of limited  partnership  interests and
receives preferred returns;  typically such investments range from $2 million to
$10 million.

Real  Estate  also  offers a variety  of asset  management  services  to outside
investors, institutions,  corporations, investment banks, and others through its
real  estate  services   subsidiaries.   Asset   management   services   include
acquisitions and dispositions,  strategic asset management, asset restructuring,
and debt and equity  management.  In  addition,  Real  Estate  offers  owners of
multi-family  housing ways to reduce costs and enhance  value in  properties  by
offering buying services (e.g., for appliances and roofing).

Competition  is intense in each of Real  Estate's  areas and across all  product
lines.  Competitors include local,  regional and,  increasingly,  multi-national
lenders and investors.  Important  competitive  factors in Real Estate's lending
activities  include  financing  rates,  loan  proceeds,  loan  structure and the
ability to complete  transactions  quickly.  Where Real Estate  provides  equity
capital,  principal  competitive  factors  include the  valuation of  underlying
properties and investment structure as well as transaction cycle time.

Real  Estate has offices  throughout  the United  States,  as well as in Canada,
Mexico,  Australia,  Japan, Sweden, France, Spain, Germany, Italy and the United
Kingdom. Real Estate headquarters are in Stamford, Connecticut.

Structured Finance Group

GE Capital  Structured  Finance  Group  ("SFG")  provides  innovative  financial
solutions through equity, debt and structured  investments to clients throughout
the world.  SFG's  clients  are  primarily  in the  energy,  telecommunications,
industrial and  transportation  sectors and range from household  names to early
stage businesses.


<PAGE>
                                       11


SFG  combines  industry  and  technical  expertise  to  deliver a full  range of
sophisticated  financial  services  and  products.  Services  include  corporate
finance,  acquisition  finance  and  project  finance  (construction  and term).
Products include a variety of debt and equity instruments, as well as structured
transactions,  including  leases and  partnerships.  SFG  manages an  investment
portfolio of approximately $17 billion.

SFG's   competition  is  diverse  and  global,   ranging  from  large  financial
institutions to small niche capital providers. Additionally, two of SFG's client
industry segments,  telecommunications  and energy, are faced with extraordinary
challenges  fostered by deregulation,  globalization  and technical  innovation.
Both of these industries have been recently experiencing  significant volatility
in demand for their  products and  services.  The ability to remain  competitive
will require innovative and unique ways of providing capital,  based on industry
knowledge and  competitive  pricing,  as well as the ability to properly  assess
credit risks and effectively manage portfolios.

SFG  headquarters are in Stamford,  Connecticut,  and it has offices in Chicago,
Illinois;  Houston,  Texas;  New York, New York; and San Francisco,  California.
Internationally,  SFG is  represented  in  London,  United  Kingdom;  Frankfurt,
Germany; Milan, Italy; Tokyo, Japan; and Mexico City, Mexico.

GE Equity

GE Equity purchases  equity  investments in early-stage,  early growth,  pre-IPO
companies  with a  primary  objective  of  long-term  capital  appreciation.  GE
Equity's  portfolio  consists  primarily of direct  investments  in  convertible
preferred and common stocks in both public and private companies; GE Equity also
participates in certain investment limited partnerships.  The portfolio includes
investments  in the  technology  and  communications,  media and  entertainment,
business services,  financial services and healthcare sectors.  The portfolio is
geographically  diversified  with  investments  located  throughout  the  United
States, as well as in Latin America, Europe and Asia.

GE Equity operates in a highly  competitive  environment and competes with other
domestic and foreign  institutions.  Competitors  include  corporate  investors,
private  equity  firms,  investment  banking  companies,  and a variety of other
financial services and advisory companies. GE Equity seeks to develop meaningful
business  relationships  with  investees  by  offering  GE's  network of brands,
services  and  management  expertise.  GE Equity's  competitive  environment  is
subject to the cyclical  nature of the  industries it invests in, as well as the
momentum in the stock market.

GE Equity headquarters are in Stamford, Connecticut.

SPECIALTY INSURANCE

In addition to GE Global Insurance Holdings  (discussed above),  GECS' principal
specialty insurance businesses are as follows.

Financial Guaranty Insurance Company

FGIC Holdings  ("FGIC"),  through its subsidiary,  Financial  Guaranty Insurance
Company ("Financial Guaranty"),  is an insurer of municipal bonds, including new
issues,  bonds traded in the secondary  market and bonds held in unit investment
trusts and mutual funds.  Financial  Guaranty also  guarantees  certain  taxable
structured debt. The in force guaranteed principal, after reinsurance,  amounted
to  approximately  $174 billion at December 31, 2001.  Approximately  84% of the
business written by Financial Guaranty is municipal bond insurance.

FGIC  subsidiaries  provide a variety of services to state and local governments
and agencies,  liquidity  facilities in  variable-rate  transactions,  municipal
investment products and other services.

The  municipal  bond  insurance  business  is fairly  mature.  This  environment
requires FGIC to place increasing  emphasis on strategies that differentiate its
offerings.  Additionally, the stable nature of the industry continues to attract
interest from potential new competitors, such as multi-line insurance companies.
Important   factors   to   continued   success   include    maintaining   strong
capitalization, superior customer service and competitive pricing.

FGIC headquarters are in New York, New York.

Mortgage Insurance

GE Capital  Mortgage  Insurance  ("Mortgage  Insurance")  helps families  become
homeowners  by  smoothing  the  way for  customers  to  obtain  low-down-payment
mortgages while protecting  lenders and investors  against the risks of default.
It  enables   more  than  a  quarter   million   families  per  year  to  obtain
low-down-payment  mortgages  and  now has a  no-down-payment  product  as  well.
Mortgage  Insurance is engaged  principally  in providing  residential  mortgage
guaranty insurance in the United States,  United Kingdom,  Canada and Australia.
At December 31, 2001,  Mortgage Insurance was the mortgage insurance carrier for
over 1.9 million  residential  homes,  with total insurance in force aggregating
approximately $184 billion and total risk in force aggregating approximately $80
billion. When a valid claim is received,  Mortgage Insurance either pays up to a

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                                       12


guaranteed  percentage based on the specified coverage, or pays the mortgage and
delinquent interest, taking title to the property and arranging for its sale.

The mortgage  insurance  industry is sensitive to the interest rate  environment
and housing  market  conditions.  The mortgage  insurance  industry is intensely
competitive  as  excess  market  capacity  seeks to  underwrite  business  being
generated  from  a  consolidating  customer  base.  In  addition,   considerable
influence  is exerted on the industry by two  government-sponsored  enterprises,
which buy the majority of the loans insured by mortgage insurers.

Mortgage Insurance headquarters are in Raleigh, North Carolina.

OTHER

Wards

All other  consists  primarily of Montgomery  Ward, LLC ("Wards") from August 2,
1999,  when GECS  acquired  control  of the  retailer  upon its  emergence  from
bankruptcy  reorganization,  to December  28,  2000,  when Wards again filed for
bankruptcy protection. The retailer is substantially liquidated.

REGULATIONS AND COMPETITION

The  Corporation's  activities  are  subject to a variety  of federal  and state
regulations including, at the federal level, the Consumer Credit Protection Act,
the Equal Credit  Opportunity Act and certain  regulations issued by the Federal
Trade  Commission.  A majority of states have  ceilings on rates  chargeable  to
customers in retail time sales  transactions,  installment  loans and  revolving
credit financing. Insurance and reinsurance operations are subject to regulation
by various state insurance  commissions or foreign  regulatory  authorities,  as
applicable. The Corporation's international operations are subject to regulation
in their respective jurisdictions. To date, compliance with such regulations has
not had a material  adverse effect on the  Corporation's  financial  position or
results of operations.

The  businesses in which the  Corporation  engages are highly  competitive.  The
Corporation  is  subject  to   competition   from  various  types  of  financial
institutions, including banks, thrifts, investment banks, broker-dealers, credit
unions,  leasing  companies,   consumer  loan  companies,   independent  finance
companies,  finance  companies  associated with  manufacturers and insurance and
reinsurance companies.

BUSINESS AND ECONOMIC CONDITIONS

The  Corporation's  businesses  are generally  affected by general  business and
economic  conditions in countries in which the  Corporation  conducts  business.
When overall economic conditions deteriorate in those countries, there generally
are adverse effects on the Corporation's 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 the  Corporation  may
actually increase.  Interest rates, another macro-economic factor, are important
to the Corporation's businesses.  In the lending and leasing businesses,  higher
real interest rates increase the  Corporation's  cost to borrow funds,  but also
provide  higher  levels  of  return on new  investments.  For the  Corporation's
operations  that  are  less  directly  linked  to  interest  rates,  such as the
insurance  operations,  rate  changes  generally  affect  returns on  investment
portfolios.

FORWARD LOOKING STATEMENTS

This document includes certain  "forward-looking  statements" within the meaning
of the Private  Securities  Litigation  Reform Act of 1995. These statements are
based on management's  current  expectations  and are subject to uncertainty and
changes  in  circumstances.  Actual  results  may differ  materially  from these
expectations   due  to  changes  in  global   political,   economic,   business,
competitive, market and regulatory factors.

Item 2.  Properties.

GE Capital Services and its  subsidiaries  conduct their businesses from various
facilities, most of which are leased. The locations of the Corporation's primary
facilities are described in Item 1. Business.

Item 3.  Legal Proceedings.

The Corporation is not involved in any material pending legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders.

                                     Omitted
<PAGE>
                                       13




                                     PART II

Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
         Matters.

See note 13 to the consolidated  financial  statements.  The common stock of the
Corporation  is owned  entirely by GE Company and an affiliate  and,  therefore,
there is no trading market in such stock.

Item 6.  Selected Financial Data.

The following  selected  financial data should be read in  conjunction  with the
financial statements of GE Capital Services and consolidated  affiliates and the
related Notes to Consolidated Financial Statements.
<TABLE>
<CAPTION>

                                                                  Year ended December 31
                                            ----------------------------------------------------------------------
 (In millions)                                  2001           2000          1999          1998          1997
                                            ----------------------------------------------------------------------
<S>                                         <C>           <C>            <C>            <C>          <C>
 Revenues ..................................$    58,353   $    66,177    $   55,749     $   48,694   $    39,931

 Earnings before accounting changes.........      5,586         5,192         4,443          3,796         3,256
 Cumulative effect of accounting changes....       (169)            -             -              -             -

 Net earnings...............................      5,417         5,192         4,443          3,796         3,256


 Return on common equity (a) ...............      21.84%        24.05%        23.74%         23.46%        22.59%
 Ratio of earnings to fixed charges ........       1.62          1.61          1.62           1.55          1.56
 GECC ratio of earnings to fixed charges ...       1.72          1.52          1.60           1.50          1.48
 GECC ratio of debt to equity ..............       7.31          7.53          8.44           7.86          7.45

 Financing receivables - net ...............$   174,032   $   143,299   $   134,215    $   118,606   $   101,133

 Total assets...............................    425,484       370,636       345,018        303,297       255,408

 Short-term borrowings .....................    160,844       123,992       129,259        113,162        95,274
 Long-term senior notes ....................     77,920        80,383        69,770         58,042        44,993
 Long-term subordinated notes ..............      1,171           996           996            996           996
 Minority interest .........................      4,267         3,968         4,391          3,459         3,113
 Share owners' equity ......................     28,590        23,022        20,321         19,727        17,239

 Insurance premiums written for the year ...     15,843        16,461        13,624         11,865         9,396
                                            ----------------------------------------------------------------------
</TABLE>

(a)  Common equity excludes unrealized gains and losses on investment securities
     and derivatives  qualifying as hedges,  net of tax. Return on common equity
     is calculated using earnings that are adjusted for preferred stock dividend
     and common equity excludes preferred stock.

Item 7.  Management's Discussion and Analysis of Results of Operations.

Overview

The  Corporation's  earnings  before  accounting  changes were $5,586 million in
2001,  up 8% from  $5,192  million in 2000,  with strong  double-digit  earnings
growth in three of the five operating  segments.  Net earnings in 2000 increased
17% from 1999.  Earnings growth  throughout the three-year  period resulted from
origination volume and asset growth, productivity and acquisitions of businesses
and portfolios.  Principal factors in the 2001 increase were strong productivity
($0.7  billion)  and lower taxes ($0.5  billion)  partially  offset by GE Global
Insurance  Holdings  ($0.5  billion)  and  lower  realized  gains  on  financial
instruments. Excluding effects of Paine Webber Group, Inc. (PaineWebber) in 2000
and Americom in 2001, both of which are discussed below, such pre-tax gains were
lower in 2001 by $0.5 billion ($0.3  billion after tax).  Pre-tax gains on sales
of investment securities declined in 2001 by $0.5 billion, of which $0.4 billion
related to GE Equity; other GE Equity gains were $0.8 billion lower; while gains
on securitizations were up $0.8 billion from 2000.

On November 9, 2001,  GECS  exchanged  the stock of Americom  and other  related
assets and  liabilities  for a  combination  of cash and stock in SES Global,  a
leading satellite company.  The transaction resulted in a gain of $1,158 million
($642 million after tax).

On December 28, 2000, Montgomery Ward, LLC (Wards),  formerly a GECS subsidiary,
filed for bankruptcy protection and began liquidation proceedings.  Net earnings
for the year 2000 included operating losses from Wards amounting to $245 million
as well as a charge,  primarily  to other costs and  expenses,  for $815 million
($537 million after tax) to recognize additional associated losses.


<PAGE>
                                       14


Operating Results

Total Revenues decreased 12% to $58.4 billion in 2001,  following a 19% increase
to $66.2  billion in 2000.  The three  principal  reasons  for the  decrease  in
revenues  in 2001  compared  with 2000 were:  the  deconsolidation  of Wards and
resulting   absence  of  sales  in  2001   ($3.2   billion);   the   effects  of
rationalization  of  operations  and market  conditions  at IT  Solutions  ($2.9
billion);   and  reduced  surrender  fees  compared  with  2000  ($1.2  billion)
associated with the planned run-off of restructured  insurance  policies of Toho
Mutual Life  Insurance  Company  (Toho) at GE Financial  Assurance  (GEFA).  The
increase in 2000 reflected  post-acquisition  revenues from acquired  businesses
($6.5  billion) as well as volume growth ($2.5  billion).  Revenues in 2000 also
included  the gain from  sale of common  stock of  PaineWebber  ($1.4  billion).
Additional  information about other revenue items is provided in the analysis of
GECS operating segments beginning on page 15.

Interest  expense on borrowings in 2001 was $10.6  billion,  compared with $11.1
billion in 2000 and $9.4 billion in 1999. The change in both years reflected the
effects of both  interest  rates and the  average  level of  borrowings  used to
finance asset growth. The average composite effective interest rate was 5.11% in
2001,  compared with 5.89% in 2000 and 5.14% in 1999. In 2001, average assets of
$386.6  billion were 7% higher than in 2000,  which in turn were 13% higher than
in 1999. See page 20 for a discussion of interest rate risk management.

Operating  and  administrative  expenses were $16.4  billion,  $19.5 billion and
$16.3 billion in 2001, 2000 and 1999, respectively.  Changes over the three-year
period were largely the result of acquisitions and unusual  charges,  which were
more than offset in 2001 by  productivity  at Consumer  Services  and  Equipment
Management.  Costs  and  expenses  in 2001  included  $0.4  billion  of costs in
businesses  that were acquired after January 1, 2001, as well as $0.3 billion of
costs discussed in the analysis of the All Other operating  segment.  Similarly,
2000  included  $2.3 billion of costs in  businesses  that were  acquired  after
January 1, 2000;  charges  for costs  associated  with Wards  amounting  to $0.8
billion,  as  discussed  previously;  and $0.5  billion of costs to  rationalize
certain operations discussed in the analysis of the All Other operating segment.

Insurance  losses and  policyholder  and  annuity  benefits  increased  to $15.1
billion in 2001,  compared with $14.4 billion in 2000 and $11.0 billion in 1999.
This  increase  reflected  effects  of growth in  premium  volume  and  business
acquisitions at GEFA throughout the period,  and costs discussed in the analysis
of the Specialty Insurance and All Other operating segments, partially offset by
the planned run-off of restructured insurance policies at Toho.

Cost of goods sold declined to $3.3 billion in 2001,  compared with $8.5 billion
in 2000 and $8.0 billion in 1999, reflecting volume declines at IT Solutions and
the  deconsolidation  of  Wards on  December  28,  2000,  when  Wards  commenced
liquidation   proceedings.   The  increase  in  2000  primarily   reflected  the
consolidation of Wards from August 2, 1999, through December 28, 2000.

Provision for losses on financing receivables was $2.5 billion in 2001, compared
with $2.0 billion in 2000 and $1.7 billion in 1999. These provisions principally
related to  private-label  credit cards,  bank credit cards,  personal loans and
auto loans and leases as well as commercial, industrial, and equipment loans and
leases,  all of which are  discussed  on page 18 under  Portfolio  Quality.  The
provisions  throughout the three-year period reflected higher average receivable
balances, changes in the mix of business, and the effects of delinquency rates -
higher during 2001 and lower during 2000 - consistent with industry experience.

Depreciation  and  amortization  of buildings  and  equipment  and  equipment on
operating  leases  increased  4% to $3.5  billion  in 2001,  compared  with $3.3
billion  in 2000,  a 4%  increase  over  1999.  The  increase  in both years was
primarily  the result of higher  levels of  short-lived  equipment  on operating
leases, primarily reflecting acquisitions of vehicles and aircraft.

Provision  for income taxes was $1.4 billion in 2001 (an  effective  tax rate of
19.8%),  compared with $1.9 billion in 2000 (an effective tax rate of 26.9%) and
$1.7 billion in 1999 (an  effective tax rate of 27.1%).  The 2001  effective tax
rate reflects the effects of continuing globalization, certain transactions (see
note 15), and the effect of a pre-tax  charge related to the events of September
11. The pre-tax  charge related to September 11 amounted to  approximately  $600
million,  principally  at  Specialty  Insurance,  and reduced the  Corporation's
effective tax rate by one percentage  point.  Management  expects that trends in
the   Corporation's   businesses,   particularly   the   continuing   impact  of
globalization, are likely to result in an effective tax rate for the Corporation
in 2002 that will be lower than the 2000 and 1999  rates,  but  higher  than the
2001 rate.

Financing  spreads - Over the last three years,  market interest rates have been
more volatile than GECS average composite effective interest rates,  principally
because of the mix of  effectively  fixed-rate  borrowings in the GECS financing
structure.  GECS  portfolio of fixed and  floating-rate  financial  products has
behaved  similarly  over  that  period.  Consequently,  financing  spreads  have
remained relatively flat over the three-year period.


<PAGE>
                                       15


Operating Segments

Revenues and earnings before accounting changes of the Corporation, by operating
segment,  for the past three years are summarized and discussed as follows.  For
additional information, see note 16 to the consolidated financial statements.

Consolidated

<TABLE>
<CAPTION>

    (In millions)                                             2001                  2000                  1999
                                                      -------------------    -------------------    ------------------
 <S>                                                   <C>                    <C>                    <C>
    Revenues
    Consumer Services.............................    $         23,574       $         23,893       $         18,705
    Equipment Management..........................              12,542                 14,747                 15,383
    Mid-Market Financing..........................               8,659                  7,026                  5,929
    Specialized Financing.........................               2,930                  4,105                  3,308
    Specialty Insurance...........................              11,064                 11,878                 10,643
    All other.....................................                (416)                 4,528                  1,781
                                                      -------------------    -------------------    ------------------
      Total revenues..............................    $         58,353       $         66,177       $         55,749
                                                      ===================    ===================    ==================
    Net earnings
    Consumer Services.............................    $          2,319       $          1,671       $          1,140
    Equipment Management..........................               1,607                    833                    683
    Mid-Market Financing..........................               1,280                  1,010                    822
    Specialized Financing.........................                 557                  1,223                  1,019
    Specialty Insurance...........................                 522                    879                  1,167
    All other.....................................                (699)                  (424)                  (388)
                                                      -------------------    -------------------    ------------------
    Total earnings before accounting changes......               5,586                  5,192                  4,443

    Cumulative effect of accounting changes.......                (169)                     -                      -
                                                      -------------------    -------------------    ------------------
      Net earnings................................    $          5,417       $          5,192       $          4,443
                                                      ===================    ===================    ==================
</TABLE>

Following is a discussion  of revenues and earnings  before  accounting  changes
from  operating  segments.  For  purposes of this  discussion,  earnings  before
accounting changes is referred to as net earnings.

Consumer Services

<TABLE>
<CAPTION>
    (In millions)                                            2001                  2000                  1999
                                                     -------------------    -------------------    ------------------
<S>                                                  <C>                    <C>                    <C>
    Revenues
    Global Consumer Finance......................    $           5,282      $           5,138      $           4,839
    GE Financial Assurance.......................               13,565                 13,669                  9,604
    GE Card Services.............................                3,947                  3,891                  2,478
    Other Consumer Services......................                  780                  1,195                  1,784
                                                     -------------------    -------------------    ------------------
      Total revenues.............................    $          23,574      $          23,893      $          18,705
                                                     ===================    ===================    ==================
    Net earnings (a)
    Global Consumer Finance......................    $             903      $             710      $             580
    GE Financial Assurance.......................                  687                    564                    411
    GE Card Services.............................                  654                    495                    196
    Other Consumer Services......................                   75                    (98)                   (47)
                                                     -------------------    -------------------    ------------------
      Net earnings...............................    $           2,319      $           1,671      $           1,140
                                                     ===================    ===================    ==================
</TABLE>
     (a)  Charges  of  $196   million  and  $107   million  in  2001  and  2000,
          respectively,  were not  allocated to this segment and are included in
          the All Other operating segment.

Consumer  Services  revenues  declined 1% in 2001,  following a 28%  increase in
2000.   Overall,   the  revenue   performance   in  both  years   reflected  the
post-acquisition  revenues from acquired  businesses  and volume growth at GEFA,
Global Consumer Finance and Card Services which were offset by decreases at Auto
Financial  Services and Mortgage  Services,  which both  stopped  accepting  new
business in 2000 (included in Other Consumer  Services) and, in 2001, a decrease
in  surrender  fee  income  at GEFA  associated  with  the  planned  run-off  of
restructured  insurance policies at Toho. Net earnings increased 39% in 2001 and
47% in 2000.  The  increase in 2001  reflected  productivity  benefits at Global
Consumer  Finance and GEFA,  volume growth at Card Services and reduced residual
losses at Auto Financial Services. The increase in net earnings in 2000 resulted
from  acquisition and volume growth at Card Services,  GEFA, and Global Consumer
Finance, partially offset by losses at Mortgage Services.
<PAGE>
                                       16


Equipment Management

<TABLE>
<CAPTION>
    (In millions)                                            2001                   2000                  1999
                                                      -------------------    -------------------    ------------------
<S>                                                   <C>                    <C>                    <C>
    Revenues
    Aviation Services (GECAS).....................    $          2,173       $          1,962       $          1,551
    Americom......................................               1,698                    594                    463
    IT Solutions..................................               4,180                  7,073                  8,380
    Other Equipment Management....................               4,491                  5,118                  4,989
                                                      -------------------    -------------------    ------------------
         Total revenues...........................    $         12,542       $         14,747       $         15,383
                                                      ===================    ===================    ==================
    Net earnings (a)
    Aviation Services (GECAS).....................    $            470       $            474       $            280
    Americom......................................                 896                    195                    150
    IT Solutions..................................                  11                   (197)                   (66)
    Other Equipment Management....................                 230                    361                    319
                                                      -------------------    -------------------    ------------------
         Net earnings.............................    $          1,607       $            833       $            683
                                                      ===================    ===================    ==================
</TABLE>

     (a)  Charges  of  $135   million  and  $191   million  in  2001  and  2000,
          respectively,  were not  allocated to this segment and are included in
          the All Other operating segment.

Equipment  Management  revenues  decreased 15% in 2001 following a 4% decline in
2000.  The  decrease  in both  years was  primarily  attributable  to effects of
rationalization of operations and market conditions on revenues at IT Solutions,
partially  offset by the gain on the disposition of Americom in 2001, and volume
growth at GECAS in both years. Other Equipment  Management revenues decreased in
2001,  primarily  as a  result  of  lower  volume  across  all of the  remaining
businesses.  Net earnings increased 93% in 2001 and 22% in 2000,  reflecting the
Americom  gain and  productivity  benefits  at IT  Solutions  in 2001 and volume
growth at GECAS in 2000. The decrease in Other Equipment Management net earnings
in 2001 primarily reflected lower results at Transport International Pool and GE
Capital Modular Space.

Mid-Market Financing

<TABLE>
<CAPTION>
    (In millions)                                          2001                   2000                  1999
                                                    -------------------    -------------------    ------------------
<S>                                                 <C>                    <C>                    <C>
    Revenues
    Commercial Equipment Financing..............    $          4,515       $          3,610       $          3,180
    Commercial Finance..........................               1,695                  1,543                  1,295
    Vendor Financial Services...................               2,095                  1,791                  1,372
    Other Mid-Market Financing..................                 354                     82                     82
                                                    -------------------    -------------------    ------------------
         Total revenues.........................    $          8,659       $          7,026       $          5,929
                                                    ===================    ===================    ==================
    Net earnings (a)
    Commercial Equipment Financing..............    $            592       $            496       $            396
    Commercial Finance..........................                 364                    280                    225
    Vendor Financial Services...................                 287                    241                    200
    Other Mid-Market Financing..................                  37                     (7)                     1
                                                    -------------------    -------------------    ------------------
         Net earnings...........................    $          1,280       $          1,010       $            822
                                                    ===================    ===================    ==================
</TABLE>
     (a)  Charges of $52 million in 2001 were not  allocated to this segment and
          are included in the All Other operating segment.

Mid-Market Financing revenues increased 23% in 2001, following a 19% increase in
2000,  resulting  from  acquisition  and volume growth at  Commercial  Equipment
Financing,  Vendor  Financial  Services and  Commercial  Finance,  including the
acquisition  of  Heller  Financial  on  October  24,  2001,  (included  in Other
Mid-Market  Financing),  and  increased  gains on  securitizations  of financial
assets.  The increase in revenues in 2000 primarily  reflected asset growth from
originations across all major businesses. Net earnings increased 27% in 2001 and
23% in 2000. Growth in net earnings in 2001 reflected  securitization  gains and
asset  growth  from  acquisitions   across  all  major   businesses.   In  2000,
improvements  in net  earnings  resulted  from  favorable  tax effects and asset
growth from originations.


<PAGE>
                                       17

Specialized Financing

<TABLE>
<CAPTION>
    (In millions)                                            2001                   2000                  1999
                                                      -------------------    -------------------    ------------------
<S>                                                   <C>                    <C>                    <C>
    Revenues
    Real Estate...................................    $          1,919       $          1,977       $          1,582
    Structured Finance Group......................               1,093                    999                    812
    GE Equity.....................................                (126)                 1,079                    863
    Other Specialized Financing...................                  44                     50                     51
                                                      -------------------    -------------------    ------------------
         Total revenues...........................    $          2,930       $          4,105       $          3,308
                                                      ===================    ===================    ==================
    Net earnings (a)
    Real Estate...................................    $            486       $            371       $            300
    Structured Finance Group......................                 385                    344                    270
    GE Equity.....................................                (270)                   525                    416
    Other Specialized Financing...................                 (44)                   (17)                    33
                                                      -------------------    -------------------    ------------------
         Net earnings.............................    $            557       $          1,223       $          1,019
                                                      ===================    ===================    ==================
</TABLE>
     (a)  Charges  of  $103   million   and  $49   million  in  2001  and  2000,
          respectively,  were not  allocated to this segment and are included in
          the All Other operating segment.

Specialized  Financing  revenues declined 29%, following a 24% increase in 2000,
and net  earnings  declined 54% in 2001  following a 20%  increase in 2000.  The
decrease in  revenues  and net  earnings in 2001 were a result of reduced  asset
gains at GE  Equity,  partially  offset  by  profitable  origination  growth  at
Structured  Finance  Group and higher asset gains and  productivity  benefits at
Real  Estate.  Revenues  and net earnings  growth in 2000 were  principally  the
result of origination growth across all businesses and a particularly high level
of gains on equity investment sales at GE Equity.

Specialty Insurance

<TABLE>
<CAPTION>
                                                             2001                   2000                  1999
    (In millions)                                     -------------------    -------------------    ------------------
<S>                                                   <C>                    <C>                    <C>
    Revenues
    Mortgage Insurance............................    $          1,029       $            973       $            936
    GE Global Insurance Holdings..................               9,453                 10,223                  9,013
    Other Specialty Insurance.....................                 582                    682                    694
                                                      -------------------    -------------------    ------------------
         Total revenues...........................    $         11,064       $         11,878       $         10,643
                                                      ===================    ===================    ==================
    Net earnings (a)
    Mortgage Insurance............................    $            395       $            366       $            340
    GE Global Insurance Holdings..................                 (47)                   413                    625
    Other Specialty Insurance.....................                 174                    100                    202
                                                      -------------------    -------------------    ------------------
         Net earnings.............................    $            522       $            879       $          1,167
                                                      ===================    ===================    ==================
</TABLE>
     (a)  Charges of $170 million in 2001 were not allocated to this segment and
          are included in the All Other operating segment.

Specialty  Insurance revenues decreased 7% in 2001,  following a 12% increase in
2000, as a result of reduced net premiums earned at GE Global Insurance Holdings
(the parent of  Employers  Reinsurance  Corporation),  reflecting  the events of
September 11 as discussed  below,  and decreased  investment  income,  partially
offset by increased  premium income  associated  with  origination  volume.  The
increase in 2000 resulted from premium growth and increased  investment  income,
as higher interest income more than offset a decrease in net realized investment
gains at GE Global Insurance Holdings.  Net pre-tax realized investment gains in
the marketable equity and debt securities  portfolios  amounted to $572 million,
$639 million and $811 million in 2001,  2000 and 1999,  respectively.  Remaining
available gains in the portfolios at December 31, 2001, amounted to $509 million
before tax.

Net earnings decreased 41% and 25% in 2001 and 2000, respectively, reflecting GE
Global  Insurance  Holdings  underwriting  results.  Net  earnings  in 2001 were
adversely  affected by  approximately  $575  million  ($386  million  after tax)
related to the  insurance  losses  arising from the events of September 11. This
amount,  which  primarily  resulted from contingent  premium payment  provisions
contained in certain retrocession agreements, comprises $698 million recorded as
a reduction  in net premiums  earned,  and $78 million  reflecting  policyholder
losses,  partially  offset by $201  million  reflecting a reduction in insurance
acquisition costs.  Historical  experience related to large catastrophic  events
has shown that a broad range of total  insurance  industry loss estimates  often
exists following such an event and it is not unusual for there to be significant
subsequent  revisions  in such  estimates.  $575  million is  management's  best
estimate  of its  existing  net  liability  based on the  information  currently
available,  and is net of estimated recoveries under retrocession  arrangements,
<PAGE>
                                       18


under  which a  portion  of  losses  is  routinely  ceded to  other  reinsurance
entities.  Substantially all of GECS  retrocessionaires  are large, highly rated
reinsurance  entities.  At this time,  management  does not anticipate  that any
significant portion of its estimated recoveries will be uncollectible.

Net  earnings in 2001 and 2000 were also  adversely  affected  by the  continued
deterioration   of  underwriting   results,   reflecting   higher  property  and
casualty-related losses (principally as a result of adverse development relating
to  prior-year  loss  events) and the  continued  effects of low premiums in the
property and casualty  insurance/reinsurance  industry.  As GE Global  Insurance
Holdings  underwriting  results in 2001 and 2000, typical of the global property
and casualty industry, were realized,  management began underwriting initiatives
that increased  premium prices for given levels of coverage.  These  initiatives
resulted in management reconsidering and clarifying the product lines, policies,
contracts and specific  customers for which,  given the risk,  acceptable future
levels of profit  seem  achievable.  For these  businesses,  GECS has  sought to
retain or even expand its business. On the other hand, management has identified
particular  property and casualty  business  channels  from which returns do not
appear  to  justify  the  risks.  For  these  channels,  new  business  will  be
significantly curtailed or exited.

The majority of the adverse development in 2001, and to a lesser extent in 2000,
related to higher projected ultimate losses for liability coverages,  especially
in the hospital liability, nonstandard automobile (automobile insurance extended
to higher-risk drivers) and commercial and public entity general liability lines
of business.  The increase in 2000 also  reflected an increase in  industry-wide
loss estimates  related to certain large property loss events,  with the largest
impact  resulting  from the  European  windstorms  occurring  in late 1999.  The
adverse development of GE Global Insurance Holdings for both years was partially
mitigated by favorable  experience  in the Mortgage  Insurance  business,  which
resulted from favorable economic conditions,  improvement in certain real estate
markets and loss mitigation efforts.

All Other

<TABLE>
<CAPTION>
    (In millions)                                  2001                    2000                    1999
                                            --------------------     -----------------     --------------------
   <S>                                     <C>                       <C>                   <C>
    Total revenues......................    $          (416)         $      4,528          $         1,781
                                            ====================     =================     ====================
    Total net earnings..................    $          (699)         $       (424)         $          (388)
                                            ====================     =================     ====================
</TABLE>

All Other includes  results of operations of businesses  other than those in the
five operating segments as well as charges management has not allocated to those
segments.  In 2001, $436 million of charges,  principally for asset write-downs,
resulted in a negative  total for this  category.  Revenues in 2000 included the
results of Wards  through  December 28,  2000; a pre-tax gain of $1,366  million
from sale of the  Corporation's  investment in common stock of PaineWebber;  and
charges of $238 million, principally for asset write-downs. The net loss of $699
million  for  2001  included   after-tax   costs  of  $656  million  in  certain
unprofitable  insurance  and financing  product lines that are being exited;  in
disposing of and providing for disposition of several  nonstrategic  investments
and other assets; and in restructuring  various global  operations.  These costs
included asset write-downs  totaling $285 million.  The net loss of $424 million
for 2000 comprised the PaineWebber gain of $848 million; charges of $537 million
related to Wards;  strategic  rationalization  costs of $347 million  related to
other operating  segments,  primarily for asset write-downs,  employee severance
and lease terminations; and operating losses from Wards of $245 million.

Portfolio Quality

Financing  Receivables is the largest category of assets for GECS and represents
one of its primary sources of revenues.  The portfolio of financing receivables,
before allowance for losses, increased to $178.8 billion at the end of 2001 from
$147.3 billion at the end of 2000, as discussed in the following paragraphs. The
related  allowance  for losses at the end of 2001 amounted to $4.8 billion ($4.0
billion at the end of 2000), representing management's best estimate of probable
losses inherent in the portfolio.

A discussion  of the quality of certain  elements of the  financing  receivables
portfolio follows.  "Nonearning"  receivables are those that are 90 days or more
delinquent  (or  for  which   collection  has  otherwise  become  doubtful)  and
"reduced-earning"  receivables are commercial  receivables whose terms have been
restructured to a below-market yield.

Consumer  financing  receivables,  primarily  credit card and personal loans and
auto loans and leases,  were $52.3 billion at year-end 2001, an increase of $3.5
billion from year-end 2000. Credit card and personal receivables  increased $7.0
billion,  primarily from increased origination and acquisition growth, partially
offset by sales and  securitizations  and the net  effects of  foreign  currency
translation.  Auto receivables decreased $3.5 billion,  primarily as a result of
the run-off of the liquidating  Auto Financial  Services  portfolio.  Nonearning
consumer  receivables  at  year-end  2001  were  $1.5  billion,  about  2.9%  of
outstandings, compared with $1.1 billion, about 2.3% of outstandings at year-end
2000.  Write-offs  of consumer  receivables  increased to $1.7 billion from $1.3
billion  for  2000,  reflecting  the  maturing  of  private  label  credit  card

<PAGE>
                                       19


portfolios and higher  personal  bankruptcies  on credit card loan portfolios in
Japan.  Consistent with industry trends,  consumer  delinquency  rates increased
during 2001.

Other financing receivables,  which totaled $126.5 billion at December 31, 2001,
consisted  of a diverse  commercial,  industrial  and  equipment  loan and lease
portfolio.  This  portfolio  increased  $28.0  billion  during 2001,  reflecting
increased  acquisition and  origination  growth,  partially  offset by sales and
securitizations.  Related nonearning and  reduced-earning  receivables were $1.7
billion,  about  1.4% of  outstandings  at  year-end  2001,  compared  with $0.9
billion,  about 1.0% of outstandings at year-end 2000,  reflecting several large
bankruptcies and the current economic environment.  These receivables are backed
by assets and are covered by reserves for probable losses.

The  Corporation's  loans and leases to  commercial  airlines  amounted to $21.5
billion  at the end of 2001,  up from  $15.3  billion  at the end of  2000.  The
Corporation's  commercial aircraft positions also included financial guarantees,
funding commitments, credit and liquidity support agreements and aircraft orders
as discussed in note 6.

International Operations

The  Corporation's  international  operations  include  its  operations  located
outside  the  United  States  and  certain  of its  operations  that  cannot  be
meaningfully associated with specific geographic areas (for example,  commercial
aircraft). The Corporation's  international revenues were $23.1 billion in 2001,
a decrease of 12% from $26.3 billion in 2000.

Revenues in the Pacific Basin  decreased 19% in 2001, as 2000 revenues  included
surrender fee income at GEFA from the planned run-off of restructured  insurance
policies of Toho.  Revenues in Europe  decreased 12% in 2001 as acquisition  and
core growth at Global Consumer Finance were more than offset by reduced premiums
earned,  associated with a combination of lower origination volume and increased
ceded premiums as a result of the events of September 11 at GE Global  Insurance
Holdings,  and reduced revenue  associated with the  rationalization  of certain
operations at IT Solutions.  International assets grew 16%, from $139 billion at
year-end 2000 to $162 billion at the end of 2001. The increase in 2001 primarily
reflected  growth in GECS  asset  base.  GECS  assets  increased  23% in Europe,
reflecting a mix of  origination  and  acquisition  growth.  GECS also  achieved
significant asset growth at GECAS.

The  Corporation's  activities  span all global regions and primarily  encompass
leasing of aircraft  and  providing  certain  financial  services  within  these
regional  economies.  As such,  when  certain  countries  or regions such as the
Pacific Basin and Latin America experience  currency and/or economic stress, the
Corporation  may have increased  exposure to certain risks but also may have new
profit  opportunities.  Potential  increased risks include,  among other things,
higher receivables  delinquencies and bad debts, delays or cancellation of sales
and orders  principally  related to aircraft,  higher local  currency  financing
costs and a slowdown in established  financial services  activities.  New profit
opportunities  include,  among other things,  more  opportunities for lower cost
outsourcing,  expansion of financial  services  activities  through purchases of
companies or assets at reduced prices and lower U.S. debt financing costs.

Financial results reported in U.S. dollars are affected by currency exchange.  A
number of  techniques  are used to manage  the  effects  of  currency  exchange,
including  selective  borrowings in local  currencies  and selective  hedging of
significant cross-currency transactions.  Principal currencies are the euro, the
Japanese yen and the Canadian dollar. The Corporation's operations in Europe are
all euro-capable as of January 1, 2002.

Capital Resources and Liquidity

Statement of Financial Position

Investment   securities  for  each  of  the  past  two  years  comprised  mainly
investment-grade  debt  securities  held  by  GE  Financial  Assurance  and  the
specialty  insurance  businesses of GECS in support of obligations to annuitants
and policyholders.  Investment  securities were $100.1 billion in 2001, compared
with  $90.3  billion  in  2000.  The  increase  of $9.8  billion  resulted  from
investment of premiums  received,  reinvestment  of investment  income,  and the
addition of securities from acquired  companies,  partially  offset by sales and
maturities  as well as  decreases  in the fair value of certain  debt and equity
securities.  A breakdown of the investment  securities  portfolio is provided in
note 2 to the consolidated financial statements.

Inventories  were $270  million and $666  million at December 31, 2001 and 2000,
respectively.  The decrease in 2001 primarily  reflected the  rationalization of
certain operations at IT Solutions, as well as improved inventory management.

Financing receivables were $174.0 billion at year-end 2001, net of allowance for
losses,  up $30.7  billion over 2000.  These  receivables  are  discussed in the
Portfolio  Quality  section and in notes 3 and 4 to the  consolidated  financial
statements.


<PAGE>
                                       20


Insurance  receivables  were $27.3 billion at year-end 2001, an increase of $3.5
billion that was primarily  attributable to increased  recoveries under existing
retrocession agreements and core growth, partially offset by the planned run-off
of assets at Toho (see note 5).

Other receivables  totaled $13.3 billion at both December 31, 2001 and 2000, and
consists  primarily of nonfinancing  customer  receivables,  accrued  investment
income,  amounts  due  from GE  (generally  related  to  certain  trade  payable
programs),  amounts  due under  operating  leases,  receivables  due on sales of
securities and various sundry items.

Equipment on operating  leases was $27.3  billion at December 31, 2001,  up $3.2
billion from 2000.  Details by category of investment  can be found in note 6 to
the  consolidated  financial  statements.  Additions  to  equipment on operating
leases were $12.6 billion  during 2001 ($11.4  billion  during 2000),  primarily
reflecting acquisitions of transportation equipment.

Intangible  assets were $18.7 billion at year-end 2001, up from $15.0 billion at
year-end 2000. The $3.7 billion increase in intangible  assets related primarily
to goodwill and other intangibles  associated with acquisitions,  the largest of
which was the acquisition of Heller Financial, partially offset by amortization.

Other assets totaled $55.1 billion at year-end 2001, compared with $50.4 billion
at the end of 2000.  The $4.7 billion  increase was  principally  attributed  to
additional investments in real estate and associated companies,  the recognition
of all  derivatives at fair value in accordance  with SFAS 133, and increases in
deferred insurance acquisition costs, partially offset by decreases in "separate
accounts" (see note 9).

Borrowings  were $239.9 billion at December 31, 2001, of which $160.8 billion is
due in 2002 and $79.1 billion is due in subsequent years.  Comparable amounts at
the end of 2000 were $205.4 billion in total, $124.0 billion due within one year
and $81.4 billion due thereafter. The Corporation's composite interest rates are
discussed in the Interest Expense section of Operating  Results. A large portion
of the Corporation's  borrowings ($117.5 billion and $94.5 billion at the end of
2001 and 2000,  respectively) was issued in active commercial paper markets that
management  believes  will  continue  to  be a  reliable  source  of  short-term
financing.  Most of this commercial paper was issued by GE Capital.  The average
remaining terms and interest rates of GE Capital  commercial  paper were 46 days
and  2.37% at the end of  2001,  compared  with 45 days and  6.43% at the end of
2000.  The GE  Capital  ratio of debt to equity was 7.31 to 1 at the end of 2001
and 7.53 to 1 at the end of 2000.

Insurance  liabilities,  reserves and annuity benefits were $114.2 billion, $8.1
billion  higher than in 2000.  The increase was  primarily  attributable  to the
addition of reserves  associated  with the events of September 11, and growth in
deferred annuities and guaranteed investment contracts,  partially offset by the
planned  run-off of  policyholder  contracts  at Toho and  decreases in separate
accounts. For additional information on these liabilities, see note 11.

Interest  Rate and Currency  Risk  Management.

Interest rate and currency risk  management is important in the normal  business
activities of the Corporation.  Derivative financial instruments are used by the
Corporation  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,  the  Corporation  does not engage in derivatives
trading,  derivatives  market-making,  or  other  speculative  activities.  More
detailed  information  regarding  these  financial  instruments,  as well as the
strategies and policies for their use, is contained in notes 1, 10 and 20 to the
consolidated financial statements.

The  Corporation  manages its exposure to changes in interest rates, in part, by
funding its assets with an  appropriate  mix of fixed and variable rate debt and
its exposure to currency  fluctuations  principally  by funding  local  currency
denominated  assets  with debt  denominated  in those same  currencies.  It uses
interest  rate swaps,  currency  swaps  (including  non-U.S.  currency and cross
currency  interest rate swaps) and currency  forwards to achieve lower borrowing
costs.  Substantially all of these derivatives have been designated as modifying
interest rates and/or currencies associated with specific debt instruments.

One example of the risks to which the  Corporation is exposed is prepayment risk
in  certain  of its  business  activities,  such  as in its  mortgage  servicing
activities.  The  Corporation  uses interest rate swaps,  purchased  options and
futures as an  economic  hedge of the fair value of mortgage  servicing  rights.
These swaps,  futures and  option-based  instruments  are governed by the credit
risk policies  described below and are transacted in either  exchange-traded  or
over-the-counter markets.

Established  practices require that derivative  financial  instruments relate to
specific  asset,  liability  or equity  transactions  or to currency  exposures.
Substantially  all treasury actions are centrally  executed by the Corporation's
Treasury  Department,  which  maintains  controls on all  exposures,  adheres to
stringent  counterparty  credit  standards  and  actively  monitors  marketplace
exposures.


<PAGE>
                                       21


Counterparty  credit risk is managed on an individual  counterparty basis, which
means that gains and losses are netted for each  counterparty  to determine  the
amount at risk.  When a counterparty  exceeds credit exposure limits in terms of
amounts  due to the  Corporation,  typically  as a result of  changes  in market
conditions (see table below), no additional  transactions are executed until the
exposure  with that  counterparty  is  reduced  to an amount  that is within the
established   limit.  All  swaps  are  executed  under  master  swap  agreements
containing  mutual  credit  downgrade  provisions  that  provide  the ability to
require  assignment or termination in the event either party is downgraded below
A3 or A-.

As part of its ongoing  activities,  the Corporation  enters into swaps that are
integrated into investments in or loans to particular customers. Such integrated
swaps not  involving  assumption  of  third-party  credit risk are evaluated and
monitored  like  their  associated  investments  or loans and are not  therefore
subject to the same credit criteria that would apply to a stand-alone  position.
Except for such positions,  all other swaps, purchased options and forwards with
contractual  maturities  longer  than one year are  conducted  within the credit
policy constraints  provided in the table below.  Foreign exchange forwards with
contractual   maturities   shorter   than  one  year  must  be   executed   with
counterparties  having an A-1+/ P-1 credit rating and the credit limit for these
transactions is $150 million.

Counterparty credit criteria                             Credit Rating
                                               ---------------------------------
                                                                   Standard &
                                                    Moody's          Poor's
                                               ----------------   --------------
         Term of transaction
           Between one and five years ........        Aa3              AA-
           Greater than five years ...........        Aaa              AAA
         Credit exposure limits
           Up to $50 million .................        Aa3              AA-
           Up to $75 million .................        Aaa              AAA

The  conversion of interest rate and currency risk into credit risk results in a
need to monitor  counterparty  credit risk  actively.  At December 31, 2001, the
notional amount of long-term  derivatives for which the  counterparty  was rated
below  Aa3/AA- was $1.5  billion.  These amounts are primarily the result of (1)
counterparty downgrades,  (2) transactions executed prior to the adoption of the
Corporation's  current  counterparty  credit  standards,  and  (3)  transactions
relating to acquired assets or businesses.

Following is an analysis of credit risk exposures for the last three years.

    Percentage of Notional Derivative Exposure by Counterparty Credit Rating
-------------------------------------------------------------------------------
 Moody's/Standard & Poor's          2001           2000             1999
-----------------------------  ---------------  --------------   --------------
 Aaa/AAA ....................       70%              63%             59%
 Aa/AA ......................       29%              36%             38%
 A/A and below ..............        1%               1%              3%

The  interplay  of  the  Corporation's  credit  risk  policy  with  its  funding
activities is seen in the following example, in which the Corporation is assumed
to have been offered three  alternatives  for funding  five-year fixed rate U.S.
dollar assets with five-year fixed rate U.S. dollar debt.
<TABLE>
<CAPTION>
                                                                Spread over U.S. Treasuries
                                                                      in basis points                 Counterparty
                                                               ------------------------------   -------------------------
<S>                                                                           <C>                          <C>
(a)    Fixed rate five-year medium-term note ................                +75                            -

(b)    U.S. dollar commercial paper swapped into five-year
       U.S. dollar fixed rate funding .......................                +60                            A

(c)    Swiss franc fixed rate debt swapped into five-year
       U.S. dollar fixed rate funding .......................                +73                            B
</TABLE>

Counterparty A is a major  brokerage house with an Aaa/AAA rated swap subsidiary
and a  current  exposure  in  terms of  amounts  due to the  Corporation  of $39
million.  Counterparty  B is an Aa2/AA  rated  insurance  company with a current
exposure of $50 million.

In this hypothetical  case, the Corporation would have chosen alternative (a) or
alternative (b), depending on the ratio of commercial paper outstanding to total
debt  outstanding.  Alternative (c) would not have been chosen as the additional
credit  risk of  Counterparty  B would  have  exceeded  the  Corporation's  risk
management limits.


<PAGE>
                                       22


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.

-    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").  Under  this  model,  with  all else  constant,  it is
     estimated  that  such  an  increase,  including  repricing  effects  in the
     securities portfolio, would reduce the 2002 net earnings of the Corporation
     based on year-end 2001 positions by  approximately  $189 million.  Based on
     positions  at year-end  2000,  the pro forma effect on 2001 net earnings of
     such an  increase  in  interest  rates was  estimated  to be a decrease  of
     approximately $124 million.

-    The geographic distribution of the Corporation's operations is diverse. One
     means of  assessing  exposure to changes in currency  exchange  rates is to
     model effects on reported earnings using a sensitivity  analysis.  Year-end
     2001  consolidated  currency  exposures,  including  financial  instruments
     designated and effective as hedges,  were analyzed to identify  Corporation
     assets and liabilities  denominated in other than their relevant functional
     currency.  Net unhedged  exposures in each  currency  were then  remeasured
     assuming   a   10%   decrease    (substantially   greater   decreases   for
     hyperinflationary  currencies) 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 2002 earnings of the
     Corporation.

Statement of Changes in Share Owners' Equity

Share owners' equity  increased  $5,568  million to $28,590  million at year-end
2001. The increase was largely attributable to net earnings during the period of
$5,417 million and capital contributions of $3,237 million,  partially offset by
dividends of $1,961 million.

Currency  translation  adjustments  increased  equity by $117  million  in 2001.
Changes in the currency translation adjustment reflect the effects of changes in
currency  exchange  rates  on  the  Corporation's  net  investment  in  non-U.S.
subsidiaries  that  have  functional  currencies  other  than the  U.S.  dollar.
Accumulated currency  translation  adjustments affect net earnings only when all
or a portion of an affiliate is disposed of.

Adoption of SFAS 133 in 2001  reduced  equity by $890  million,  including  $849
million at the date of  adoption.  Further  information  about  this  accounting
change is provided in note 1.

Statement of Cash Flows

The  Corporation's  cash and  equivalents  aggregated $7.3 billion at the end of
2001, up from $6.1 billion at year-end 2000. One of the primary  sources of cash
for the  Corporation  is short and  long-term  borrowings.  Over the past  three
years,  the  Corporation's  borrowings  with  maturities of 90 days or less have
increased by $28.8 billion.  New borrowings of $125.2 billion having  maturities
longer than 90 days were added during those years,  while $94.9  billion of such
longer-term  borrowings  were retired.  The  Corporation  also  generated  $41.7
billion from operating  activities,  which benefited in 2001 from an increase in
insurance   liabilities  and  reserves,   net  of  an  increase  in  reinsurance
recoverables,  and a decrease from the planned run-off of policyholder contracts
at Toho.

The principal  use of cash by the  Corporation  has been  investing in assets to
grow its businesses.  Of the $110.1 billion that the  Corporation  invested over
the  past  three  years,  $42.7  billion  was used for  additions  to  financing
receivables; $37.5 billion was used to invest in new equipment,  principally for
lease to others;  and $22.2 billion was used for acquisitions of new businesses,
the largest of which were Heller  Financial and Mellon Leasing in 2001 and Japan
Leasing and the credit card operations of JC Penney in 1999.

With the  financial  flexibility  that  comes  with  excellent  credit  ratings,
management  believes that the Corporation  should be well positioned to meet the
global  needs  of  its  customers  for  capital  and  to  continue  growing  its
diversified asset base.


<PAGE>
                                       23


Liquidity

The major debt-rating  agencies evaluate the financial  condition of GE Capital,
the major public  borrowing  entity of GECS.  Factors that are  important to the
ratings of GE Capital include the following: cash generating ability - including
cash generated from operating  activities;  earnings quality - including revenue
growth and the breadth and  diversity  of sources of income;  leverage  ratios -
such as debt to total  capital and  interest  coverage;  and asset  utilization,
including return on assets and asset turnover ratios. Considering those factors,
as well as other  criteria  appropriate  to GECS,  those major  rating  agencies
continue to give the  highest  ratings to debt of GE Capital  (long-term  credit
rating AAA/Aaa; short-term credit rating A-1+/P-1).

Global  commercial  paper  markets  are a primary  source of  liquidity  for the
Corporation.  GE Capital is the most  widely-held  name in those  markets,  with
$117.5  billion  and  $94.5  billion  outstanding  at the end of 2001 and  2000,
respectively.  Money  markets  are  extremely  robust.  In  2001,  GE  Capital's
commercial  paper  accounted for only 2.4% of activity  with  maturities of less
than one year in the U.S.  market,  the  largest  of the global  money  markets.
Management  believes that  alternative  sources of liquidity  are  sufficient to
permit an orderly  transition  from  commercial  paper in the unlikely  event of
impaired access to those markets. Funding sources on which management would rely
would depend on the nature of such a hypothetical event, but include $33 billion
of contractually  committed lending  agreements with highly-rated  global banks,
medium  and  long-term  funding,  monetization  and asset  securitization,  cash
receipts  from the  Corporation's  lending  and leasing  activities,  short-term
secured funding on global assets, and asset sales.  Strength of commercial paper
markets  and  GE  Capital's  access  to  those  markets  was  evidenced  on  and
immediately after September 11, when many financial markets were closed,  but GE
Capital continued to issue commercial paper without interruption.

Off-balance  sheet  arrangements  are used in the ordinary course of business to
achieve  improved  share  owner  returns.  One  of  the  most  common  forms  of
off-balance  sheet  arrangements  is  asset  securitization.   The  transactions
described below are similar to those used by many financial institutions and are
part of an $800 billion annual market for  asset-backed  commercial  paper.  The
Corporation  uses sponsored and  third-party  entities as well as term execution
for securitizations.  As part of this program, management considers the relative
risks and returns of each alternative and predominantly uses sponsored entities.
Management  believes  these  transactions  could  be  readily  executed  through
non-sponsored entities or term securitization at insignificant incremental cost.

In addition to improved share owner returns,  special purpose  entities serve as
funding   sources  for  a  variety  of   diversified   lending  and   securities
transactions,  transfer  selected  credit  risk and  improve  cash  flows  while
enhancing  the  ability  to  provide a full range of  competitive  products  for
customers.

The discussion below and on pages 24 and 25 describes  sponsored special purpose
entities, and is organized as follows:

     -    Structure of sponsored  special  purpose  entities and of transactions
          that result in gains on sales and removal of assets from the financial
          statements.  This section  describes assets in the entities as well as
          management prohibitions on certain types of activities.

     -    Support, both financial and operational,  provided for special purpose
          entities.  This section  describes the potential risks associated with
          special purpose  entities as well as management's  measures to control
          risk and conclusions about its potential significance.

     -    Accounting outlook for these entities.  This section briefly discusses
          the accounting policy deliberations that have been undertaken recently
          regarding special purpose entities.

Structure.  Simply stated,  the Corporation is selling  high-quality,  low-yield
financial  assets to  highly-rated  entities that have financed those  purchases
using low-cost commercial paper. Because the Corporation is the sponsor of these
entities and guarantees certain of their positions, management believes that the
structures warrant a more complete explanation, as follows.

The  first  step in the  securitization  process  uses  entities  that  meet the
accounting   criteria  for  Qualifying  Special  Purpose  Entities   (qualifying
entities).  Among other  criteria,  a  qualifying  entity's  activities  must be
restricted to passive  investment in financial assets and issuance of beneficial
interests in those  assets.  Under  generally  accepted  accounting  principles,
entities meeting these criteria are not consolidated in the sponsor's  financial
statements.  The  Corporation  sells  selected  financial  assets to  qualifying
entities.   Examples  include  the  Corporation's   financing  and  credit  card
receivables.  On the  whole,  the credit  quality of such  assets is equal to or
higher than the credit quality of similar assets owned by the Corporation.

Qualifying entities raise cash by issuing beneficial  interests - rights to cash
flows from the assets - to other  GECS-sponsored  special purpose  entities that
issue  highly-rated  commercial  paper to third-party  institutional  investors.
These entities use commercial paper proceeds to obtain  beneficial  interests in

<PAGE>
                                       24


the  financial  assets  of  qualifying  entities,  as well as  financial  assets
originated by multiple third parties.  The  Corporation  provides credit support
for certain of these  assets,  as well as liquidity  support for the  commercial
paper, as described below. In accordance with its contractual commitments to the
entities,  the  Corporation  rigorously  underwrites and services the associated
assets, both those originated by the Corporation,  and those originated by other
participants. All of the entities' assets serve as collateral for the commercial
paper.  These  entities  are  not  consolidated  in the  accompanying  financial
statements. Support activities include credit reviews at acquisition and ongoing
review, billing and collection activities - the same support activities that the
Corporation employs for its own financing receivables.

GECS-sponsored  special  purpose  entities are routinely  evaluated by the major
credit rating agencies,  including monthly reviews of key performance indicators
and annual reviews of asset quality.  Commercial  paper issued by these entities
has always received the highest  available  ratings from the major credit rating
agencies and at year-end 2001 was rated A-1+/P-1.

The following table summarizes receivables held by special purpose entities.

 (In millions)                                2001                  2000
                                       ----------------    --------------------
 Receivables - secured by
   Equipment (a)...................    $     12,781        $        7,993
   Commercial real estate..........           9,971                 7,445
   Other assets (a)................           7,761                 6,249
 Credit card receivables...........           9,470                 6,170
 Trade receivables (a).............           3,028                 3,138
                                       ----------------    --------------------
      Total receivables............    $     43,011        $       30,995
                                       ================    ====================

(a)  GE assets  included  in the  categories  above at  year-end  2001 and 2000,
     respectively,  are as follows:  Equipment - $631 million and $269  million;
     Other assets - $757 million and $611  million;  Trade  receivables - $2,396
     million and $1,733 million.

Each of the categories of assets shown in the table above  represent  portfolios
of assets that,  in addition to being highly  rated,  are  diversified  to avoid
concentrations  of  risk.  In  each of the  first  three  categories,  financing
receivables are collateralized by a diverse mix of assets. Examples of assets in
each  category  follow:  equipment  - loans  and  leases  on  manufacturing  and
transportation  equipment;   commercial  real  estate  -  loans  on  diversified
commercial  property;  other assets - diversified  commercial loans; credit card
receivables  - more than 23 million  individual  accounts;  trade  receivables -
balances of high credit quality accounts from sales of a broad range of products
and services to a diversified customer base.

In addition to the activities discussed previously, Financial Guaranty Insurance
Company (FGIC),  a leader in the municipal bond insurance  market,  uses special
purpose entities that offer municipalities  guaranteed investment contracts with
interests  in  high-quality,   fixed-maturity,  investment  grade  assets.  FGIC
actively  manages these assets under strict  investment  criteria and GE Capital
also provides  certain  performance  guarantees.  Total assets in sponsored FGIC
entities  amounted to $13.4  billion and $10.2  billion at December 31, 2001 and
2000, respectively.

None of these special  purpose  entities or qualifying  entities is permitted to
hold GE stock and there are no  commitments  or guarantees  that provide for the
potential  issuance of GE stock.  These  entities  do not engage in  speculative
activities of any description,  are not used to hedge GECS positions,  and under
GE integrity  policies,  no GE employee is permitted to invest in any  sponsored
special purpose entity.

Support.  Financial  support for certain special purpose entities is provided in
the following ways.

-    Under active liquidity  support  agreements,  the Corporation has agreed to
     lend to these entities on a secured basis if (a) certain market  conditions
     render  the  entities  unable  to issue  new debt  instruments,  or (b) the
     entity's  credit ratings were reduced below specified  levels.  The maximum
     amount of such support for commercial  paper  outstanding was $43.2 billion
     at December 31, 2001.  Under related unused liquidity  support  agreements,
     the Corporation has made additional  liquidity support  commitments of $9.4
     billion at December 31,  2001,  that would be  effective  upon  addition of
     qualified assets to the entities.

-    Under credit support  agreements,  the Corporation  provides recourse for a
     maximum of $14.5 billion of credit losses in special purpose entities. $9.1
     billion of this support  represents full recourse for certain  assets;  the
     balance is based on loss-sharing  formulas.  Assets with credit support are
     funded  by  commercial  paper  that is  subject  to the  liquidity  support
     described   above.   Potential  credit  losses  are  provided  for  in  the

<PAGE>
                                       25


     Corporation's  financial  statements based on management's best estimate of
     probable losses inherent in the portfolio using the same methodology as for
     owned assets.  The  Corporation's  allowances  for losses  amounted to $0.7
     billion and $0.6 billion at year-end 2001 and 2000, respectively.

-    Performance  guarantees  relate to letters of credit and liquidity  support
     for  guaranteed  investment  contracts and are subject to a maximum of $3.8
     billion at December 31, 2001.

Management has extensive experience in evaluating economic, liquidity and credit
risk. In view of this experience,  the high quality of assets in these entities,
the historically robust quality of commercial paper markets,  and the historical
reliability of controls applied both to asset servicing and to activities in the
credit markets,  management  believes that, under any reasonable future economic
developments,  the likelihood is remote that any such arrangements  could have a
significant  effect on the  Corporation's  operations,  cash flows or  financial
position.

Sales of securitized assets to special purpose entities result in a gain or loss
amounting to the net of sales proceeds,  the carrying amount of net assets sold,
the fair value of servicing  rights and an allowance for losses.  Securitization
sales resulted in gains of $1.3 billion and about $0.5 billion in 2001 and 2000,
respectively, and are included in time sales, loan and other income.

Accounting outlook. Various generally accepted accounting principles specify the
conditions that the Corporation  observes in not  consolidating  special purpose
entities and qualifying  entities.  Accounting for special  purpose  entities is
under  review  by  the  Financial   Accounting   Standards   Board,   and  their
non-consolidated status may change as a result of those reviews.

Summary.  The special purpose  entities  described above meet the  Corporation's
economic  objectives  for their  use while  complying  with  generally  accepted
accounting  principles.  In the event that accounting rules change in a way that
adversely  affects sponsored  entities,  alternative  securitization  techniques
discussed  on page 23  would  likely  serve  as a  substitute  at  insignificant
incremental cost.

Principal debt conditions that could automatically  result in remedies,  such as
acceleration of the Corporation's debt, are described below.

-    If the short-term  credit rating of GE Capital or certain  special  purpose
     entities previously discussed were to fall below A-1+/P-1, GE Capital would
     be  required  to provide  substitute  liquidity  for those  entities  or to
     purchase  the  outstanding  commercial  paper.  The maximum  amount that GE
     Capital  would be required  to provide in the event of such a downgrade  is
     $43.2 billion at December 31, 2001.

-    If the  long-term  credit rating of GE Capital or certain  special  purpose
     entities previously  discussed were to fall below AA-/Aa3, GE Capital would
     be required to provide  substitute  credit support or liquidate the special
     purpose  entities.  The maximum amount that GE Capital would be required to
     substitute  in the event of such a downgrade  is $14.5  billion at December
     31, 2001.

-    If the  long-term  credit  rating of the  Corporation  under  certain swap,
     forward  and option  contracts  falls below  A-/A3,  certain  remedies  are
     required as discussed in note 20.

-    If GE Capital's ratio of earnings to fixed charges,  which was 1.72 to 1 at
     the end of 2001  deteriorates  to 1.10 to 1 or, upon  redemption of certain
     preferred  stock,  its ratio of debt to equity,  which was 7.31 to 1 at the
     end of 2001 exceeds 8 to 1, GE has  committed to  contribute  capital to GE
     Capital.  GE also  has  guaranteed  subordinated  debt of GECS  with a face
     amount of $1.0 billion at December 31, 2001, and 2000.

None  of  these  conditions  has  been  met in the  Corporation's  history,  and
management believes that under any reasonable future economic developments,  the
likelihood is remote that any such arrangements  could have a significant effect
on the Corporation's operations, cash flows or financial position.

Timing of  contractual  commitments  at the  Corporation,  related to leases and
debt, follow.
<TABLE>
<CAPTION>
(In billions)                      2002               2003               2004              2005                2006
                              ---------------     --------------    ---------------    --------------     ---------------
<S>                           <C>                 <C>               <C>                <C>                <C>
Commercial paper..........    $     117.5         $      -          $      -           $      -           $      -
Other.....................           44.4               26.4              15.2               10.5                6.9
</TABLE>
<PAGE>
                                       26

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  Corporation'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  financing   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 Corporation's exposure to losses on financing receivables at
year-end 2001 was  approximately  $193  billion,  including  credit  support for
special purpose entities, against which an allowance for losses of approximately
$5.5 billion was provided. An analysis of changes in the allowance for losses is
provided on page 18 which  discusses  financing  receivable  portfolio  quality.
While losses depend to a large degree on future economic conditions,  management
does not  forecast  significant  adverse  credit  development  in 2002.  Further
information is provided in notes 1, 3 and 4.

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 $100 billion at
year-end  2001.  Gross  unrealized  gains and losses  included in that  carrying
amount  related  to  debt   securities  were  $1.9  billion  and  $2.3  billion,
respectively.  Gross unrealized gains and losses on equity  securities were $0.2
billion and $0.4  billion,  respectively.  Of those  securities  whose  carrying
amount  exceeds fair value at year-end  2001,  and based on  application  of the
Corporation's  accounting policy for impairment,  approximately  $600 million of
portfolio value is at risk of being charged to earnings in 2002. The Corporation
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 2 and on page 19, which discusses
the investment securities portfolio.

Insurance liabilities and reserves differ for short and long-duration  insurance
contracts.  Short-duration  contracts such as property and casualty policies are
accounted  for based on actuarial  estimates  of the amount of loss  inherent in
that  period's  claims,  including  losses  for which  claims  have not yet been
reported.  Short-duration contract loss estimates rely on actuarial observations
of ultimate  loss  experience  for similar  historical  events.  Measurement  of
long-duration  insurance  liabilities  (such as term and  whole  life  insurance
policies)  also is based  on  approved  actuarial  techniques,  but  necessarily
includes  assumptions  about mortality,  lapse rates and future yield on related
investments.  The  Corporation's  insurance  liabilities,  reserves  and annuity
benefits  totaled $114.2 billion at year-end 2001. Of that total,  approximately
$27.2  billion  related  to unpaid  claims and claims  adjustment  expenses  for
short-duration  insurance  coverage.  As  discussed on page 18, there has been a
recent shift in the source of adverse  loss  development  away from  property to
liability coverage.  Management  continually evaluates the potential for changes
in loss  estimates,  both positive and  negative,  and uses the results of these
evaluations  both to  adjust  recorded  provisions  and to  adjust  underwriting
criteria  and  product  offerings.   The  potential  for  further  adverse  loss
development  in these  areas is  highly  uncertain.  Further  information  about
insurance liabilities is provided in note 11.

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.  Although no specific  conclusions
reached by these standard  setters  appear likely to cause a material  change in
the  Corporation's  accounting  policies,  outcomes  cannot  be  predicted  with
confidence.  Also see note 1, Summary of Significant Accounting Policies,  which
discusses accounting policies that must be selected by management when there are
acceptable alternatives.

<PAGE>
                                       27


New Accounting Standards

Major  provisions of new  accounting  standards  that may be  significant to the
Corporation's  financial statements in the future are described in the following
paragraphs.

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 not yet determined the
exact amount of goodwill impairment under these new standards,  but believes the
non-cash  transition  charge to earnings will be approximately  $1.0 billion and
recognized in the first quarter of 2002.  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 effect of
the  non-amortization  provisions  on 2002  operations  will be affected by 2002
acquisitions and cannot be forecast,  but if these rules had applied to goodwill
in 2001,  management  believes  that  full-year  2001 net  earnings  would  have
increased by approximately $600 million.

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.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

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



<PAGE>
                                       28



Item 8.   Financial Statements and Supplementary Data.


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
General Electric Capital Services, Inc.:

We have  audited  the  consolidated  financial  statements  of General  Electric
Capital  Services,  Inc. and  consolidated  affiliates  as listed in Item 14. In
connection with our audits of the  consolidated  financial  statements,  we also
have  audited the  financial  statement  schedules  as listed in Item 14.  These
consolidated  financial  statements  and financial  statement  schedules are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated  financial  statements and financial  statement
schedules based on our audits.

We conducted our audits 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  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 General Electric
Capital  Services,  Inc. and  consolidated  affiliates  at December 31, 2001 and
2000,  and the results of their  operations and their cash flows for each of the
years in the  three-year  period ended  December 31, 2001,  in  conformity  with
accounting  principles generally accepted in the United States of America.  Also
in our opinion,  the related financial statement  schedules,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
present fairly, in all material respects, the information set forth therein.

As discussed in note 1 to the consolidated financial statements, the Corporation
in 2001 changed its method of accounting for derivative  instruments and hedging
activities and impairment of certain beneficial interests in securitized assets.







/s/ KPMG LLP



Stamford, Connecticut

February 8, 2002




<PAGE>
                                       29


<TABLE>
<CAPTION>

                                   GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                                                         Statement of Earnings



 For the years ended December 31 (In millions)                               2001             2000             1999
                                                                       --------------   --------------   --------------
<S>                                                                    <C>               <C>              <C>
 REVENUES
 Time sales, loan and other income .................................   $     22,150     $     22,326     $     18,209
 Operating lease rentals ...........................................          6,088            6,183            6,022
 Financing leases ..................................................          4,261            3,688            3,587
 Investment income .................................................          6,593            8,479            6,243
 Premium and commission income of insurance affiliates (note 11)....         15,634           16,093           12,948
 Sales of goods ....................................................          3,627            9,408            8,740
                                                                       --------------   --------------   --------------
     Total revenues .................................................        58,353           66,177           55,749
                                                                       --------------   --------------   --------------
 EXPENSES
 Interest ..........................................................         10,598           11,111            9,359
 Operating and administrative (note 14) ............................         16,366           19,453           16,260
 Insurance losses and policyholder and annuity benefits  ...........         15,062           14,399           11,028
 Cost of goods sold ................................................          3,266            8,537            7,976
 Provision for losses on financing receivables (note 4) ............          2,481            2,045            1,671
 Depreciation and amortization of buildings and equipment and
   equipment on operating leases (notes 6 & 7) .....................          3,451            3,314            3,173
 Minority interest in net earnings of consolidated affiliates ......            163              214              186
                                                                       --------------   --------------   --------------
       Total expenses ..............................................         51,387           59,073           49,653
                                                                       --------------   --------------   --------------
 Earnings before income taxes and accounting changes................          6,966            7,104            6,096
 Provision for income taxes (note 15) ..............................         (1,380)          (1,912)          (1,653)
                                                                       --------------   --------------   --------------
 Earnings before accounting changes.................................          5,586            5,192            4,443
 Cumulative effect of accounting changes (note 1)..................            (169)               -                -
                                                                       --------------   --------------   --------------
 NET EARNINGS ......................................................   $      5,417     $      5,192     $      4,443
                                                                       ==============   ==============   ==============

</TABLE>
<TABLE>
<CAPTION>
                                          Statement of Changes in Share Owners' Equity


 (In millions)                                                               2001            2000              1999
                                                                       --------------   --------------   --------------
 <S>                                                                    <C>             <C>               <C>
 CHANGES IN SHARE OWNERS' EQUITY
 Balance at January 1 ..............................................    $    23,022     $     20,321     $     19,727
                                                                       --------------   --------------   --------------
 Transactions with share owners (note 13) ..........................          1,276           (1,752)          (1,474)
                                                                       --------------   --------------   --------------
 Changes other than transactions with share owners:
   Increases attributable to net earnings ..........................          5,417            5,192            4,443
   Investment securities - net (note 13)............................           (352)            (166)          (2,206)
   Currency translation adjustments (note 13) ......................            117             (573)            (169)
   Derivatives qualifying as hedges (note 13).......................           (890)               -                -
                                                                       --------------   --------------   --------------
    Total changes other than transactions with share owners ........          4,292            4,453            2,068
                                                                       --------------   --------------   --------------
 Balance at December 31 ............................................   $     28,590     $     23,022     $     20,321
                                                                       ==============   ==============   ==============

</TABLE>




See notes to Consolidated Financial Statements.


<PAGE>
                                       30


<TABLE>
<CAPTION>


                                 GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                                               Statement of Financial Position


 At December 31 (In millions)                                                                2001             2000
                                                                                       --------------   --------------
 <S>                                                                                    <C>               <C>
 ASSETS
 Cash and equivalents ..............................................................   $      7,314      $     6,052
 Investment securities (note 2) ....................................................        100,138           90,330
 Financing receivables (note 3):
   Time sales and loans, net of deferred income ....................................        122,686           96,270
   Investment in financing leases, net of deferred income ..........................         56,147           51,063
                                                                                       --------------   --------------
                                                                                            178,833          147,333
   Allowance for losses on financing receivables (note 4) ..........................         (4,801)          (4,034)
                                                                                       --------------   --------------
      Financing receivables - net ..................................................        174,032          143,299
 Insurance receivables (note 5).....................................................         27,317           23,802
 Other receivables .................................................................         13,267           13,288
 Inventories .......................................................................            270              666
 Equipment on operating leases (at cost), less accumulated
   amortization of $9,135 and $7,901 (note 6) ......................................         27,320           24,147
 Buildings and equipment (at cost), less accumulated depreciation
   of $1,579 and $2,084 (note 7) ...................................................          2,021            3,669
 Intangible assets - net (note 8) ..................................................         18,717           15,017
 Other assets (note 9) .............................................................         55,088           50,366
                                                                                       --------------   --------------
   Total assets ....................................................................   $    425,484     $    370,636
                                                                                       ==============   ==============
 LIABILITIES AND SHARE OWNERS' EQUITY
 Short-term borrowings (note 10) ...................................................   $    160,844     $    123,992
 Long-term borrowings (note 10) ....................................................         79,091           81,379
                                                                                       --------------   --------------
   Total borrowings ................................................................        239,935          205,371
 Accounts payable ..................................................................         13,705           10,436
 Insurance liabilities, reserves and annuity benefits (note 11) ....................        114,223          106,150
 Other liabilities .................................................................         16,647           13,451
 Deferred income taxes (note 15) ...................................................          8,117            8,238
                                                                                       --------------   --------------
   Total liabilities ...............................................................        392,627          343,646
                                                                                       --------------   --------------
 Minority interest in equity of consolidated affiliates (note 12) ..................          4,267            3,968
                                                                                       --------------   --------------
 Cumulative preferred stock, $10,000 par value (80,000 shares authorized; 51,000
   shares issued and held primarily by consolidated affiliates at
   December 31, 2001 and 2000) .....................................................             10               10
 Common stock, $1,000 par value (1,260 shares authorized at December 31, 2001
   and 2000 and 1,012 shares outstanding at December 31, 2001 and 2000).............              1                1
 Additional paid-in capital ........................................................          5,979            2,742
 Retained earnings .................................................................         24,678           21,222
 Accumulated gains/(losses) - net:
   Investment securities (a) .......................................................           (348)               4
   Currency translation adjustments (a) ............................................           (840)            (957)
   Derivatives qualifying as hedges (a).............................................           (890)               -
                                                                                       --------------   --------------
   Total share owners' equity (note 13) ............................................         28,590           23,022
                                                                                       --------------   --------------
   Total liabilities and share owners' equity ......................................   $    425,484     $    370,636
                                                                                       ==============   ==============
</TABLE>

(a)  The sum of accumulated  gains/(losses) on investment  securities,  currency
     translation  adjustments and derivatives  qualifying as hedges  constitutes
     "Accumulated  nonowner  changes other than  earnings," as shown in note 13,
     and was  ($2,078)  million and ($953)  million at  year-end  2001 and 2000,
     respectively.

See notes to Consolidated Financial Statements.


<PAGE>
                                       31


<TABLE>
<CAPTION>
                                GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                                                      Statement of Cash Flows


 For the years ended December 31 (In millions)                            2001             2000             1999
                                                                      --------------   --------------   --------------
<S>                                                                   <C>              <C>              <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
 Net earnings ....................................................    $      5,417     $      5,192     $      4,443
 Adjustments to reconcile net earnings to cash provided from
   operating activities:
 Cumulative effect of accounting changes..........................             169                -                -
 Depreciation and amortization of buildings and equipment and
    equipment on operating leases.................................           3,451            3,314            3,173
 Provision for losses on financing receivables ...................           2,481            2,045            1,671
 Amortization of goodwill and other intangibles ..................           1,139            2,174            1,199
 Increase in deferred income taxes ...............................             862              683              847
 Decrease (increase) in inventories ..............................             396             (261)             327
 Increase in accounts payable ....................................           4,804            3,047              699
 Increase (decrease) in insurance liabilities and reserves .......           8,194           (1,009)           4,584
 All other operating activities ..................................          (9,314)          (5,901)          (2,124)
                                                                      --------------   --------------   --------------
 Cash from operating activities ..................................          17,599            9,284           14,819
                                                                      --------------   --------------   --------------
 CASH FLOWS USED FOR INVESTING ACTIVITIES
 Net increase in financing receivables (note 19) .................         (13,952)         (16,076)         (12,628)
 Buildings and equipment and equipment on operating leases
    - additions ..................................................         (12,644)         (11,431)         (13,466)
    - dispositions ...............................................           7,345            6,714            6,262
 Payments for principal businesses purchased, net of
   cash acquired..................................................         (10,993)          (1,176)         (10,060)
 All other investing activities (note 19) ........................          (7,557)         (12,173)          (8,283)
                                                                      --------------   --------------   --------------
 Cash used for investing activities ..............................         (37,801)         (34,142)         (38,175)
                                                                      --------------   --------------   --------------
 CASH FLOWS FROM FINANCING ACTIVITIES
 Net change in borrowings (maturities of 90 days or less) ........          23,634           (2,121)           7,308
 Newly issued debt (maturities longer than 90 days) (note 19) ....          30,752           46,887           47,605
 Repayments and other reductions (maturities longer than 90 days)
    (note 19) ....................................................         (36,051)         (31,907)         (26,924)
 Dividends paid ..................................................          (1,961)          (1,822)          (1,666)
 All other financing activities (note 19) ........................           5,090           12,942              622
                                                                      --------------   --------------   --------------
 Cash from financing activities ..................................          21,464           23,979           26,945
                                                                      --------------   --------------   --------------
 INCREASE (DECREASE) IN CASH AND EQUIVALENTS DURING THE YEAR .....           1,262             (879)           3,589
 CASH AND EQUIVALENTS AT BEGINNING OF YEAR .......................           6,052            6,931            3,342
                                                                      --------------   --------------   --------------
 CASH AND EQUIVALENTS AT END OF YEAR .............................    $      7,314     $      6,052     $      6,931
                                                                      ==============   ==============   ==============

</TABLE>


See notes to Consolidated Financial Statements.


<PAGE>
                                       32




       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                   Notes to Consolidated Financial Statements

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation - General Electric Capital Services,  Inc. ("the Parent") owns all
of the common stock of General Electric  Capital  Corporation ("GE Capital") and
GE Global Insurance Holding  Corporation ("GE Global Insurance  Holdings").  All
outstanding common stock of the Parent is owned by General Electric Company ("GE
Company" or "GE") and an affiliate  of GE Company.  The  consolidated  financial
statements  represent  the  adding  together  of  the  Parent  and  all  of  its
majority-owned and controlled affiliates ("consolidated affiliates"),  including
GE  Capital  and  GE  Global  Insurance  Holdings   (collectively   called  "the
Corporation").

All significant  transactions among the Corporation and consolidated  affiliates
have been eliminated.  Associated companies, generally companies that are 20% to
50%  owned  and  over  which  the  Corporation,   directly  or  indirectly,  has
significant  influence,   are  included  in  other  assets  and  valued  at  the
appropriate share of equity plus loans and advances.  Certain prior-year amounts
have been reclassified to conform to the current year presentation.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  reported  amounts and related  disclosures.  Actual results could differ
from those estimates.

Methods of Recording  Revenues  from  Services  (Earned  Income) - Income on all
loans is  recognized  on the  interest  method.  Accrual of  interest  income is
suspended at the earlier of the time at which  collection of an account  becomes
doubtful or the account becomes 90 days delinquent.  Interest income on impaired
loans is recognized  either as cash is collected or on a cost recovery  basis as
conditions warrant.

Financing  lease  income is recorded on the  interest  method so as to produce a
level yield on funds not yet recovered.  Estimated  unguaranteed residual values
of leased assets are based primarily on periodic  independent  appraisals of the
values of leased assets remaining at expiration of the lease terms.

Operating lease income is recognized on a straight-line  basis over the terms of
the underlying leases.

Origination,  commitment  and other  nonrefundable  fees related to fundings are
deferred and recorded in earned income on the interest  method.  Commitment fees
related to loans not expected to be funded and line-of-credit  fees are deferred
and recorded in earned income on a straight-line  basis over the period to which
the fees  relate.  Syndication  fees are  recorded in earned  income at the time
related services are performed unless significant contingencies exist.

Income from investment and insurance activities is discussed on page 33.

Sales of Goods - Sales of goods are recorded  when a firm sales  agreement is in
place,  delivery has occurred and  collectibility  of the fixed or  determinable
sales price is reasonably assured.

Cash and Equivalents - Certificates  and other time deposits are treated as cash
equivalents.

Recognition of Losses on Financing  Receivables  and Investments - The allowance
for losses on small-balance  receivables reflects  management's best estimate of
probable losses inherent in the portfolio determined principally on the basis of
historical experience.  For other receivables,  principally the larger loans and
leases,  the  allowance  for  losses  is  determined  primarily  on the basis of
management's best estimate of probable losses, including specific allowances for
known troubled accounts.

All accounts or portions  thereof  deemed to be  uncollectible  or to require an
excessive  collection  cost  are  written  off  to  the  allowance  for  losses.
Small-balance accounts generally are written off when 6 to 12 months delinquent,
although  any such  balance  judged to be  uncollectible,  such as an account in
bankruptcy,   is  written  down  immediately  to  estimated   realizable  value.
Large-balance accounts are reviewed at least quarterly,  and those accounts with
amounts  that are  judged to be  uncollectible  are  written  down to  estimated
realizable value.

When  collateral is  repossessed  in  satisfaction  of a loan, the receivable is
written down  against the  allowance  for losses to estimated  fair value of the
asset less costs to sell,  transferred to other assets and subsequently  carried
at the lower of cost or estimated fair value less costs to sell. This accounting
method has been employed principally for specialized financing transactions.
<PAGE>
                                       33


Investment Securities - Investments in debt and marketable equity securities are
reported at fair value based  primarily  on quoted  market  prices or, if quoted
prices are not  available,  discounted  expected  cash flows using  market rates
commensurate  with credit quality and maturity of the investment.  Substantially
all investment  securities are designated as available for sale, with unrealized
gains and losses included in share owners' equity,  net of applicable  taxes and
other adjustments.  Investment  securities are regularly reviewed for impairment
based on criteria  that include the extent to which cost exceeds  market  value,
the duration of the market  decline,  and the  financial  health of and specific
prospects for the issuer.  Unrealized  losses that are other than  temporary are
recognized  in  earnings.  Realized  gains and losses are  accounted  for on the
specific identification method.

Inventories  - The  Corporation's  inventories  consist  primarily  of  finished
products  held for  sale.  All  inventories  are  stated at the lower of cost or
realizable values. Cost is primarily determined on a first-in, first-out basis.

Equipment  on  Operating  Leases -  Equipment  is  amortized,  principally  on a
straight-line basis, to estimated residual value over the lease term or over the
estimated economic life of the equipment.

Buildings and Equipment - Depreciation is recorded on either a  sum-of-the-years
digits formula or a straight-line basis over the lives of the assets.

Intangible  Assets - Goodwill is amortized over its estimated  period of benefit
on a straight-line  basis;  other intangible assets are amortized on appropriate
bases over their estimated lives. No amortization  period exceeds 40 years. When
an intangible  asset exceeds  associated  expected  operating cash flows,  it is
considered to be impaired and is written down to fair value, which is determined
based on either discounted future cash flows or appraised values.

Insurance Accounting Policies - Accounting policies for insurance businesses are
as follows.

Premium income. Insurance premiums are reported as earned income as follows:

-    For short-duration  insurance  contracts  (including property and casualty,
     accident  and health,  and  financial  guaranty  insurance),  premiums  are
     reported as earned income, generally on a pro rata basis, over the terms of
     the related agreements.  For retrospectively  rated reinsurance  contracts,
     premium  adjustments  are  recorded  based  on  estimated  losses  and loss
     expenses, taking into consideration both case and incurred-but-not-reported
     reserves.

-    For traditional long-duration insurance contracts (including term and whole
     life  contracts  and  annuities  payable  for the  life of the  annuitant),
     premiums are reported as earned income when due.

-    For investment  contracts and universal life contracts,  premiums  received
     are reported as liabilities,  not as revenues. Universal life contracts are
     long-duration  insurance  contracts  with  terms  that  are not  fixed  and
     guaranteed;  for these  contracts,  revenues are recognized for assessments
     against  the  policyholder's  account,   mostly  for  mortality,   contract
     initiation,   administration  and  surrender.   Investment   contracts  are
     contracts that have neither significant mortality nor significant morbidity
     risk,  including  annuities  payable  for a  determined  period;  for these
     contracts,  revenues  are  recognized  on the  associated  investments  and
     amounts credited to policyholder accounts are charged to expense.

Deferred  policy  acquisition  costs.  Costs  that vary  with and are  primarily
related to the acquisition of new and renewal insurance and investment contracts
are deferred and amortized over the respective policy terms. For  short-duration
insurance  contracts,   acquisition  costs  consist  primarily  of  commissions,
brokerage  expenses and premium taxes. For  long-duration  insurance  contracts,
these costs consist  primarily of first-year  commissions in excess of recurring
renewal  commissions,  certain variable sales expenses and certain support costs
such as underwriting and policy issue expenses.

-    For short-duration insurance contracts,  these costs are amortized pro rata
     over the contract periods in which the related premiums are earned.

-    For  traditional   long-duration  insurance  contracts,   these  costs  are
     amortized  over the  respective  contract  periods in  proportion to either
     anticipated  premium income or, in the case of  limited-payment  contracts,
     estimated benefit payments.

-    For  investment  contracts and universal  life  contracts,  these costs are
     amortized on the basis of anticipated gross profits.

Periodically, deferred policy acquisition costs are reviewed for recoverability;
anticipated investment income is considered in recoverability evaluations.


<PAGE>
                                       34


Present value of future  profits.  The actuarially  determined  present value of
anticipated net cash flows to be realized from insurance, annuity and investment
contracts in force at the date of acquisition  of life insurance  enterprises is
recorded  as the  present  value of future  profits  and is  amortized  over the
respective  policy  terms in a manner  similar to  deferred  policy  acquisition
costs.  Unamortized  balances are adjusted to reflect experience and impairment,
if any.

Accounting Changes

At January 1, 2001,  GECS adopted  Statement of Financial  Accounting  Standards
(SFAS) 133,  Accounting for Derivative  Instruments and Hedging  Activities,  as
amended.   Under  SFAS  133,  all  derivative   instruments  (including  certain
derivative  instruments  embedded  in other  contracts)  are  recognized  in the
balance  sheet at their  fair  values and  changes in fair value are  recognized
immediately in earnings, unless the derivatives qualify as hedges of future cash
flows. For derivatives  qualifying as hedges of future cash flows, the effective
portion  of  changes  in fair value is  recorded  temporarily  in  equity,  then
recognized in earnings along with the related  effects of the hedged items.  Any
ineffective  portion of hedges is reported  in  earnings  as it occurs.  Further
information about derivatives and hedging is provided in note 20.

The cumulative effect of adopting this accounting change at January 1, 2001, was
as follows:

                                                                 Share Owners'
 (In millions)                                       Earnings       Equity
                                                --------------  --------------
 Adjustment to fair value of derivatives (a) .. $         (77)  $      (1,374)
 Income tax effects............................            28             525
                                                -------------- ---------------
      Total.................................... $         (49)  $        (849)
                                                ============== ===============

 (a)  For earnings effect, amount shown is net of adjustment to hedged items.

The  cumulative  effect on earnings  comprised  two  significant  elements.  One
element was associated  with conversion  option  positions that were embedded in
financing  agreements,  and the other was a portion  of the effect of marking to
market options and currency contracts used for hedging. The cumulative effect on
share owners' equity was primarily attributable to marking to market forward and
swap contracts  used to hedge  variable-rate  borrowings.  Decreases in the fair
values of these  instruments  were  attributable  to declines in interest  rates
since  inception  of the  hedging  arrangements.  As a  matter  of  policy,  the
Corporation  ensures that funding,  including the effect of derivatives,  of its
lending  and other  financing  asset  positions  are  substantially  matched  in
character (e.g., fixed vs. floating) and duration. As a result,  declines in the
fair values of these effective  derivatives are offset by unrecognized  gains on
the related  financing  assets and hedged items, and future earnings will not be
subject to volatility arising from interest rate changes.

In  November  2000,  the  Emerging  Issues  Task Force  (EITF) of the  Financial
Accounting  Standards  Board  (FASB)  reached  a  consensus  on  accounting  for
impairment of retained beneficial  interests (EITF 99-20). Under this consensus,
impairment  of  certain  beneficial  interests  in  securitized  assets  must be
recognized when (1) the asset's fair value is below its carrying value,  and (2)
it is probable  that there has been an adverse  change in estimated  cash flows.
The cumulative  effect of adopting EITF 99-20 at January 1, 2001, was a one-time
reduction of net earnings of $120 million.

These accounting  changes did not involve cash, and management expects that they
will have no more than a modest effect on future results.


<PAGE>
                                       35


NOTE 2. INVESTMENT SECURITIES

A summary of investment securities follows:

<TABLE>
<CAPTION>
                                                                        Gross           Gross
                                                     Amortized       unrealized      unrealized        Estimated
 (In millions)                                          cost            gains          losses         fair value
                                                   --------------   --------------  --------------   --------------
 <S>                                                 <C>              <C>            <C>              <C>
 December 31, 2001
 Debt securities:
  U.S. corporate ...............................    $    47,391      $       880    $     (1,626)    $     46,645
  State and municipal ..........................         12,518              180            (136)          12,562
  Mortgage-backed ..............................         16,442              424             (90)          16,776
  Corporate - non-U.S. .........................         13,088              232            (277)          13,043
  Government - non-U.S. ........................          6,104              183            (124)           6,163
  U.S. government and federal agency ...........          1,233               25             (32)           1,226
 Equity securities .............................          3,926              178            (381)           3,723
                                                    -------------    -------------  --------------   --------------
                                                    $   100,702      $     2,102    $     (2,666)    $    100,138
                                                    =============    =============  ==============   ==============
 December 31, 2000
 Debt securities:
  U.S. corporate ...............................    $    39,078      $       459    $     (1,282)    $     38,255
  State and municipal ..........................         13,272              499            (139)          13,632
  Mortgage-backed ..............................         13,683              323            (160)          13,846
  Corporate - non-U.S. .........................         12,640              374            (168)          12,846
  Government - non-U.S. ........................          5,059              104            (108)           5,055
  U.S. government and federal agency ...........          2,106               15             (42)           2,079
 Equity securities .............................          4,392              703            (478)           4,617
                                                    -------------    -------------  --------------   --------------
                                                    $    90,230      $     2,477    $     (2,377)    $     90,330
                                                    =============    =============  ==============   ==============
</TABLE>

A substantial portion of mortgage-backed securities shown in the table above are
collateralized by U.S. residential mortgages.

At December 31,  2001,  contractual  maturities  of debt  securities,  excluding
mortgage-backed securities, were as follows:
<TABLE>
<CAPTION>
                                                                                    Amortized          Estimated
 (In millions)                                                                         cost            fair value
                                                                                  ----------------   ----------------
<S>                                                                               <C>                 <C>
 Due in:
 2002 .........................................................................   $      5,184        $     5,244
 2003-2006 ....................................................................         17,382             17,293
 2007-2011 ....................................................................         20,858             20,600
 2012 and later ...............................................................         36,910             36,502
</TABLE>

It is expected that actual  maturities will differ from  contractual  maturities
because borrowers have the right to call or prepay certain obligations.

Supplemental  information  about gross  realized  gains and losses on investment
securities follows.

<TABLE>
<CAPTION>
  (In millions)                                       2001                   2000                   1999
                                               -------------------     -----------------    -------------------
<S>                                            <C>                     <C>                  <C>
  Gains (a)..................................  $       1,800           $       3,581        $       1,406
  Losses.....................................           (838)                   (714)                (484)
                                               -------------------     -----------------    -------------------
            Net..............................  $         962           $       2,867        $         922
                                               ===================     =================    ===================
</TABLE>

     (a)  Includes $1,366 million,  in 2000, from the sale of GECS investment in
          common stock of Paine Webber Group, Inc.

Proceeds  from  sales of  investment  securities  in 2001 were  $39,512  million
($24,711 million in 2000 and $18,500 million in 1999).


<PAGE>
                                       36


NOTE 3. FINANCING RECEIVABLES

Financing receivables at December 31, 2001 and 2000, are shown below.

<TABLE>
<CAPTION>
 (In millions)                                                                         2001             2000
                                                                                  --------------   --------------
<S>                                                                               <C>              <C>
 Time sales and loans:
  Consumer Services ...........................................................   $   45,741       $   43,954
  Equipment Management ........................................................        2,391            1,385
  Mid-Market Financing ........................................................       57,600           35,436
  Specialized Financing .......................................................       16,913           14,567
  Other........................................................................           41              928
                                                                                  --------------   --------------
    Time sales and loans - net of deferred income .............................      122,686           96,270
                                                                                  --------------   --------------
 Investment in financing leases:
  Direct financing leases .....................................................       49,412           46,186
  Leveraged leases ............................................................        6,735            4,877
                                                                                  --------------   --------------
    Investment in financing leases - net of deferred income....................       56,147           51,063
                                                                                  --------------   --------------
                                                                                     178,833          147,333
 Less allowance for losses (note 4) ...........................................       (4,801)          (4,034)
                                                                                  --------------   --------------
    Net investment.............................................................   $  174,032       $  143,299
                                                                                  ==============   ==============
</TABLE>

Time sales and loans  represents  transactions in a variety of forms,  including
time  sales,  revolving  charge  and  credit,   mortgages,   installment  loans,
intermediate-term  loans and  revolving  loans secured by business  assets.  The
portfolio includes time sales and loans carried at the principal amount on which
finance  charges are billed  periodically,  and time sales and loans  carried at
gross book value,  which includes  finance  charges.  At year-end 2001 and 2000,
commercial real estate loans and leases of $25,466 million and $21,329  million,
respectively,  were  included  in  either  financing  receivables  or  insurance
receivables. Note 6 contains information on commercial airline loans and leases.

Investment in financing leases consists of direct financing and leveraged leases
of aircraft, railroad rolling stock, autos, other transportation equipment, data
processing  equipment  and medical  equipment,  as well as other  manufacturing,
power  generation,   commercial  real  estate,  and  commercial   equipment  and
facilities.

As the sole  owner of assets  under  direct  financing  leases and as the equity
participant  in  leveraged  leases,  the  Corporation  is taxed  on total  lease
payments  received and is entitled to tax deductions based on the cost of leased
assets and tax  deductions for interest paid to  third-party  participants.  The
Corporation is generally entitled to any residual value of leased assets.

Investment  in direct  financing  and  leveraged  leases  represents  net unpaid
rentals and estimated  unguaranteed  residual values of leased  equipment,  less
related deferred income. The Corporation has no general obligation for principal
and   interest  on  notes  and  other   instruments   representing   third-party
participation related to leveraged leases; such notes and other instruments have
not been  included  in  liabilities  but have been  offset  against  the related
rentals  receivable.  The Corporation's share of rentals receivable on leveraged
leases is subordinate to the share of other  participants who also have security
interests in the leased equipment.


<PAGE>
                                       37


The  Corporation's  net investment in financing  leases at December 31, 2001 and
2000, is shown below.
<TABLE>
<CAPTION>

                                         Total financing leases     Direct financing leases       Leveraged leases
                                        ------------------------- -------------------------  ------------------------
  (In millions)                              2001         2000         2001         2000         2001         2000
                                        ------------ ------------ ------------  -----------  -----------  -----------
 <S>                                     <C>          <C>          <C>           <C>          <C>          <C>
 Total minimum lease payments
   receivable ........................  $   83,316   $   74,960   $   53,870    $   50,556   $   29,446   $   24,404
 Less principal and interest on
   third-party nonrecourse debt ......     (22,588)     (19,773)           -             -      (22,588)     (19,773)
                                        ------------ ------------ ------------  -----------  -----------  -----------
   Net rentals receivable ............      60,728       55,187       53,870        50,556        6,858        4,631
 Estimated unguaranteed residual value
   of leased assets ..................       8,996        7,314        5,544         4,602        3,452        2,712
 Less deferred income ................     (13,577)     (11,438)     (10,002)       (8,972)      (3,575)      (2,466)
                                        ------------ ------------ ------------  -----------  -----------  -----------
   Investment in financing leases ....      56,147       51,063       49,412        46,186        6,735        4,877
 Less: Allowance for losses ..........        (679)        (646)        (606)         (558)         (73)         (88)
       Deferred taxes arising from
         financing leases ............      (9,168)      (8,408)      (4,643)       (4,496)      (4,525)      (3,912)
                                        ------------ ------------ ------------  -----------  -----------  -----------
 Net investment in financing leases ..  $   46,300   $   42,009   $   44,163    $   41,132   $    2,137   $      877
                                        ============ ============ ============  ===========  ===========  ===========
</TABLE>

Contractual Maturities

At December 31, 2001, the  Corporation's  contractual  maturities for time sales
and loans and net rentals receivable were:

                                        Total time
  (In millions)                          sales and        Net rentals
                                         loans (a)       receivable (a)
                                      --------------    ---------------
  Due in:
  2002 ............................   $     39,162      $      15,303
  2003.............................         22,585             13,116
  2004 ............................         19,723              9,057
  2005 ............................         10,247              6,284
  2006 ............................          7,729              3,520
  2007 and later ..................         23,240             13,448
                                      --------------    ---------------
                                      $    122,686      $      60,728
                                      ==============    ===============

(a)  Experience has shown that a substantial portion of receivables will be paid
     prior to contractual maturity,  and these amounts should not be regarded as
     forecasts of future cash flows.

Nonearning  consumer  receivables  were  $1,540  million  and $1,139  million at
December 31, 2001 and 2000,  respectively,  a  substantial  amount of which were
private-label  credit card loans.  Nonearning  and  reduced-earning  receivables
other than consumer receivables were $1,734 million and $949 million at year-end
2001 and 2000, respectively.

"Impaired"  loans are defined by generally  accepted  accounting  principles  as
large  balance  loans for which it is probable that the lender will be unable to
collect all  amounts due  according  to original  contractual  terms of the loan
agreement.

An analysis of impaired loans at December 31, 2001 and 2000, is shown below.

(In millions)                                        2001              2000
                                               -------------      ------------
 Loans requiring allowance for losses .......  $     1,041        $     475
 Loans expected to be fully recoverable .....          574              384
                                               -------------      ------------
                                               $     1,615 (a)    $     859
                                               =============      ============
 Allowance for losses .......................  $       422        $     166
 Average investment during year .............        1,121              801
 Interest income earned while impaired (b) ..           17               20

(a)  Includes $408 million of loans  classified as impaired by Heller  Financial
     which was acquired in October, 2001.
(b)  Recognized principally on cash basis.



<PAGE>
                                       38


NOTE 4. ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES

<TABLE>
<CAPTION>
(In millions)                                                          2001             2000             1999
                                                                  --------------   -------------    --------------
<S>                                                               <C>             <C>              <C>
 Balance at January 1 .........................................    $    4,034      $     3,708      $      3,223
 Provisions charged to operations .............................         2,481            2,045             1,671
 Net transfers primarily related to acquisitions and sales ....           564               22               271
 Amounts written off - net ....................................        (2,278)          (1,741)           (1,457)
                                                                  --------------   -------------    --------------
 Balance at December 31 .......................................    $    4,801      $     4,034      $      3,708
                                                                  ==============   =============    ==============
</TABLE>

NOTE 5. INSURANCE RECEIVABLES

At  year-end  2001  and  2000,   insurance   receivables   included  reinsurance
recoverables  of $12,606 million and $8,240 million and receivables at insurance
affiliates of $14,711 million and $15,562 million, respectively.  Receivables at
insurance  affiliates  include  premium  receivables,  investments in whole real
estate and other loans, policy loans and funds on deposit with reinsurers.

NOTE 6. EQUIPMENT ON OPERATING LEASES

Equipment on operating leases by type of equipment and accumulated amortization
at December 31, 2001 and 2000, are shown below.

(In millions)                                           2001           2000
                                                  -------------  -------------
 Original cost
   Aircraft...................................... $     16,173   $     12,888
   Vehicles .....................................       10,779          9,872
   Railroad rolling stock .......................        3,439          3,459
   Marine shipping containers ...................        1,618          2,196
   Mobile and modular structures.................        1,325          1,288
   Information technology equipment..............        1,321          1,069
   Construction and manufacturing equipment......          799            591
   Scientific, medical and other equipment ......        1,001            685
                                                  -------------  -------------
                                                        36,455         32,048
 Accumulated amortization .......................       (9,135)        (7,901)
                                                  -------------  -------------
                                                  $     27,320   $     24,147
                                                  =============  =============

Amortization of equipment on operating leases was $2,958 million, $2,620 million
and $2,673 million in 2001, 2000 and 1999,  respectively.  Noncancelable  future
rentals due from  customers for  equipment on operating  leases at year-end 2001
totaled $16,072 million and are due as follows:  $3,954 million in 2002;  $3,183
million in 2003;  $2,396 million in 2004; $1,749 million in 2005; $1,245 million
in 2006 and $3,545 million thereafter.

The Corporation acts as a lender and lessor to the commercial  airline industry.
At December  31,  2001 and 2000,  the balance of such loans and leases was $21.5
billion and $15.3 billion,  respectively. In addition, at December 31, 2001, the
Corporation  had issued  financial  guarantees  and funding  commitments of $0.9
billion ($0.6 billion at year-end 2000), credit and liquidity support agreements
to special purpose  entities  sponsored by the Corporation of $0.9 billion ($0.6
billion at year-end 2000) and had placed  multi-year  orders for various Boeing,
Airbus and other aircraft with list prices of approximately $19.9 billion ($22.9
billion at year-end 2000).

NOTE 7. BUILDINGS AND EQUIPMENT

Buildings and  equipment  include  office  buildings,  satellite  communications
equipment,   computer  hardware,   vehicles,  furniture  and  office  equipment.
Depreciation  expense was $493  million in 2001,  $694  million in 2000 and $500
million in 1999.


<PAGE>
                                       39


NOTE 8. INTANGIBLE ASSETS

Intangible assets at December 31, 2001 and 2000, are shown in the table below.

 (In millions)                                         2001           2000
                                                  ------------   ------------
 Goodwill .....................................   $    15,933    $    11,550
 Present value of future profits ("PVFP") .....         2,198          2,780
 Other intangibles ............................           586            687
                                                  ------------   ------------
                                                  $    18,717    $    15,017
                                                  ============   ============

The Corporation's intangible assets are shown net of accumulated amortization of
$6,954 million at December 31, 2001, and $5,815 million at December 31, 2000.

The amount of  goodwill  amortization  included in net  earnings  (net of income
taxes) in 2001, 2000 and 1999, was $552 million,  $620 million and $512 million,
respectively.

PVFP  amortization,  which is on an  accelerated  basis and net of interest,  is
projected to range from 13% to 6% of the year-end 2001  unamortized  balance for
each of the next five years.

NOTE 9. OTHER ASSETS

Other assets at December 31, 2001 and 2000 are shown in the table below.

(In millions)                                         2001             2000
                                               --------------   --------------
Investments:
 Associated companies (a) ...................  $     14,415     $     12,785
 Real estate.................................         8,141            6,496
 Assets acquired for resale .................         1,725            1,394
 Other ......................................         5,222            5,207
                                               --------------   --------------
                                                     29,503           25,882
 Separate accounts ..........................        10,403           11,705
 Deferred insurance acquisition costs .......         6,768            5,815
 Derivative instruments (b)..................         2,066              314
 Servicing assets (c) .......................         1,139            1,449
 Other ......................................         5,209            5,201
                                               --------------   --------------
                                               $     55,088     $     50,366
                                               ==============   ==============

(a)  Includes  advances  to  associated   companies  which  are  non-controlled,
     non-consolidated equity investments.
(b)  Amounts at December 31, 2001,  are stated at fair value in accordance  with
     SFAS 133;  corresponding  amounts  at  December  31,  2000,  are  stated at
     amortized  cost.  See note 20 for a  discussion  of the  types  and uses of
     derivative instruments.
(c)  Associated  primarily with serviced residential mortgage loans amounting to
     $59 billion and $81 billion at December 31, 2001 and 2000, respectively.

Separate  accounts  represent  investments  controlled by policyholders  and are
associated with identical amounts reported as insurance liabilities in note 11.

NOTE 10. BORROWINGS

Total short-term borrowings at December 31, 2001 and 2000, consisted of the
following:
<TABLE>
<CAPTION>
                                                              2001                             2000
                                                 -------------------------------- --------------------------------
 (In millions)                                       Amount       Average rate (a)     Amount      Average rate (a)
                                                 ---------------  --------------- ---------------  ---------------
<S>                                              <C>                   <C>        <C>                   <C>
 Commercial paper - U.S. ....................... $     100,170         2.21%      $      77,525         6.67%
 Commercial paper - non-U.S. ...................        17,289         3.36              16,965         5.46
 Current portion of long-term debt .............        30,952         5.08              19,283         5.95
 Other .........................................        12,590                           10,219
                                                 ---------------                  ---------------
                                                 $     161,001                    $     123,992
 Foreign currency loss (b)......................          (157)                               -
                                                 ---------------                  ---------------
                                                 $     160,844                    $     123,992
                                                 ===============                  ===============
</TABLE>

<PAGE>
                                       40


Total long-term borrowings at December 31, 2001 and 2000, were as follows:
<TABLE>
<CAPTION>
                                                                           2001                        2000
                                                            ----------------------------------- -----------------
  (In millions)                                Maturities        Amount       Average rate (a)         Amount
                                             -------------  ---------------- -----------------  -----------------
<S>                                           <C>           <C>                    <C>          <C>
 Senior notes ...............................  2003-2055    $       78,347         4.89%        $      80,383
 Subordinated notes (c) .....................  2006-2035             1,171         7.74                   996
                                                            ----------------                    -----------------
                                                            $       79,518                      $      81,379
 Foreign currency loss (b)...................                         (427)                                 -
                                                            ----------------                    -----------------
                                                            $       79,091                      $      81,379
                                                            ================                    =================
</TABLE>
(a)  Based on year-end  balances and year-end  local  currency  interest  rates,
     including the effects of related  interest rate and currency swaps, if any,
     directly associated with the original debt issuance.
(b)  Borrowings in 2001 exclude the foreign exchange effects of related currency
     swaps in accordance with the provisions of SFAS 133.
(c)  At  year-end  2001 and  2000,  $996  million  of  subordinated  notes  were
     guaranteed by GE.

Borrowings of the Corporation  are addressed as follows from two  perspectives -
liquidity  and  interest  rate risk  management.  Additional  information  about
borrowings and associated swaps can be found in note 20.

Liquidity requirements of the Corporation are principally met through the credit
markets.  Maturities  of  long-term  borrowings  during  the  next  five  years,
including  the current  portion of long-term  debt,  at December 31, 2001,  were
$30,795  million  in 2002;  $25,713  million in 2003;  $14,630  million in 2004;
$9,907 million in 2005 and $6,469 million in 2006.

Committed  credit lines of $4.7  billion had been  extended to GE by 22 banks at
year-end 2001. All of GE's credit lines are available to the Corporation and its
affiliates in addition to their own credit lines.

At year-end 2001, the  Corporation  held committed  lines of credit  aggregating
$28.6 billion,  including $12.2 billion of revolving credit agreements  pursuant
to which it has the right to borrow funds for periods  exceeding  one year.  The
Corporation  compensates  banks for credit facilities in the form of fees, which
were insignificant in each of the past three years.

Interest  rate risk is managed by the  Corporation  in light of the  anticipated
behavior,  including prepayment  behavior,  of assets in which debt proceeds are
invested.  A variety of instruments,  including interest rate and currency swaps
and  currency  forwards,  are  employed to achieve  management's  interest  rate
objectives. Effective interest rates are lower under these "synthetic" positions
than could have been achieved by issuing debt directly.

The following table shows the Corporation's  borrowing positions at December 31,
2001 and 2000, considering the effects of currency and interest rate swaps.
<TABLE>
<CAPTION>
                                                                2001                           2000
                                                --------------------------------------  -------------------
(In millions)                                         Amount           Average Rate           Amount
                                                ------------------   -----------------  -------------------
<S>                                             <C>                        <C>          <C>
Effective borrowings (including swaps)
Short-term  (a)...............................  $      101,101             2.56%        $       80,162
                                                ==================                      ===================
Long-term (including current portion)
  Fixed rate (b) .............................  $      105,387             5.59         $       98,905
  Floating rate ..............................          34,031             3.23                 26,304
                                                ------------------                      -------------------
Total long-term ..............................  $      139,418                          $      125,209
                                                ==================                      ===================
</TABLE>

(a)  Includes commercial paper and other short-term debt.
(b)  Includes  fixed rate  borrowings  and $28.9 billion ($24.5 billion in 2000)
     notional  long-term  interest  rate  swaps  that  effectively  convert  the
     floating-rate nature of short-term borrowings to fixed rates of interest.

At December 31, 2001, swap maturities ranged from 2002 to 2048.
<PAGE>
                                       41



NOTE 11. INSURANCE LIABILITIES, RESERVES AND ANNUITY BENEFITS

Insurance liabilities, reserves and annuity benefits at December 31, 2001 and
2000, are shown below.

<TABLE>
<CAPTION>
  (In millions)                                                                    2001             2000
                                                                              --------------   --------------
<S>                                                                           <C>              <C>
  Investment contracts and universal life benefits ........................   $      39,052    $      33,232
  Life insurance benefits (a) .............................................          31,198           32,288
  Unpaid claims and claims adjustment expenses (b).........................          27,233           22,886
  Unearned premiums .......................................................           6,337            6,039
  Separate accounts (see note 9) ..........................................          10,403           11,705
                                                                              --------------   --------------
                                                                              $     114,223    $     106,150
                                                                              ==============   ==============
</TABLE>

(a)  Life  insurance  benefits are accounted  for mainly by a  net-level-premium
     method using estimated yields generally  ranging from 2% to 9% in both 2001
     and 2000.
(b)  Principally  property  and  casualty  reserves;  includes  amounts for both
     reported  and  incurred-but-not-reported  claims,  reduced  by  anticipated
     salvage and subrogation  recoveries.  Estimates of liabilities are reviewed
     and updated  continually,  with  changes in estimated  losses  reflected in
     operations.

When the Corporation cedes insurance to third parties, it is not relieved of its
primary  obligation to policyholders.  Losses on ceded risks give rise to claims
for recovery; allowances for probable losses are established on such receivables
from reinsurers as required.

The insurance liability for unpaid claims and claims adjustment expenses related
to policies  that may cover  environmental  and  asbestos  exposures is based on
known  facts  and an  assessment  of  applicable  law and  coverage  litigation.
Liabilities are recognized for both known and unasserted  claims  (including the
cost of related  litigation)  when sufficient  information has been developed to
indicate that a claim has been  incurred and a range of potential  losses can be
reasonably estimated. Developed case law and adequate claim history do not exist
for certain claims  principally due to significant  uncertainties as to both the
level of  ultimate  losses  that will occur and what  portion,  if any,  will be
deemed to be insured amounts.

A summary of activity  affecting unpaid claims and claims  adjustment  expenses,
principally in property and casualty lines follows.
<TABLE>
<CAPTION>

(In millions)                                                            2001             2000             1999
                                                                  ---------------  --------------   --------------
<S>                                                              <C>              <C>              <C>
Balance at January 1 - gross ...................................  $     22,886     $      21,473    $      19,611
Less reinsurance recoverables ..................................        (5,477)           (4,832)          (3,483)
                                                                  ---------------  --------------   --------------
Balance at January 1 - net .....................................        17,409            16,641           16,128
Claims and expenses incurred:
   Current year ................................................         9,199             9,718            6,917
   Prior years .................................................           682               607              248
Claims and expenses paid:
   Current year ................................................        (3,021)           (3,704)          (2,508)
   Prior years .................................................        (6,694)           (6,572)          (5,162)
Claim reserves related to acquired companies ...................             -               488              929
Other ..........................................................           258               231               89
                                                                  ---------------  --------------   --------------
Balance at December 31 - net ...................................        17,833            17,409           16,641
Add reinsurance recoverables ...................................         9,400             5,477            4,832
                                                                  ---------------  --------------   --------------
Balance at December 31 - gross .................................  $     27,233     $      22,886    $      21,473
                                                                  ===============  ==============   ==============
</TABLE>

Prior-year  claims  and  expenses  incurred  in  the  preceding  table  resulted
principally  from settling  claims  established  in earlier  accident  years for
amounts that differed from expectations.

The majority of the adverse development in 2001, and to a lesser extent in 2000,
related to higher projected ultimate losses for liability coverages,  especially
in the hospital liability, nonstandard automobile (automobile insurance extended
to higher risk  drivers) and public  entity  lines of business.  The increase in
2000 also  reflected  an increase in  industry-wide  loss  estimates  related to
certain large property loss events,  with the largest impact  resulting from the
European windstorms occurring in late 1999. In 1999, the unfavorable development
was primarily the result of large loss events,  including the significant impact
of Hurricane  George,  which  occurred in 1998.  The adverse  development  of GE
Global  Insurance  Holdings for all years was  partially  mitigated by favorable
experience  in the Mortgage  Insurance  business,  particularly  in 1999,  which
resulted from favorable economic conditions,  improvement in certain real estate
markets and loss mitigation efforts.


<PAGE>
                                       42


Financial  guarantees  and credit life risk of insurance  affiliates at December
31, 2001 and 2000, are summarized below.

<TABLE>
<CAPTION>
(In millions)                                                                             2001             2000
                                                                                    --------------   --------------
<S>                                                                                 <C>              <C>
Guarantees, principally on municipal bonds and asset-backed securities ..........   $     215,874    $     194,061
Mortgage insurance risk in force ................................................          79,892           68,112
Credit life insurance risk in force .............................................          16,590           19,910
Less reinsurance ................................................................         (41,148)         (42,143)
                                                                                    --------------   --------------
                                                                                    $     271,208    $     239,940
                                                                                    ==============   ==============
</TABLE>

Certain  GECS  insurance  affiliates  offer  insurance  guaranteeing  the timely
payment of  scheduled  principal  and  interest on  municipal  bonds and certain
asset-backed  securities.  These insurance  affiliates also provide insurance to
protect  residential  mortgage  lenders from severe financial loss caused by the
non-payment of loans and issue credit life insurance designed to pay the balance
due on a loan if the borrower  dies before the loan is repaid.  As part of their
overall risk management process, GECS insurance affiliates cede to third parties
a portion of their risk associated with these guarantees.  In doing so, they are
not relieved of their primary obligation to policyholders.

The effects of reinsurance on premiums written and premium and commission income
were as follows:
<TABLE>
<CAPTION>
                                 Premiums written                           Premium and commission income
                   ----------------------------------------------   ----------------------------------------------
(In millions)           2001            2000            1999             2001            2000            1999
                   --------------  --------------  --------------   --------------  --------------  --------------
<S>                <C>             <C>             <C>              <C>             <C>             <C>
Direct .........   $      9,958    $      9,390    $      7,382     $      9,912    $      9,026    $      7,002
Assumed ........          9,603           9,552           8,520            9,471           9,643           8,460
Ceded ..........         (3,718)         (2,481)         (2,278)          (3,749)         (2,576)         (2,514)
                   --------------  --------------  --------------   --------------  --------------  --------------
Net ............   $     15,843    $     16,461    $     13,624     $     15,634    $     16,093    $     12,948
                   ==============  ==============  ==============   ==============  ==============  ==============
</TABLE>

Reinsurance  recoveries  recognized  as a  reduction  of  insurance  losses  and
policyholder and annuity benefits amounted to $5,863 million, $3,232 million and
$2,648  million  for  the  years  ended  December  31,  2001,   2000  and  1999,
respectively.

NOTE 12. MINORITY INTEREST

Minority interest in equity of consolidated  affiliates includes preferred stock
issued by GE Capital  and by  affiliates  of GE  Capital.  The  preferred  stock
primarily pays cumulative  dividends at variable  rates.  Value of the preferred
shares is summarized below.

(In millions)                                2001             2000
                                       --------------   --------------
GE Capital .........................   $     2,600      $     2,600
GE Capital affiliates...............         1,446            1,066

Dividend  rates in local  currency on the  preferred  stock ranged from 1.62% to
6.40% during 2001 and from 4.15% to 6.82% during 2000.




<PAGE>
                                       43



NOTE 13. SHARE OWNERS' EQUITY

Changes  in  share  owners'  equity  for each of the last  three  years  were as
follows:

<TABLE>
<CAPTION>
(In millions)                                                        2001            2000            1999
                                                               --------------  --------------  --------------
<S>                                                            <C>             <C>             <C>
Cumulative Preferred Stock Issued ..........................   $          10   $        10     $        10
                                                               --------------  --------------  --------------
Common Stock Issued ........................................               1             1               1
                                                               --------------  --------------  --------------
Accumulated nonowner changes other than earnings
Balance at January 1 .......................................            (953)         (214)          2,161
Cumulative effect of adopting SFAS 133 -
   net of deferred taxes of ($525)..........................            (849)            -               -
Investment securities -
   net of deferred taxes of $147, $865 and ($868)...........             273         1,698          (1,578)
Currency translation adjustments -
   net of deferred taxes of $63, ($309) and ($91)...........             117          (573)           (169)
Derivatives qualifying as hedges -
   net of deferred taxes of ($448)..........................            (577)            -               -
Reclassification adjustments -
   Investment securities - net of deferred
      taxes of ($337), ($1,003) and ($341) .................            (625)       (1,864)           (628)
   Derivatives qualifying as hedges -
      net of deferred taxes of $386.........................             536             -               -
                                                               --------------  --------------  --------------
Balance at December 31 .....................................          (2,078)         (953)           (214)
                                                               --------------  --------------  --------------
Other Capital
Balance at January 1 .......................................           2,742         2,672           2,480
Contributions ..............................................           3,237            70             192
                                                               --------------  --------------  --------------
Balance at December 31 .....................................           5,979         2,742           2,672
                                                               --------------  --------------  --------------
Retained Earnings
Balance at January 1 .......................................          21,222        17,852          15,075
Net earnings ...............................................           5,417         5,192           4,443
Dividends ..................................................          (1,961)       (1,822)         (1,666)
                                                               --------------  --------------  --------------
Balance at December 31 .....................................          24,678        21,222          17,852
                                                               --------------  --------------  --------------
Total Share Owners' Equity .................................   $      28,590   $    23,022     $    20,321
                                                               ==============  ==============  ==============
</TABLE>

The  Corporation's  outstanding  preferred  stock  amounted  to $510  million at
December 31, 2001,  all of which was held by  consolidated  affiliates  with the
exception of $10 million of such shares,  which were dividended to GE Company in
1994. All other equity is owned entirely by GE Company and an affiliate.

The  Corporation's  common  stock was split on a ten for one basis  ($1,000  par
value) on July 22, 1999 and the Corporation  also authorized  additional  common
stock, accomplished through an amendment to its Certificate of Incorporation. As
a result  of the  common  stock  split,  GE  Company  owns  1,010  shares of the
Corporation's common stock. On July 26, 1999, the Corporation issued 2 shares of
its common  stock to MRA  Systems,  Inc. (a GE Company  affiliate)  in a private
placement,  pursuant to a Share Exchange  Agreement,  dated as of July 22, 1999,
between the Corporation and MRA Systems, Inc., a Delaware corporation.

Changes in fair value of available-for-sale investment securities are reflected,
net of applicable taxes and other adjustments,  in equity. The changes from year
to year were primarily attributable to the effects of changes in year-end market
interest rates on the fair value of the securities.
<PAGE>
                                       44

NOTE 14. OPERATING AND ADMINISTRATIVE EXPENSES

Employees and retirees of the Corporation are covered under a number of pension,
health and life insurance  plans.  The principal  pension plan is the GE Company
Pension Plan, a defined benefit plan, while employees of certain  affiliates are
covered under separate plans. The Corporation provides health and life insurance
benefits to certain of its retired employees,  principally  through GE Company's
benefit  program,  as well as through plans sponsored by other  affiliates.  The
annual cost to the Corporation of providing these benefits is not material.

Rental expense relating to equipment the Corporation  leases from others for the
purpose of  subleasing  was $400 million in 2001,  $496 million in 2000 and $484
million in 1999.  Other rental expense was $606 million in 2001, $680 million in
2000 and $583  million in 1999,  principally  for the rental of office space and
data processing equipment. Minimum future rental commitments under noncancelable
leases at  December  31, 2001 are $5,179  million;  $997  million in 2002;  $680
million in 2003;  $601 million in 2004;  $636  million in 2005;  $407 million in
2006 and  $1,858  million  thereafter.  The  Corporation,  as a  lessee,  has no
material lease agreements classified as capital leases.

Amortization of deferred  insurance  acquisition  costs charged to operations in
2001,  2000 and 1999 was $2,490  million,  $2,787  million  and $2,545  million,
respectively.

NOTE 15. INCOME TAXES

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

<TABLE>
<CAPTION>
   (In millions)                                                         2001            2000             1999
                                                                  --------------- ---------------  ---------------
<S>                                                               <C>              <C>             <C>
   Current tax expense ...........................................$         517    $       1,229   $         806
   Deferred tax expense from temporary differences ...............          863              683             847
                                                                  ---------------  --------------  ---------------
                                                                  $       1,380    $       1,912   $       1,653
                                                                  ===============  ==============  ===============
</TABLE>

GE Company files a  consolidated  U.S.  federal income tax return which includes
the  Corporation.  The provision for current tax expense  includes the effect of
the Corporation on the consolidated return.

Current tax expense (benefit) includes amounts applicable to U.S. federal income
taxes of ($125) million, $443 million and ($126) million in 2001, 2000 and 1999,
respectively,  and amounts applicable to non-U.S. jurisdictions of $606 million,
$707 million and $844 million in 2001, 2000 and 1999, respectively. Deferred tax
expense related to U.S. federal income taxes was $803 million,  $655 million and
$810 million in 2001, 2000 and 1999, respectively.

Deferred income tax balances reflect the impact of temporary differences between
the  carrying  amounts  of assets  and  liabilities  and their tax bases and are
stated at enacted tax rates  expected  to be in effect  when taxes are  actually
paid or recovered.

Except  for  certain   earnings  that  the   Corporation   intends  to  reinvest
indefinitely,  provision has been made for the estimated U.S. federal income tax
liabilities  applicable to  undistributed  earnings of affiliates and associated
companies.  It is not  practicable  to  determine  the U.S.  federal  income tax
liability,  if any, that would be payable if such  earnings were not  reinvested
indefinitely.

U.S.  income before taxes and cumulative  effect of accounting  changes was $3.1
billion  in  2001,   $3.8  billion  in  2000  and  $3.5  billion  in  1999.  The
corresponding  amounts for non-U.S.  based operations were $3.9 billion in 2001,
$3.3 billion in 2000 and $2.6 billion in 1999.

A  reconciliation  of the U.S.  federal  statutory rate to the actual income tax
rate follows.
<TABLE>
<CAPTION>
                                                                       2001            2000            1999
                                                                  ---------------  -------------  --------------
<S>                                                                    <C>              <C>             <C>
  Statutory U.S. federal income tax rate ........................      35.0%            35.0%          35.0%
  Increase (reduction) in rate resulting from:
    Amortization of goodwill ....................................       0.9              1.1            1.0
    Tax-exempt income ...........................................      (3.8)            (4.0)          (4.4)
    Tax on international activities including exports............      (6.7)            (5.8)          (4.8)
    Americom / Rollins goodwill..................................      (3.2)               -             -
    Other - net .................................................      (2.4)             0.6            0.3
                                                                  ---------------  -------------  --------------
  Actual income tax rate ........................................      19.8%            26.9%          27.1%
                                                                  ===============  =============  ==============
</TABLE>
<PAGE>
                                       45


Principal  components of the net deferred tax liability balances at December 31,
2001 and 2000, were as follows:

(In millions)                                        2001                2000
                                             ----------------    ---------------
Assets:
   Allowance for losses ...................  $        2,139      $       1,684
   Insurance reserves .....................           1,397              1,270
   AMT credit carryforwards................             695                671
   Other ..................................           4,354              3,684
                                             ----------------    ---------------
   Total deferred tax assets ..............  $        8,585      $       7,309
                                             ----------------    ---------------
Liabilities:
   Financing leases .......................           9,168              8,408
   Operating leases .......................           3,399              3,301
   Deferred insurance acquisition costs....           1,360                856
   Other ..................................           2,775              2,982
                                             ----------------    ---------------
   Total deferred tax liabilities .........          16,702             15,547
                                             ----------------    ---------------
   Net deferred tax liability .............  $        8,117      $       8,238
                                             ================    ===============

NOTE 16. OPERATING SEGMENT DATA

The  Corporation's  operating  segments  are  organized  based on the  nature of
products and services  provided.  A description of the operating segments can be
found in Item 1. Business under the heading Operating Segments on page 2 of this
report.  The  accounting  policies  for  these  segments  are the  same as those
described for the consolidated entity. The Corporation evaluates the performance
of its operating  segments  primarily on the basis of earnings before accounting
changes.  Details of total revenues and earnings  before  accounting  changes by
operating segment are provided in Item 7.  Management's  Discussion and Analysis
of Results of  Operations  in the tables  beginning  on page 15 of this  report.
Other specific information is provided as follows.

<TABLE>
<CAPTION>
(In millions)                              Depreciation and amortization (a)          Provision for income taxes
                                         --------------------------------------  --------------------------------------
For the years ended December 31              2001         2000         1999         2001         2000          1999
                                         ------------ ------------  -----------  -----------  -----------  ------------
<S>                                      <C>          <C>           <C>          <C>          <C>          <C>
Consumer Services ..................     $     958    $   1,940     $   1,042    $     837    $     665    $     347
Equipment Management ...............         2,431        2,421         2,440          561          389          317
Mid-Market Financing ...............           969          728           568          462          370          396
Specialized Financing ..............            27           29            49           (6)         419          303
Specialty Insurance ................           143          179           164          (77)          33          345
All other ..........................            62          191           109         (397)          36          (55)
                                         ------------ ------------  -----------  -----------  -----------  ------------
   Total ...........................     $   4,590    $   5,488     $   4,372    $   1,380    $   1,912    $   1,653
                                         ============ ============  ===========  ===========  ===========  ============
</TABLE>
<PAGE>
                                       46


<TABLE>
<CAPTION>

                                        Time sales, loan, investment and other
                                                      income (b)                            Interest expense
                                        ----------------------------------------  --------------------------------------
For the years ended December 31               2001         2000         1999         2001         2000          1999
                                        -------------  -----------  ------------  -----------  -----------   -----------
<S>                                     <C>            <C>          <C>           <C>          <C>           <C>
Consumer Services .................     $    15,702    $  16,252    $  12,817     $   3,187    $   3,645     $   3,335
Equipment Management ..............           3,204        2,428        2,372         1,891        1,796         1,598
Mid-Market Financing ..............           5,043        4,087        3,551         3,558        3,159         2,469
Specialized Financing .............           2,367        3,656        2,734         1,573        1,651         1,358
Specialty Insurance ...............           2,772        2,875        2,727           632          711           580
All other .........................            (345)       1,507          251          (243)         149            19
                                        -------------  -----------  ------------  -----------  -----------   -----------
   Total ..........................     $    28,743    $  30,805    $  24,452     $  10,598    $  11,111     $   9,359
                                        =============  ===========  ============  ===========  ===========   ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                               Property, plant and equipment additions
                                                 Assets                       (including equipment leased to others)(c)
                                             At December 31                       For the years ended December 31
                                 ------------------------------------------   ------------------------------------------
                                      2001           2000          1999           2001            2000            1999
                                 -------------  ------------  -------------   -------------  ------------   ------------
<S>                             <C>             <C>           <C>            <C>            <C>            <C>
Consumer Services (d)........... $  166,648     $   161,607   $   149,139     $      572      $      764    $     2,337
Equipment Management (d) .......     52,708          48,573        43,617          9,594           8,298          8,011
Mid-Market Financing ...........    109,742          72,170        63,502          3,485           1,635          3,953
Specialized Financing (d).......     40,788          37,660        34,740             11             533            150
Specialty Insurance ............     58,741          52,108        47,926             10              39             30
All other ......................     (3,143)         (1,482)        6,094             72             165            951
                                 ------------   ------------  --------------  -------------   -----------   ------------
   Total ....................... $  425,484     $   370,636   $   345,018     $   13,744      $   11,434    $    15,432
                                 ============   ============  ==============  =============   ===========   ============
</TABLE>

(a)  Includes amortization of goodwill and other intangibles.
(b)  Principally interest income.
(c)  Additions to property,  plant and equipment  (including equipment leased to
     others) include amounts relating to principal businesses purchased.
(d)  Total assets of the Consumer Services, Equipment Management and Specialized
     Financing segments at December 31, 2001 include investments in and advances
     to non-consolidated affiliates of $4,636 million, $5,164 million and $3,857
     million,  respectively,  which contributed approximately $304 million, $233
     million and $17 million,  respectively,  to segment  pre-tax income for the
     year ended December 31, 2001.


<PAGE>
                                       47


NOTE 17. QUARTERLY FINANCIAL DATA (unaudited)

Summarized quarterly financial data were as follows:
<TABLE>
<CAPTION>
                                First quarter           Second quarter            Third quarter           Fourth quarter
                               --------------------  --------------------   -----------------------   ------------------------
 (In millions)                    2001       2000       2001       2000        2001        2000          2001         2000
                               ---------  ---------  ---------  ---------   ---------   -----------   -----------  -----------
<S>                            <C>        <C>        <C>        <C>        <C>         <C>           <C>          <C>
 Revenues .................... $ 14,723   $ 15,681   $ 14,399   $ 16,470    $ 13,298    $ 16,444 (b)  $ 15,933 (a) $ 17,582 (b)
                               ---------  ---------  ---------  ---------   ---------   -----------   -----------  -----------
 Expenses:
  Interest ...................    2,898      2,570      2,671      2,811       2,503       2,765         2,526        2,965
  Operating and
   administrative and cost of
   goods sold ................    5,130      6,922      4,826      6,964       4,147       6,617         5,529        7,487
  Insurance losses and
   policyholder and annuity
   benefits ..................    3,523      2,930      3,712      3,852       3,618       3,731         4,209        3,886
  Provision for losses on
   financing receivables .....      483        521        496        421         567         463           935          640
  Depreciation and
   amortization of buildings
   and equipment and
   equipment on operating
   leases ....................      793        942        797        672         924         792           937          908
  Minority interest in net
   earnings of consolidated
   affiliates ................       57         50         42         53          27          56            37           55
                               ---------  ---------  ---------  ---------   ---------   -----------   -----------  -----------
 Earnings before income taxes     1,839      1,746      1,855      1,697       1,512       2,020         1,760        1,641
 Provision for income taxes ..     (438)      (536)      (378)      (420)       (211)       (542)         (353)        (414)
                               ---------  ---------  ---------  ---------   ---------   -----------   -----------  -----------
 Earnings before accounting
   changes ................... $  1,401   $  1,210   $  1,477   $  1,277    $  1,301    $  1,478 (c)  $  1,407     $  1,227 (d)
                               =========  =========  =========  =========   =========   ===========   ===========  ===========
</TABLE>

(a)  Fourth  quarter  revenues in 2001 were  increased  by a gain on the sale of
     Americom of $1,158 million.
(b)  Third and fourth  quarter  revenues in 2000 were increased by the inclusion
     of  gains  related  to  PaineWebber  of  $369  million  and  $997  million,
     respectively.
(c)  Third  quarter net earnings in 2000 were  reduced by  after-tax  charges of
     $239  million.  Such  charges  were  primarily  included in  Operating  and
     administrative  and cost of goods  sold.  Also in the  third  quarter,  net
     earnings  were  increased by the  inclusion  of an  after-tax  gain of $226
     million related to PaineWebber.
(d)  Fourth  quarter net earnings in 2000 were  reduced by after-tax  charges of
     $645  million.  Such  charges  were  primarily  included in  Operating  and
     administrative  and cost of goods  sold.  Also in the fourth  quarter,  net
     earnings  were  increased by the  inclusion  of an  after-tax  gain of $622
     million related to PaineWebber.

NOTE 18. RESTRICTED NET ASSETS OF AFFILIATES

Certain  of  the  Corporation's  consolidated  affiliates  are  restricted  from
remitting  funds to the Parent in the form of dividends or loans by a variety of
regulations,   the   purpose   of  which  is  to  protect   affected   insurance
policyholders,  depositors or  investors.  At year-end  2001,  net assets of the
Corporation's  regulated  affiliates  amounted to $37.4 billion,  of which $31.7
billion was restricted.

At December 31, 2001 and 2000,  the aggregate  statutory  capital and surplus of
the insurance businesses totaled $17.7 billion and $16.2 billion,  respectively.
Accounting practices  prescribed by statutory  authorities are used in preparing
statutory statements.

NOTE 19. SUPPLEMENTAL CASH FLOWS INFORMATION

"All  other  operating  activities"  in the  Statement  of Cash  Flows  consists
primarily of  adjustments  to current and  noncurrent  accruals and deferrals of
costs and expenses,  adjustments  for gains and losses on assets,  increases and
decreases in assets held for sale, and adjustments to assets.


<PAGE>
                                       48


Certain supplemental information related to the Corporation's cash flows were as
follows for the past three years.

<TABLE>
<CAPTION>
  (In millions)                                                          2001             2000            1999
                                                                   ---------------   --------------  --------------
  Financing receivables
<S>                                                                <C>               <C>             <C>
  Increase in loans to customers ...............................   $   (140,758)     $   (100,938)   $    (95,201)
  Principal collections from customers - loans .................        121,004            87,432          86,379
  Investment in equipment for financing leases .................        (20,315)          (15,454)        (18,173)
  Principal collections from customers - financing leases ......         11,641             7,873          13,634
  Net change in credit card receivables ........................        (14,815)           (9,394)        (10,740)
  Sales of financing receivables ...............................         29,291            14,405          11,473
                                                                   ---------------   --------------  --------------
                                                                   $    (13,952)     $    (16,076)   $    (12,628)
                                                                   ===============   ==============  ==============
  All other investing activities
  Purchases of securities by insurance and annuity businesses ..   $    (53,452)     $    (35,911)   $    (26,271)
  Dispositions and maturities of securities by insurance and
   annuity businesses ..........................................         45,403            25,960          23,979
  Proceeds from principal business dispositions ................          2,572              (605)            279
  Other ........................................................         (2,080)           (1,617)         (6,270)
                                                                   ---------------   --------------  --------------
                                                                   $     (7,557)     $    (12,173)   $     (8,283)
                                                                   ===============   ==============  ==============
  Newly issued debt having maturities longer than 90 days
  Short-term (91 to 365 days) ...................................  $     12,622      $     12,782    $     15,799
  Long-term (longer than one year) ..............................        16,118            32,297          30,082
  Proceeds - nonrecourse, leveraged lease debt ..................         2,012             1,808           1,724
                                                                   ---------------   --------------  --------------
                                                                   $     30,752      $     46,887    $     47,605
                                                                   ===============   ==============  ==============
  Repayments and other reductions of debt having maturities
    longer than 90 days
  Short-term (91 to 365 days) ..................................   $    (29,195)     $    (27,777)   $    (21,211)
  Long-term (longer than one year) .............................         (6,582)           (3,953)         (5,447)
  Principal payments - nonrecourse, leveraged lease debt .......           (274)             (177)           (266)
                                                                   ---------------   --------------  --------------
                                                                   $    (36,051)     $    (31,907)   $    (26,924)
                                                                   ===============   ==============  ==============
  All other financing activities
  Proceeds from sales of investment contracts ..................   $      9,080      $      8,826    $      7,236
  Redemption of investment contracts ...........................         (7,033)           (9,061)         (7,127)
  Preferred stock issued by consolidated affiliates ............              -                 -             513
  Capital contributions from GE.................................          3,043                 -               -
  Cash received upon assumption of Toho Mutual Life Insurance
    Company insurance liabilities...............................              -            13,177               -
                                                                   ---------------   --------------  --------------
                                                                   $      5,090      $     12,942    $        622
                                                                   ===============   ==============  ==============
  Cash (paid) recovered during the year for:
  Interest .....................................................   $    (10,767)     $    (11,229)   $     (9,596)
  Income taxes .................................................            129              (800)           (351)
</TABLE>

Changes  in  operating  assets  and  liabilities  are  net of  acquisitions  and
dispositions of principal businesses.

"Payments for principal businesses  purchased" in the Statement of Cash Flows is
net of cash  acquired  and  includes  debt  assumed  and  immediately  repaid in
acquisitions. In conjunction with the acquisitions,  liabilities were assumed as
follows:

<TABLE>
<CAPTION>
(In millions)                                                            2001          2000           1999
                                                                      ----------    -----------   -----------
<S>                                                                   <C>           <C>           <C>
Fair value of assets acquired ....................................    $  36,007     $  10,544     $  16,208
Cash paid ........................................................      (11,980)       (1,230)      (10,075)
                                                                      ----------    -----------   -----------
Liabilities assumed ..............................................    $  24,027     $   9,314     $   6,133
                                                                      ==========    ===========   ===========
</TABLE>


<PAGE>
                                       49


NOTE 20. ADDITIONAL INFORMATION ABOUT CERTAIN FINANCIAL INSTRUMENTS

Assets  and  liabilities  that  are  reflected  in  the  accompanying  financial
statements  at fair value are not included in the  following  disclosures;  such
items include cash and equivalents,  investment  securities,  separate  accounts
and,  beginning  in 2001,  derivative  financial  instruments.  Other assets and
liabilities  - those not carried at fair value - are  discussed in the following
pages. Apart from certain borrowings by GECS and certain marketable  securities,
few of the instruments discussed below are actively traded and their fair values
must often be determined using models. Although management has made every effort
to develop the fairest  representation of fair value for this section,  it would
be unusual if the  estimates  could  actually have been realized at December 31,
2001 or 2000.

A description of how fair values are estimated follows.

Borrowings. Based on market quotes or comparables.

Time sales and loans. Based on quoted market prices,  recent transactions and/or
discounted future cash flows, using rates at which similar loans would have been
made to similar borrowers.

Investment contract benefits. Based on expected future cash flows, discounted at
currently  offered  discount  rates  for  immediate  annuity  contracts  or cash
surrender values for single premium deferred annuities.

Financial  guarantees  and credit  life.  Based on  expected  future cash flows,
considering expected renewal premiums, claims, refunds and servicing costs,
discounted at a current market rate.

All other  instruments.  Based on  comparable  market  transactions,  discounted
future  cash  flows,  quoted  market  prices,  and/or  estimates  of the cost to
terminate or otherwise settle obligations.

Financial Instruments
<TABLE>
<CAPTION>
                                                      2001                                              2000
                                  ---------------------------------------------  ------------------------------------------------
                                                    Assets (liabilities)                             Assets (liabilities)
                                              ---------------------------------               -----------------------------------
                                               Carrying   Estimated fair value                 Carrying     Estimated fair value
                                   Notional     amount    ---------------------   Notional      amount    -----------------------
(In millions)                       amount       (net)       High        Low       amount        (net)       High          Low
                                  ----------  ----------  ---------  ----------  ---------    ----------  ----------   ----------
<S>                               <C>         <C>         <C>       <C>          <C>          <C>         <C>          <C>
Assets
  Time sales and loans ...........$    (a)   $ 118,584   $ 119,986  $ 117,930    $    (a)    $  92,912   $  93,539    $  92,360
  Mortgages acquired for resale ..     (a)       1,596       1,631      1,596         (a)        1,267       1,250        1,245
  Other financial instruments ....     (a)       9,496       9,671      9,599         (a)       10,940      11,130       11,102
Liabilities
  Borrowings (b)(c) ..............     (a)    (240,519)   (244,069)  (244,069)        (a)     (205,371)   (207,670)    (207,670)
  Investment contract benefits....     (a)     (32,427)    (32,192)   (31,815)        (a)      (27,575)    (26,144)     (26,144)
  Insurance - financial
   guarantees and credit life (d). 271,208      (2,941)     (2,983)    (3,091)    239,940       (2,759)     (2,797)      (2,910)
  Other financial instruments.....   4,678        (629)       (590)      (590)      2,982       (1,184)     (1,114)      (1,114)
Special purpose entity support
  Credit and liquidity (e)(f).....  43,176        (712)       (712)      (712)     31,197         (630)       (630)        (630)
  Credit and liquidity - unused...   9,404           -           -          -       6,470            -           -            -
  Performance guarantees..........   3,759           -           -          -       2,870 (g)        -           -            -
   - unused.......................     441           -           -          -       1,330 (g)        -           -            -
Swap guarantees and other
   guarantees.....................   8,506           -           -          -       7,415 (g)        -           -            -
Other firm commitments
  Ordinary course of business
   lending commitments ...........   9,636           -           -          -       9,450            -           -            -
  Unused revolving credit lines
   Commercial ...................   27,770           -           -          -      19,372 (h)        -           -            -
   Consumer - principally
    credit cards ................  222,929           -           -          -     188,421            -           -            -
</TABLE>

(a)  These financial instruments do not have notional amounts.
(b)  Includes effects of interest rate and currency swaps.
(c)  See note 10.
(d)  See note 11.
(e)  Includes  credit support of $14,496  million and $9,784 million at December
     31, 2001 and 2000, respectively.
(f)  Pre-tax gains on sales of financial assets through securitizations amounted
     to $1,327 million and $489 million in 2001 and 2000, respectively.
(g)  Reported, in total, as $7,895 million in 2000.
(h)  Reported as $11,278 million in 2000.


<PAGE>
                                       50

Derivatives and Hedging.  The Corporation's global business activities routinely
deal with  fluctuations  in interest  rates,  in currency  exchange rates and in
commodity and other asset prices.  The  Corporation  applies strict  policies to
managing each of these risks,  including  prohibitions  on derivatives  trading,
derivatives  market-making  or  other  speculative  activities.  These  policies
require the use of derivative  instruments  in concert with other  techniques to
reduce or eliminate these risks.

On January 1, 2001, the Corporation  adopted SFAS 133, Accounting for Derivative
Instruments and Hedging Activities,  as discussed in note 1. The paragraphs that
follow   provide   additional   information   about   derivatives   and  hedging
relationships in accordance with the requirements of SFAS 133.

Cash flow  hedges.  Under SFAS 133,  cash flow hedges are hedges that use simple
derivatives to offset the variability of expected future cash flows. Variability
can appear in floating rate assets,  floating rate  liabilities  or from certain
types of forecasted  transactions,  and can arise from changes in interest rates
or currency exchange rates. For example,  the Corporation often borrows funds at
a  variable  rate of  interest.  If the  Corporation  needs  the funds to make a
floating rate loan, there is no exposure to interest rate changes,  and no hedge
is  necessary.  However,  if a fixed  rate loan is made,  the  Corporation  will
contractually  commit to pay a fixed rate of interest to a counterparty who will
pay the Corporation a variable rate of interest (an "interest rate swap").  This
swap will then be  designated  as a cash flow hedge of the  associated  variable
rate borrowing.  If, as would be expected, the derivative is perfectly effective
in offsetting variable interest in the borrowing,  changes in its fair value are
recorded  in  a  separate   component   in  equity  and   released  to  earnings
contemporaneously  with  the  earnings  effects  of  the  hedged  item.  Further
information about hedge effectiveness is provided below.

The Corporation uses currency forwards,  interest rate swaps and currency swaps,
to optimize borrowing costs and investment returns. For example,  currency swaps
and non-functional currency borrowings together provide lower funding costs than
could be achieved by issuing debt directly in a given currency.

Adoption of SFAS 133  resulted in a reduction  of share  owners'  equity of $849
million at January 1, 2001.  Of that  amount,  $288 million was  transferred  to
earnings  in 2001 along with the  earnings  effects  of the  related  forecasted
transactions  for no net impact on  earnings.  At  December  31,  2001,  amounts
related to derivatives qualifying as cash flow hedges amounted to a reduction of
equity of $890 million,  of which $603 million was expected to be transferred to
earnings  in 2002 along with the  earnings  effects  of the  related  forecasted
transactions.  In 2001,  there were no  forecasted  transactions  that failed to
occur.  At  December  31,  2001,  the  term of  derivative  instruments  hedging
forecasted  transactions,  except those related to variable interest on existing
financial instruments, was zero.

Fair value hedges.  Under SFAS 133, fair value hedges are hedges that  eliminate
the risk of changes in the fair values of assets,  liabilities and certain types
of firm commitments. For example, the Corporation will use an interest rate swap
in which it  receives  a fixed  rate of  interest  and pays a  variable  rate of
interest to change the cash flow profile of a fixed rate  borrowing to match the
variable  rate  financial  asset  that it is  funding.  Changes in fair value of
derivatives  designated  and  effective  as fair value  hedges are  recorded  in
earnings and are offset by corresponding changes in the fair value of the hedged
item.

The Corporation  uses interest rate swaps,  currency swaps and interest rate and
currency  forwards to hedge the effect of interest  rate and  currency  exchange
rate  changes  on  local  and  nonfunctional   currency  denominated  fixed-rate
borrowings  and certain types of fixed-rate  assets.  Equity options are used to
hedge  price  changes  in  investment  securities  and  equity-indexed   annuity
liabilities at the Corporation.

Net investment  hedges.  The net  investment  hedge  designation  under SFAS 133
refers  to the use of  derivative  contracts  or cash  instruments  to hedge the
foreign  currency  exposure of a net investment in a foreign  operation.  At the
Corporation,  currency  exposures that result from net investments in affiliates
are managed  principally  by funding  assets  denominated in local currency with
debt denominated in that same currency. In certain circumstances, such exposures
are managed using currency forwards and currency swaps.

Derivatives not designated as hedges.  SFAS 133 specifies  criteria that must be
met in order to apply any of the three forms of hedge  accounting.  For example,
hedge  accounting  is not  permitted  for hedged items that are marked to market
through  earnings.  The Corporation  uses derivatives to hedge exposures when it
makes  economic  sense to do so,  including  circumstances  in which the hedging
relationship does not qualify for hedge accounting as described in the following
paragraph.  The Corporation also will occasionally receive derivatives,  such as
equity warrants, in the ordinary course of business. Under SFAS 133, derivatives
that do not qualify for hedge accounting are marked to market through earnings.

The Corporation uses option contracts, including caps, floors and collars, as an
economic hedge of changes in interest rates,  currency exchange rates and equity
prices on certain types of assets and liabilities.  For example, the Corporation
uses equity  options to hedge the risk of changes in equity  prices  embedded in
insurance liabilities  associated with annuity contracts written by GE Financial
Assurance.  The Corporation also uses interest rate swaps, purchased options and
<PAGE>
                                       51

futures as an economic hedge of the fair value of mortgage servicing rights. The
Corporation  occasionally  obtains  equity  warrants  as  part  of  sourcing  or
financing  transactions.   Although  these  instruments  are  considered  to  be
derivatives  under SFAS 133,  their  economic risk is similar to, and managed on
the same basis as, other equity instruments held by the Corporation.

Earnings  effects of  derivatives.  The table that follows  provides  additional
information about the earnings effects of derivatives. In the context of hedging
relationships,  "effectiveness" refers to the degree to which fair value changes
in the hedging instrument offset  corresponding fair value changes in the hedged
item.  Certain  elements of hedge positions  cannot qualify for hedge accounting
under SFAS 133 whether  effective or not, and must therefore be marked to market
through earnings.  Time value of purchased options is the most common example of
such elements in instruments used by the  Corporation.  Earnings effects of such
items are shown in the following table as "amounts  excluded from the measure of
effectiveness."

<TABLE>
<CAPTION>
December 31, 2001 (In millions)                                         Cash flow hedges          Fair value hedges
                                                                       ---------------------    ---------------------
<S>                                                                     <C>                      <C>
Ineffectiveness................................................         $       7                $      28
Amounts excluded from the measure of effectiveness.............                 -                      (21)
</TABLE>

At December  31,  2001,  the fair value of  derivatives  in a gain  position and
recorded in "All other assets" is $2.1 billion and the fair value of derivatives
in a loss position and recorded in "All other liabilities" is $3.6 billion.

The following table provides fair value information about derivative instruments
for the year 2000.  Following  adoption  of SFAS 133 on  January  1,  2001,  all
derivative  instruments  are reported at fair value in the financial  statements
and similar disclosures for December 31, 2001, are not relevant.
<TABLE>
<CAPTION>
                                                                                2000
                                              ------------------------------------------------------------------------
                                                                                    Assets (liabilities)
                                                                      ------------------------------------------------
                                                                           Carrying
                                                   Notional                 amount                    Estimated
  (In millions)                                     amount                   (net)                    fair value
  -----------------------------------------   ------------------      --------------------     -----------------------
<S>                                           <C>                     <C>                      <C>
  Assets
     Integrated swaps......................   $       22,911          $        (44)            $           (771)
     Purchased options.....................            9,832                   105                          164
     Options, including "floors"...........           21,984                   202                          208
     Interest rate swaps and futures.......            2,798                    29                           38
  Liabilities
     Interest rate swaps...................           52,681                     -                         (208)
     Currency swaps........................           24,314                     -                         (957)
     Currency forwards.....................           27,902                     -                          381
  Other firm commitments
     Currency forwards.....................            1,585                     8                           47
     Currency swaps........................              647                   292                          275
</TABLE>

Counterparty credit risk. The risk that  counterparties to derivative  contracts
will be financially unable to make payments to the Corporation  according to the
terms of the agreements is counterparty credit risk. Counterparty credit risk is
managed on an individual  counterparty  basis, which means that gains and losses
are  netted  for each  counterparty  to  determine  the  amount at risk.  When a
counterparty  exceeds  credit  exposure  limits in terms of  amounts  due to the
Corporation,  typically as a result of changes in market  conditions  (see table
below),  no additional  transactions  are executed  until the exposure with that
counterparty is reduced to an amount that is within the established  limit.  All
swaps are  executed  under  master  swap  agreements  containing  mutual  credit
downgrade   provisions  that  provide  the  ability  to  require  assignment  or
termination  in the  event  either  party is  downgraded  below A3 or A-. If the
downgrade  provisions had been  triggered at December 31, 2001, the  Corporation
could have been  required to disburse up to $2.8  billion and could have claimed
$0.8 billion  from  counterparties  -- the net fair value  losses and gains.  At
December 31, 2001 and 2000,  gross fair value gains amounted to $3.1 billion and
$2.9  billion,  respectively.  At December  31, 2001 and 2000,  gross fair value
losses amounted to $5.1 billion and $3.7 billion, respectively.

As part of its ongoing  activities,  the Corporation  enters into swaps that are
integrated into investments in or loans to particular customers. Such integrated
swaps not  involving  assumption  of  third-party  credit risk are evaluated and
monitored  like  their  associated  investments  or loans and are not  therefore
subject to the same credit criteria that would apply to a stand-alone  position.
Except for such positions,  all other swaps, purchased options and forwards with
contractual  maturities  longer  than one year are  conducted  within the credit
<PAGE>
                                       52


policy constraints  provided in the table below.  Foreign exchange forwards with
contractual   maturities   shorter   than  one  year  must  be   executed   with
counterparties  having an A-1+/ P-1 credit rating and the credit limit for these
transactions is $150 million.

Counterparty credit criteria                     Credit rating
                                         --------------------------------
                                             Moody's     Standard & Poor's
                                         -------------- -----------------
 Term of transaction
   Between one and five years ........        Aa3              AA-
   Greater than five years ...........        Aaa              AAA
 Credit exposure limits
   Up to $50 million .................        Aa3              AA-
   Up to $75 million .................        Aaa              AAA


NOTE 21. GEOGRAPHIC SEGMENT INFORMATION

The table below presents data by geographic region. Revenues shown below are
classified according to their country of origin.
<TABLE>
<CAPTION>
                                                Revenues                             Long-lived assets (c)
                                       For the years ended December 31                   At December 31
                               ----------------------------------------  ----------------------------------------
  (In millions)                    2001          2000          1999          2001          2000          1999
                               ------------  ------------  ------------  ------------  ------------  ------------
<S>                             <C>           <C>           <C>           <C>           <C>           <C>
  United States .............   $ 35,230      $ 39,891      $ 34,063      $ 10,251      $ 11,032      $ 13,270
  Europe ....................     12,722        14,526        14,045         3,479         3,260         3,449
  Pacific Basin .............      5,806         7,147         3,722           986         1,146         1,280
  Global (a) ................      2,291         2,134         1,788        12,978        10,763         8,960
  Other (b) .................      2,304         2,479         2,131         1,647         1,615         1,682
                               ------------  ------------  ------------  ------------  ------------  ------------
   Total ....................   $ 58,353      $ 66,177      $ 55,749      $ 29,341      $ 27,816      $ 28,641
                               ============  ============  ============  ============  ============  ============
</TABLE>

 (a) Consists of operations that cannot meaningfully be associated with specific
     geographic areas (for example,  commercial aircraft and shipping containers
     used on ocean-going vessels).
 (b) Principally the Americas other than the United States.
 (c) Property, plant and equipment (including equipment leased to others).


Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

                                 Not applicable



<PAGE>
                                       53





                                    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



<PAGE>
                                       54




                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)  1. Financial Statements

          Included in Part II of this report:

               Independent Auditors' Report

               Statement of  Earnings  for each of the  years in the  three-year
                    period ended December 31, 2001

               Statement of  Changes  in Share  Owners'  Equity  for each of the
                    years in the three-year period ended December 31, 2001

               Statement of Financial Position at December 31, 2001 and 2000

               Statement of Cash  Flows for each of the years in the  three-year
                    period ended December 31, 2001

               Notes to Consolidated Financial Statements

             Incorporated by reference:

               The  consolidated   financial   statements  of  General  Electric
               Company,  set forth in the Annual  Report on Form 10-K of General
               Electric Company (S.E.C.  File No.  001-00035) for the year ended
               December 31, 2001 (pages F-1 through  F-52) and Exhibit 12 (Ratio
               of Earnings to Fixed Charges) of General Electric Company.

(a)  2. Financial Statement Schedules

          Schedule I. Condensed financial information of registrant.

          Schedule V. Supplemental information concerning property and casualty
               insurance operations.

          All other  schedules are omitted  because of the absence of conditions
          under which they are required or because the required  information  is
          shown in the financial statements or notes thereto.

(a)  3. Exhibit Index

          The  exhibits  listed  below,  as part of Form 10-K,  are  numbered in
          conformity  with the numbering  used in Item 601 of Regulation  S-K of
          the Securities and Exchange Commission.




   Exhibit
   Number                      Description
   -------                     ------------

     3(i) A complete copy of the Certificate of Incorporation of the Corporation
          as last amended on July 22, 1999 and  currently in effect,  consisting
          of  the  following:  (a)  the  Certificate  of  Incorporation  of  the
          Corporation  as  in  effect  immediately  prior  to  the  filing  of a
          Certificate of Amendment on July 22, 1999  (incorporated  by reference
          to Exhibit  3(i) of the  Corporation's  Form 10-K  Report for the year
          ended  December 31, 1993);  and (b) a Certificate  of Amendment  filed
          with the Office of the  Secretary of State,  State of Delaware on July
          22,  1999   (incorporated   by   reference  to  Exhibit  3(i)  of  the
          Corporation's Form 10-Q Report for the quarter ended June 26, 1999).

     3(ii)A complete copy of the By-Laws of the  Corporation  as last amended on
          June 30, 1994, and currently in effect.  (Incorporated by reference to
          Exhibit 3(ii) of the Corporation's Form 10-K Report for the year ended
          December 31, 1994).

     4(a) Agreement to furnish to the  Securities and Exchange  Commission  upon
          request  a copy of  instruments  defining  the  rights of  holders  of
          certain  long-term  debt of the registrant  and all  subsidiaries  for
          which consolidated or unconsolidated financial statements are required
          to be filed.

    12(a) Computation of ratio of earnings to fixed charges.

    12(b) Computation  of  ratio of  earnings  to  combined  fixed  charges  and
          preferred stock dividends.
<PAGE>
                                       55



   23(ii) Consent of KPMG LLP.

      24  Power of Attorney.

    99(a) Income  Maintenance  Agreement  dated March 28, 1991,  between General
          Electric   Company   and   General   Electric   Capital   Corporation.
          (Incorporated  by  reference to Exhibit 28 of the  Corporation's  Form
          10-K Report for the year ended December 31, 1992).

    99(b) The consolidated financial statements of General Electric Company, set
          forth in the Annual  Report on Form 10-K of General  Electric  Company
          (S.E.C.  File No.  001-00035)  for the year ended  December  31, 2001,
          (pages F-1  through  F-52) and  Exhibit 12 (Ratio of Earnings to Fixed
          Charges) of General Electric Company.

    99(c) Item 1.  Business - Property and Casualty  Reserves for Unpaid  Claims
          and Claim Expenses,  set forth in the Annual Report on Form 10-K of GE
          Global Insurance Holding Corporation (S.E.C. File No. 0-27394) for the
          year ended December 31, 2001 (Pages 5 through 10).

    99(d) Letter,  dated  February 4, 1999,  from Dennis D. Dammerman of General
          Electric  Company  to Denis J.  Nayden  of  General  Electric  Capital
          Corporation  pursuant  to which  General  Electric  Company  agrees to
          provide  additional equity to General Electric Capital  Corporation in
          conjunction  with  certain  redemptions  by General  Electric  Capital
          Corporation  of shares of its  Variable  Cumulative  Preferred  Stock.
          (Incorporated  by  reference  to Exhibit  99 (g) to  General  Electric
          Capital Corporation's  Post-Effective  Amendment No. 1 to Registration
          Statement on Form S-3, File No. 333-59707).

  (b)  Reports on Form 8-K

                                      None.




<PAGE>
                                       56


<TABLE>
<CAPTION>
                         GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                             SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                   GENERAL ELECTRIC CAPITAL SERVICES, INC.

                             CONDENSED STATEMENT OF CURRENT AND RETAINED EARNINGS


 For the years ended December 31 (In millions)                            2001             2000             1999
                                                                      -------------    -------------    -------------
<S>                                                                   <C>              <C>              <C>
 REVENUES ........................................................    $       (50)     $         7      $        26
                                                                      -------------    -------------    -------------
 EXPENSES:
  Interest .......................................................            348              449              378
  Operating and administrative ...................................            372              283              342
                                                                      -------------    -------------    -------------
 Loss before income taxes and equity in earnings of affiliates ...           (770)            (725)            (694)
 Income tax benefit ..............................................            221              206              194
 Equity in earnings of affiliates ................................          6,135            5,711            4,943
 Cumulative effect of accounting changes, net of tax..............           (169)               -                -
                                                                      -------------    -------------    -------------
 NET EARNINGS ....................................................          5,417            5,192            4,443
 Dividends paid ..................................................         (1,961)          (1,822)          (1,666)
 Retained earnings at January 1 ..................................         21,222           17,852           15,075
                                                                      -------------    -------------    -------------
 RETAINED EARNINGS AT DECEMBER 31 ................................    $    24,678      $    21,222      $    17,852
                                                                      =============    =============    =============

</TABLE>
See notes to Condensed Financial Statements.




<PAGE>
                                       57


<TABLE>
<CAPTION>

                         GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                       SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (Continued)

                                    GENERAL ELECTRIC CAPITAL SERVICES, INC.

                                  CONDENSED STATEMENT OF FINANCIAL POSITION



 At December 31 (In millions)                                                               2001          2000
                                                                                       ------------  -------------
<S>                                                                                    <C>            <C>
 ASSETS
 Cash and equivalents ................................................................ $         3    $         -
 Investment in and advances to affiliates ............................................      35,724         30,014
 Other assets.........................................................................         639            600
                                                                                       ------------   ------------
  Total assets ....................................................................... $    36,366    $    30,614
                                                                                       ============   ============
 LIABILITIES AND SHARE OWNERS' EQUITY
 Short-term borrowings ............................................................... $     6,830    $     6,696
 Long-term borrowings ................................................................         299            299
                                                                                       ------------   ------------
  Total borrowings....................................................................       7,129          6,995
 Accounts payable ....................................................................           1             12
 Other liabilities ...................................................................         146             85
                                                                                       ------------   ------------
  Total liabilities ..................................................................       7,276          7,092
                                                                                       ------------   ------------
 Cumulative preferred stock, $10,000 par value (80,000 shares authorized; 51,000
   shares issued and held primarily by affiliates at December 31, 2001 and 2000) .....         510            510
 Common stock, $1,000 (1,260 shares authorized at December 31, 2001 and 2000 and
   1,012 shares outstanding at December 31, 2001 and 2000) ...........................           1              1
 Additional paid-in capital ..........................................................       5,979          2,742
 Retained earnings ...................................................................      24,678         21,222
 Accumulated gains/(losses) - net:
   Investment securities held by affiliates - net (a) ................................        (348)             4
   Currency translation adjustments (a) ..............................................        (840)          (957)
   Derivatives qualifying as hedges (a) ..............................................        (890)             -
                                                                                       ------------   ------------
  Total share owners' equity .........................................................      29,090         23,522
                                                                                       ------------   ------------
  Total liabilities and share owners' equity ......................................... $    36,366    $    30,614
                                                                                       ============   ============
</TABLE>

(a)  The sum of accumulated  gains/(losses) on investment  securities,  currency
     translation  adjustments and derivatives  qualifying as hedges  constitutes
     "Accumulated  nonowner  changes  other  than  earnings,"  and was  ($2,078)
     million and ($953) million at year-end 2001 and 2000, respectively.


See notes to Condensed Financial Statements.




<PAGE>
                                       58

<TABLE>
<CAPTION>

                                 GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                              SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (Continued)

                                            GENERAL ELECTRIC CAPITAL SERVICES, INC.

                                             CONDENSED STATEMENT OF CASH FLOWS



 For the years ended December 31 (In millions)                                2001            2000             1999
                                                                         --------------  -------------   ---------------
<S>                                                                      <C>             <C>             <C>
 CASH FROM OPERATING ACTIVITIES ...................................      $     1,705     $     2,210     $     1,387
                                                                         --------------  -------------   ---------------
 CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES
 Change in investment and advances to affiliates ..................           (2,852)           (562)             45
 Net change in other assets .......................................              (66)           (385)            115
                                                                         --------------  -------------   ---------------
   Cash from (used for) investing activities ......................           (2,918)           (947)            160
                                                                         --------------  -------------   ---------------
 CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES
 Net change in borrowings (maturities of 90 days or less) .........              134             559             119
 Dividends paid ...................................................           (1,961)         (1,822)         (1,666)
 Capital contributions from GE ....................................            3,043               -               -
                                                                         --------------  -------------   ---------------
   Cash from (used for) financing activities ......................            1,216          (1,263)         (1,547)
                                                                         --------------  -------------   ---------------
 CHANGE IN CASH AND EQUIVALENTS DURING THE YEAR ...................                3              -               -

 CASH AND EQUIVALENTS AT BEGINNING OF YEAR ........................                -              -               -
                                                                         --------------  -------------   ---------------
 CASH AND EQUIVALENTS AT END OF YEAR ..............................      $         3     $        -      $        -
                                                                         ==============  =============   ===============
</TABLE>

See notes to Condensed Financial Statements.



<PAGE>
                                       59



       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

    SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (Concluded)

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Income taxes

General  Electric  Company files a consolidated  U.S.  federal income tax return
which includes General Electric Capital Services,  Inc. ("GE Capital Services").
Income  tax  benefit   includes  the  effect  of  GE  Capital  Services  on  the
consolidated return.

Dividends from affiliates

In 2001, GE Capital Services  received  dividends of $1,961 million from General
Electric  Capital  Corporation  ("GE  Capital")  and  $216  million  from  other
affiliates.  In 2000, GE Capital Services  received  dividends of $1,480 million
from General Electric Capital Corporation ("GE Capital") and $1,435 million from
other affiliates.




<PAGE>
                                       60

<TABLE>
<CAPTION>

                                GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                                          SCHEDULE V - SUPPLEMENTAL INFORMATION CONCERNING
                                             PROPERTY AND CASUALTY INSURANCE OPERATIONS

                                                             (In millions)




                      At December 31                                               Year ended December 31
         ------------------------------------------- -------------------------------------------------------------------------------
                                Discount
                                deducted
                                  from
                    Liability   liability                                      Claims and claims
                   for unpaid  for unpaid                                    adjustment expenses   Amortization    Paid
       Deferred    claims and  claims and              Earned                incurred related to:  of deferred    claims
        policy       claims      claims               premiums       Net     --------------------    policy     and claims
      acquisition  adjustment  adjustment   Unearned     and      investment   Current   Prior     acquisition  adjustment  Premiums
         costs      expenses    expenses    premiums commissions    income       Year    Years        costs      expenses   written
     ------------ ----------- ----------- ---------- ----------- ----------- ---------  --------  ------------ ----------- ---------
<S>  <C>          <C>        <C>          <C>        <C>         <C>         <C>        <C>      <C>           <C>         <C>
2001 $    1,062   $   23,363  $      439  $    4,840 $   7,748   $    1,540  $  5,511   $    535  $   1,687    $    6,687  $   7,803
     ============ =========== =========== ========== =========== =========== =========  ========  ============ =========== =========
2000 $    1,207   $   19,836  $      166  $    4,646 $   9,018   $    1,641  $  5,939   $    646  $   2,225    $    6,939  $   9,345
     ============ =========== =========== ========== =========== =========== =========  ========  ============ =========== =========
1999 $    1,089   $   19,683  $      334  $    4,505 $   8,185   $    1,464  $  5,211   $    185  $   2,088    $    5,854  $   8,424
     ============ =========== =========== ========== =========== =========== =========  ========  ============ =========== =========

</TABLE>



<PAGE>
                                       61






                                                                   Exhibit 4 (a)



                                                                   March 7, 2002

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Subject: General Electric Capital Services,  Inc. Annual Report on Form 10-K for
         the fiscal year ended December 31, 2001 - File No. 0-14804

Dear Sirs:

Neither General Electric Capital Services,  Inc. (the  "Corporation") nor any of
its  subsidiaries  has  outstanding any instrument with respect to its long-term
debt that is not  registered  or filed with the  Commission  and under which the
total  amount of  securities  authorized  exceeds 10% of the total assets of the
registrant and its  subsidiaries  on a consolidated  basis.  In accordance  with
paragraph (b) (4) (iii) of Item 601 of Regulation S-K (17 CFR  ss.229.601),  the
Corporation hereby agrees to furnish to the Securities and Exchange  Commission,
upon request,  a copy of each instrument  which defines the rights of holders of
such long-term debt.

                                         Very truly yours,

                                         GENERAL ELECTRIC CAPITAL SERVICES, INC.


                                         By: /s/ J.A. Parke
                                             ------------------------------
                                             J.A. Parke,
                                             Executive Vice President and
                                             Chief Financial Officer




<PAGE>
                                       62

<TABLE>
<CAPTION>

                                                                                                          Exhibit 12 (a)

                                             GENERAL ELECTRIC CAPITAL SERVICES, INC.
                                                   AND CONSOLIDATED AFFILIATES

                                         Computation of Ratio of Earnings to Fixed Charges


                                                                          Years ended December 31
                                                      -----------------------------------------------------------------
 (In millions)                                           2001          2000         1999         1998          1997
                                                      ------------  -----------  -----------  ------------  -----------
<S>                                                   <C>           <C>          <C>          <C>           <C>
 Net earnings .....................................   $    5,417    $    5,192   $    4,443   $    3,796    $    3,256
 Provision for income taxes .......................        1,380         1,912        1,653        1,364         1,166
 Minority interest ................................          163           214          186          148           121
                                                      ------------  -----------  -----------  ------------  -----------
 Earnings before income taxes and minority interest        6,960         7,318        6,282        5,308         4,543
                                                      ------------  -----------  -----------  ------------  -----------
 Fixed charges:
   Interest .......................................       10,836        11,415        9,607        9,122         7,762
   One-third of rentals ...........................          335           392          356          296           245
                                                      ------------  -----------  -----------  ------------  -----------
 Total fixed charges ..............................       11,171        11,807        9,963        9,418         8,007
 Less interest capitalized, net of amortization ...          (88)         (121)         (87)         (88)          (52)
                                                      ------------  -----------  -----------  ------------  -----------
 Earnings before income taxes and minority interest,
   plus fixed charges .............................   $   18,043    $   19,004   $   16,158   $   14,638    $   12,498
                                                      ============  ===========  ===========  ============  ===========
 Ratio of earnings to fixed charges ...............         1.62          1.61         1.62         1.55          1.56
                                                      ============  ===========  ===========  ============  ===========
</TABLE>




<PAGE>
                                       63

<TABLE>
<CAPTION>

                                                                                                        Exhibit 12 (b)


                                          GENERAL ELECTRIC CAPITAL SERVICES, INC.
                                                AND CONSOLIDATED AFFILIATES



                  Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends


                                                                        Years ended December 31
                                                    -----------------------------------------------------------------
 (In millions)                                          2001          2000         1999         1998          1997
                                                    ------------  -----------  ------------ ------------  -----------
<S>                                                 <C>           <C>          <C>          <C>           <C>
 Net earnings ....................................  $   5,417     $   5,192    $   4,443    $   3,796     $   3,256
 Provision for income taxes ......................      1,380         1,912        1,653        1,364         1,166
 Minority interest ...............................        163           214          186          148           121
                                                    ------------  -----------  ------------ ------------  -----------
 Earnings before income taxes and minority
   interest ......................................      6,960         7,318        6,282        5,308         4,543
                                                    ------------  -----------  ------------ ------------  -----------
 Fixed charges:
   Interest ......................................     10,836        11,415        9,607        9,122         7,762
   One-third of rentals ..........................        335           392          356          296           245
                                                    ------------  -----------  ------------ ------------  -----------
 Total fixed charges .............................     11,171        11,807        9,963        9,418         8,007
                                                    ------------  -----------  ------------ ------------  -----------
 Less interest capitalized, net of amortization ..        (88)         (121)         (87)         (88)          (52)
                                                    ------------  -----------  ------------ ------------  -----------
 Earnings before income taxes and minority
   interest, plus fixed charges ..................  $  18,043     $  19,004    $  16,158    $  14,638     $  12,498
                                                    ============  ===========  ============ ============  ===========
 Preferred stock dividend requirements ...........  $       1     $       1    $       1    $       1     $       1
 Ratio of earnings before provisions for income
   taxes to net earnings .........................       1.25          1.37         1.37         1.36          1.36
                                                    ------------  -----------  ------------ ------------  -----------
 Preferred stock dividend factor on pre-tax basis           1             1            1            1             1
   Fixed charges .................................     11,171        11,807        9,963        9,418         8,007
                                                    ------------  -----------  ------------ ------------  -----------
 Total fixed charges and preferred stock dividend
   requirements ..................................  $  11,172     $  11,808    $   9,964    $   9,419     $   8,008
                                                    ============  ===========  ============ ============  ===========
 Ratio of earnings to combined fixed charges and
   preferred stock dividends .....................       1.62         1.61          1.62         1.55         1.56
                                                    ============  ===========  ============ ============  ===========
</TABLE>



<PAGE>
                                       64



                                                                 Exhibit 23 (ii)

To the Board of Directors
General Electric Capital Services, Inc.:

We consent to  incorporation  by reference in the  Registration  Statement  (No.
33-7348) on Form S-3 of General Electric Capital  Services,  Inc., of our report
dated  February 8, 2002,  relating to the  statement  of  financial  position of
General  Electric  Capital  Services,  Inc. and  consolidated  affiliates  as of
December 31, 2001 and 2000, and the related  statements of earnings,  changes in
share  owners'  equity  and cash  flows for each of the years in the  three-year
period ended December 31, 2001, and related  schedules,  which report appears in
the December  31, 2001 annual  report on Form 10-K of General  Electric  Capital
Services, Inc.


/s/ KPMG LLP

Stamford, Connecticut
March 8, 2002



<PAGE>
                                       65



                                                                      Exhibit 24

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each of the  undersigned,  being directors
and/or  officers  of  General  Electric  Capital  Services,   Inc.,  a  Delaware
corporation  (the  "Corporation"),  hereby  constitutes  and appoints  Dennis D.
Dammerman,  James A. Parke,  Joan C. Amble and Nancy E. Barton and each of them,
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 they or any one of them  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  attorneys-in-fact  and agents, and
each of them,  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 do in person,  hereby ratifying and confirming all
that  said  attorneys-in-fact  and  agents,  or  any of  them  or  their  or his
substitute  or  resubstitute,  may  lawfully  do or cause  to be done by  virtue
hereof.

IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand this 7th
day of March 2002.



/s/ Dennis D. Dammerman                      /s/ James A. Parke
-------------------------------              ---------------------------------
Dennis D. Dammerman,                         James A. Parke,
Chairman of the Board                        Director, Executive Vice President
(Principal Executive Officer)                and Chief Financial Officer
                                             (Principal Financial Officer)


                      /s/ Joan C. Amble
                      -------------------------------
                      Joan C. Amble,
                      Vice President and Controller
                      (Principal Accounting Officer)












                                                                   (Page 1 of 2)



<PAGE>
                                       66




/s/ Nancy E. Barton                    /s/ Denis J. Nayden
--------------------------------       ----------------------------------
Nancy E. Barton,                       Denis J. Nayden,
Director                               Director

/s/ James R. Bunt                      /s/ Michael A. Neal
--------------------------------       ----------------------------------
James R. Bunt,                         Michael A. Neal,
Director                               Director

                                       /s/ James A. Parke
--------------------------------       ----------------------------------
David L. Calhoun,                      James A. Parke,
Director                               Director

/s/ Dennis D. Dammerman                /s/ Ronald R. Pressman
--------------------------------       ----------------------------------
Dennis D. Dammerman,                   Ronald R. Pressman,
Director                               Director

                                       /s/ Gary M. Reiner
--------------------------------       ----------------------------------
Scott C. Donnelly,                     Gary M. Reiner,
Director                               Director

/s/ Michael D. Fraizer                 /s/ Gary L. Rogers
--------------------------------       ----------------------------------
Michael D. Fraizer,                    Gary L. Rogers,
Director                               Director

/s/ Arthur H. Harper                   /s/ John M. Samuels
--------------------------------       ----------------------------------
Arthur H. Harper,                      John M. Samuels,
Director                               Director

                                       /s/ Keith S. Sherin
--------------------------------       ----------------------------------
Benjamin W. Heineman, Jr.,             Keith S. Sherin,
Director                               Director

/s/ Jeffrey R. Immelt                  /s/ Edward D. Stewart
--------------------------------       ----------------------------------
Jeffrey R. Immelt,                     Edward D. Stewart,
Director                               Director

/s/ Robert Jeffe                       /s/ Robert C. Wright
--------------------------------       ----------------------------------
Robert Jeffe,                          Robert C. Wright,
Director                               Director


--------------------------------
John H. Myers,
Director



A MAJORITY OF THE BOARD OF DIRECTORS
                                                                   (Page 2 of 2)



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                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         GENERAL ELECTRIC CAPITAL SERVICES, INC.

       March 7 , 2002           By:            /s/ Dennis D. Dammerman
                                        ----------------------------------------
                                                 (Dennis D. Dammerman)
                                                 Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the date indicated.

         Signature                            Title                     Date

  /s/ Dennis D. Dammerman     Chairman of the Board                March 7, 2002
-----------------------------
   (Dennis D. Dammerman)      (Principal Executive Officer)


    /s/ James A. Parke        Executive Vice President and         March 7, 2002
-----------------------------
     (James A. Parke)         Chief Financial Officer
                              (Principal Financial Officer)

     /s/ Joan C. Amble        Vice President and Controller        March 7, 2002
-----------------------------
      (Joan C. Amble)         (Principal Accounting Officer)


NANCY E. BARTON*                          Director
JAMES R. BUNT*                            Director
DENNIS D. DAMMERMAN*                      Director
MICHAEL D. FRAIZER*                       Director
ARTHUR H. HARPER*                         Director
JEFFREY R. IMMELT*                        Director
ROBERT JEFFE*                             Director
DENIS J. NAYDEN*                          Director
MICHAEL A. NEAL*                          Director
JAMES A. PARKE*                           Director
RONALD R. PRESSMAN*                       Director
GARY M. REINER*                           Director
GARY L. ROGERS*                           Director
JOHN M. SAMUELS*                          Director
KEITH S. SHERIN*                          Director
EDWARD D. STEWART*                        Director
ROBERT C. WRIGHT*                         Director

A MAJORITY OF THE BOARD OF DIRECTORS

*By:         /s/ Joan C. Amble                                     March 7, 2002
         ---------------------------
              (Joan C. Amble)
              Attorney-in-fact