letter to investors Invest and Deliver Leadership Businesses Growth as a Process 2-3X 10%+ 20% gdp revenue earnings returns Demographics. Aging populations in the developed world and exploding population growth in the developing world are important trends. Healthcare, GE Money and NBCU are examples of some of our businesses that have benefitted from these dynamics. Great People and Teams Execution and Financial Discipline Winning in the Future Infrastructure Technology Emerging Markets Environmental Solutions Digital Connections Global Liquidity Demographics We have invested to build a substantial Healthcare business, which could double in size over the next five years. We are a leader in diagnostics with the capability to improve access to care, fi nd diseases earlier and treat them more effectively. We have invested in our consumer finance business which we can double every five years by marketing innovative fi nancial products globally. We have built a strong Hispanic network in Telemundo, which will grow close to 10% per year in the U.S. and has signifi cant global opportunity. GE has the scale to capture these massive global opportunities. Strategic Principles Being a reliable growth company also requires consistent execution on strategic principles that drive performance every quarter and every year. We have consistently executed on four strategic principles: • Build leadership businesses • Focus on reliable execution and fi nancial discipline • Drive growth as a process • Spread ideas across great people and teams that share common values Our strategies create strengths and capabilities, which, in turn, drive competitive advantage. The consistent execution of the same strategic principles year after year, provides the foundation to invest and deliver. Leadership Businesses GE has six strong businesses: Infrastructure, Healthcare, Commercial Finance, GE Money, Industrial and NBCU. We expect these businesses to achieve 10%+ earnings growth most years, with long-term returns of 20%. We expect them to be industry leaders in market share, value and profitability. We want businesses where we can bring the totality of the Company — products, services, information and financing—to capitalize on the growth trends I mentioned earlier. We run these businesses with common finance and human resource processes. We have one leadership development foundation and one global research infrastructure to achieve excellent results with a common culture. We have a few Company-wide Councils, like Services, so we can share ideas with minimum bureaucracy. We compete hard and are tough-minded about winning. We invest to lead in our core businesses in good times and bad. Sometimes good businesses go through bad cycles and we must have the patience to fix them. However, when we fi nd that a business cannot meet our financial goals or could be run better outside GE, we will exit that business rather than erode shareowner value. It is interesting for investors to think about the Company over 10+ years, the way an owner would think about it. This way you can get a sense for the strategic investments that were required to build the business that is delivering today. In 1996, our Healthcare business had $4 billion in revenues and $550 million in operating profit. We were basically a U.S. diagnostic imaging company. The Healthcare results were buried as part of the “Technical Products and Services” segment with a bunch of businesses no longer in GE. However, we believed that Healthcare would benefit from demographic forces and was in a great market for GE. We knew we could generate good returns, so we invested. ge 2006 annual report 5

letter to investors OPERATING PROFIT (In $ billions) (%) REVENUES (In $ billions) 0.6 1996 2007* 4.0 In 2007, Healthcare should have $20 billion in revenues and $4 billion in operating profit. In addition, we now have $16 billion of assets in Healthcare Financial Services built around our customers’ needs. This was the result of multiple strategic and operational decisions over the last 10 years, by people motivated to make technological and commercial breakthroughs. Long-term commitment to Invest and Deliver: GE Healthcare 1996 Inorganic growth A. Organic Growth: $6.9 B. Inorganic Growth from acquisitions in Healthcare Information Technology, Clinical Systems, Life Sciences & Medical Diagnostics, Interventional and In Vitro Diagnostics: $9.1 9% Organic growth per year 16% Average annual growth rate 20.0 2007* 4.0 14 1996 2007* OPERATING PROFIT RATE 20 B B A *Forecast *Forecast *Forecast By serving our customers, taking the business global and adding capability in clinical systems, life sciences, information technology, laboratory diagnostics and diagnostic pharmaceuticals, we are consistently moving ahead of the competition and in synch with our customers. For investors, we have built a business that has the capability to generate 20% returns over the long term. We are building leadership in Healthcare. But, sometimes, markets move away from our strategic principles. That is the case in our Advanced Materials and Plastics businesses. We have strong leadership teams, but because of commodity cost volatility, it has been difficult for them to predict or hit their fi nancial commitments. As a result, we sold our Advanced Materials business in 2006 for $3.8 billion. And we have announced the potential disposition of our Plastics business. These are strong franchises and they will do well outside GE. We are reinvesting this capital into faster growth platforms. Since the beginning of 2007, we have announced almost $15 billion of industrial acquisitions. These include Abbott’s Healthcare Diagnostic business (for $8.1 billion), Smiths’ Aerospace business (for $4.8 billion) and ABB’s former Oil & Gas business (for $1.9 billion). These acquisitions will extend our leadership in Healthcare, Aviation and Oil & Gas. They will add to our earnings in 2007 and beyond, while increasing our industrial growth rate. We expect these investments to generate 15% cash returns by their fifth year and 20% returns over the long term. Because we have invested in our leadership businesses over time, we were able to deliver for you in 2006 and are even better positioned for 2007. Infrastructure (34% of GE’s segment profi t) grew earnings 16%, driven by superior technology and strong global growth. Commercial Finance (19% of GE) grew earnings 17%, fueled by origination excellence and strong risk management. GE Money (13% of GE) grew earnings 15%, by leveraging marketing excellence and a diversified global position. Healthcare (12% of GE) grew earnings 18%, with excellent products satisfying customers around the world. Consumer & Industrial, Equipment Services and many of our other Industrial businesses also had record years. NBCU (11% of GE) saw earnings slip 6%. But this allows me to illustrate an important point about a team that invests and delivers. NBCU is capable of consistent 10%+ earnings growth and 20%+ returns. Entertainment assets are highly valued by investors. We have a strong team of leaders in place and the business can benefit from GE capabilities. Momentarily, we are underperforming, and our priority is to improve this business. We have invested in content and the team is delivering. “Heroes,” “Sunday Night Football” and “The Office” are among the industry’s best new programs. Meanwhile, our news, cable and Hispanic platforms are winning. We have dramatically improved our Internet offerings. Our team knows that they must deliver great content with digital distribution to their customers. NBCU should grow earnings in 2007 and is well positioned for the future. I would ask investors to think about the progress we have made with our portfolio over the last five years. In 2001, one-third of our earnings were generated by businesses that could not consistently hit our 10% earnings growth and 20% return goals. Since then, we have executed a disciplined portfolio strategy to create a sustainable competitive advantage based on technology, brand and a valuable installed base. As we go forward, all of our portfolio will be capable of delivering on our financial goals. In addition, each of our businesses can capitalize on the major growth trends of this era. 6 ge 2006 annual report