Scott Davis (Morgan Stanley): Your working capital turns got a lot worse last year, margins disappointed. What is happening there?

Keith S. Sherin:A characterization about losing some of our discipline here is fair. We run the company with a lot of operating discipline. We have continued to execute effectively and deliver earnings growth. If you look at the industrial forecast this year, we are talking about 10% to 15% earnings growth from a $100 billion enterprise. That is good performance. We continue to generate cash flow in line with our earnings and that is a challenge while you are growing a company of our size to be able to manage working capital, to be able to fund the growth but also deliver cash to pay the dividend and to do the buy-back and do acquisitions. We have got an operating council led by the senior leadership team of this company that we meet every month or so to review where we are on global sourcing, on external factors that are affecting us from a cost perspective, on reducing our cost structure, on making sure that our new product introductions come in at better cost positions than old ones. We have just got so many operating mechanisms in this company that continue and are secure. Healthcare has been difficult and we have got to turn that around. I think having a plant shut down distorts the measurements and that is an unfortunate thing. We are just to the end of that but other than that we have been operating the company well and we have been hitting our numbers well. We have got a disruption here in financial services that we have to deal with, unprecedented volatility. It is not an excuse but you have got to separate that from how we run the company and how we operate and where we are strategically positioned with these businesses, which is extraordinary.

Jeffrey R. Immelt: Our equipment revenue is two or three times services for a long time. That is an incredible headwind on margin rates. That all comes back with a big service backlog at some point. I do not think that is worth apologizing about and the infrastructure business is the shining star of the company and that remains strong and solid, if you look at how we are positioned.

Keith S. Sherin: One good example is the wind business and we have had a lot of discussions about margins and should we be getting margin growth in infrastructure. We have a debate - should we stop selling all these wind units just because their margin rate is lower than the company average and the answer is absolutely not. We ought to build that installed base. We ought to take every one of these orders. The wind business is up to a 15% operating profit and it is growing 20% plus a year. Now, our margin looks like it is going down as we grow wind as a rate but we are getting more margin dollars, we are more profitable, and it is the right thing to do for shareholders. It generates cash. The overall mix of the business is creating pressure on the margin rate in total, but the individual businesses and the operating actions they are taking on are the right things for us to grow our earnings and grow our cash, and that is a good example where you have got to separate just what the absolute margin rate is from what the dynamics are of driving the profitability in the future.

Scott Davis (Morgan Stanley): Is it time to rethink the business model?

Jeffrey R. Immelt: The last five years from continuing ops, revenue grew 13, earnings grew 14, and cash was strong, strong buy-back, expanding returns. We are into an unprecedented financial cycle and with that, our earnings down 20% is better than our peers and we are going to be positioned to deliver on the commitments that we have made today going forward in the year. I think we should continue to drive the strategy that we have got and that is what we are going to do.

Nicole Parent (Credit Suisse): How good of an early cycle read do you think you have on Western Europe in light of the unprecedented financial market turmoil out there?

Jeffrey R. Immelt: We still in the U.S. have good early warning systems with appliances and NBC and things like that. As it pertains to Europe, we do not see real slowdowns yet in the businesses that we are basic in, which are the longer cycle businesses. We have reflected in the guidance range a U.S. economy that is going to stay difficult. The infrastructure piece that we look at basically portrays what we see in backlog and sustained ability to ship, where the pricing is, things like that. We have got some window on the global economy in the markets that we are in and the long cycle businesses dominate still what we do, and I include in there healthcare, what we do outside the United States.

Nicole Parent (Credit Suisse): When you think about the U.S. being down 5% in terms of your business in the first quarter, do you think that is going to stay down for the rest of the year or could it get worse or could it get better?

Jeffrey R. Immelt: In the case of businesses like appliances and some of the other businesses, we get easier comparisons as you get forward in the year but look, we are not counting on the business getting any better vis-à-vis what we see, and in the case on the U.S. consumer, we have allowed for a worsening of the U.S. consumer in our GE Money business.

Nicole Parent (Credit Suisse): What is your CapEx forecast about healthcare?

Keith S. Sherin: We did see some pressure for community hospitals and other hospitals that access the public markets like the auction markets to provide their funding. We have seen the DRA impact. And that spread around to not just clinics but to hospitals. Now we are going to get into the second quarter and third quarter where we have got better comparisons and run-rates on those, but we have to watch what happens with some of the other businesses, like the clinical systems and the monitoring and some of the other flow products and some of the smaller entities. Our view in healthcare was that we are going to continue to see pressure from the diagnostic imaging and clinical systems business in the U.S. and continue to see good growth outside the U.S. and our range accommodates that what we saw in the fourth quarter, saw in the first quarter, some of that continues but we also have to take into account the better comparisons as we get in through the year and the fact that OEC is going to be shipping. The hospitals are going to continue to face some pressure in terms of funding and CapEx.

Jeffrey R. Immelt: NEMA, which is the industry that tracks the market with diagnostic imaging, they forecast a second half of this year where the market grew 8%. In our scenario, business reviews that we did we have said flat at best. We are not counting on what the people that watch the industry have stated in terms of what they are going to look at for diagnostic imaging.

Nicole Parent (Credit Suisse): Do you think you can expand margins in infrastructure 2008 versus 2007?

Keith S. Sherin: I do think we can. If you look at what happened to us this quarter in infrastructure, every business was up except for aviation and aviation had some hard comparisons. I think the energy business is going to be our horse. Energy took their margin up from 14.8 to 16.1, they are up 1.3. Oil and gas took their margin up 1.5. Transportation took their margin up 3 points in the quarter, so I think we do have an opportunity to grow our margins in the infrastructure business. It is going to be powered by energy and it is also going to be powered by the synergies we get out of both Vetco and Smith. I think we can do that. I think the team is doing a great job. In the quarter where they grew the revenue 21%, they basically kept their op margin flat and they are selling a lot more wind turbines at lower than average margin and they have got the impact of the acquisitions, which diluted them by about 30 to 50 basis points. I think even despite the pressure they have, the equipment services mix, 3X, this business is performing well and it will grow its margins in the future.

Jeffrey R. Immelt: We have got a positive value gap, positive price inflation gap in all those businesses and that is the key.

John Inch (Merrill Lynch): How much of non-real estate gains from asset sales are you baking into the$2.20 to $2.30 forecast?

Keith S. Sherin: Other than real estate, that would be the one place where you say as part of the business model, the sales of those equity properties are built in. We do have other flow transactions that we are planning on doing for the year but I do not have a big transactional item. The biggest BD thing we are working on is PLCC and we would anticipate a gain with that but that that would go into discontinued operations. The real estate model is the one that we are most focused on, but we still plan on doing securitizations. We still plan on selling other assets in GE Capital but we have got that in the core flow businesses. We are going to continue to reposition financial services. We have got some of equipment services that we are working on repositioning that could provide some upside. Then on the other side of GE Money, as we said, there are going to be some asset dispositions that we will do and we did anticipate that some of those would fund some of the provisions and some of the comparisons to securitizations, like the corporate card did in the first quarter. I do not have a specific number on that though.

John Inch (Merrill Lynch): Are you contemplating management changes because of the misses in healthcare?

Jeffrey R. Immelt: We like the healthcare business from the outset. We like where it is positioned. We like the demographic positioning of the company. Over a long period of time, it has been a good performer. There are certain things that are market based; there are certain things that are bad execution. I am not at all happy about having a plant shut down for 20 months by the FDA. That is all on us. We have already made some management changes associated with that and if people do not perform here, we still work hard and if you just look at the set of officers in the annual report every year, there is a different group every year and people have to perform to stay here. We believe in the healthcare franchise and we have to get this plant back up and going. I think once we do that, this is a business that is going to perform in 2008.

John Inch (Merrill Lynch): How are you thinking about Triple A?