5. Mining and ocean shipping have also applied the major upward thrust to our earnings and in the first six months this year accounted for 72% of our gross profits from operations including the affiliated companies of which Marcona and Pima are the major ones. Construction's contribution has varied widely but has produced satisfactory profits particularly in the last two years. Gross profits from land development have reached their peak levels in 1963, dropping in the last several years when tight money has slowed down real estate sales and when our inventory of salable land ready for market has been depleted. During the current year land development profits are running ahead of last year, while construction profits are down from the unusually high level of the last two years. So much for land and construction. Let us turn to mining for this is the most important part of our business. Here you will find a pattern that has been followed and it runs like this: first, identify the target of special opportunity; second, find the mineral you are looking for; third, find a customer and negotiate with him a long-term contract sufficient in size to return your initial investment and a profit; fourth, use the contract as a basis for financing; fifth, perform as you said you would; sixth, having established a beachhead, exploit the additional opportunities that its sphere of influence makes possible. IRON ORE In iron ore we recognized early that World War II had brought about changes that would have lasting impacts. The establishment of the Geneval -6-