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Show It currently appears that the volume of uranium now under contract for sale will be up mod-estly in 1977. Higher stripping ratios could hold profit levels to a small improvement over 1976 but this could change if the management of Lucky Mc Uranium, which under the voting trust agreement cannot be controlled by Utah or G.E., decides to increase shipments from its already large existing inventory or from uncommitted production. Ladd Petroleum is also anticipating a modest gain in profits with physical quantities declining but prices improving. Finally we have hopes that after some years land development activities will once again contri-bute positively to gross profits. This is not an activity that is either significant or one in which we intend to remain, for present problems today in obtaining zoning and environmental clearances make the game not worth the candle. However, for the last several years we have found ourselves in an impossible position, caught between one governmental agency that insisted we could build only single-family homes and another demanding only multifamily structures on the same large piece of land in Alameda, California. This matter has now been resolved and we can at long last proceed with the development of the property. While this dispute was going on interest and taxes were costing us some $2 million a year. Now we anticipate that with this burden removed we can once again enjoy profits from our land development activities. BENEFITS OF GENERAL ELECTRIC-UTAH MERGER The acquisition of Utah Inter- national by General Electric will be in my view a good deal for both parties. Utah International will increase General Electric's earnings per share in 1976 and the contribution should be even greater in 1977 and hopefully so in future years. As part of the General Electric family Utah can proceed to expand more rapidly than it might have felt prudent to do on its own. We are proceeding with the Norwich Park coking coal project in Australia and there will be other projects forthcoming, both domestic and foreign, which we will hope to bring on stream as soon as the necessary development and feasibility work can be done. 10 The New General Electric "Its financial objective remains unchanged: high and sustained earnings growth." At our meeting with the Security Analysts two years ago, I spoke about General Electric's "strategic plan to achieve sustained earnings growth over time, through the systematic man-agement of our total resources". I spoke of "conscious evolution changing ourselves, over time". The Utah merger certainly represents a major change, but perhaps it can be seen in an even broader perspective by comparing the General Electric of today, just before the merger is consummated, with the General Electric of ten years ago. This may throw some light on long-term trends that will help you gauge our future prospects and directions. Perhaps the most important fact is that the General Electric of today has decidedly different sources of earnings a different mix of businesses than the Company of 1966. In allocating our resources to the growth opportunities, we have had a major emphasis on service and materials businesses, in addition to the manufacture of equipment. SERVICE BUSINESSES As you know, service businesses are a fast-growing part of most industrial economies, including the United States. General Electric's major service ventures have been our highly successful Information Services computer network; our financial subsidiary, General Electric Credit Corporation; our Broadcasting and Cable subsidiaries; and our product repair and maintenance business. These service businesses are producing above average growth in earnings, on the order of 17% a year. Consider the repair and maintenance service businesses: Apparatus Service, Installation and Service Engineering, Consumer 11 |