per share amounts combine Utah's October 31 fiscal years with General Electric's December 31 fiscal years and General Electric's six months and nine months ended June 30, 1976 and September 30, 1976, respectively, with Utah's six months and nine months ended April 30, 1976 and July 31, 1976, respectively. Six Nine months months 1971 1972 1973 1974 1975 1976 1976 General Electric Company Historical earnings per share... $2.60 $2.91 $3.21 $3.34 $3.17 $1.71 $2.71 Pro forma combined earnings attributable to 1 share of GE Common Stock (a)(b). 2.30 2.58 2.91 3.16 3.09(c) 1.74 2.78 Historical cash dividends per share..................................... 1.38 1.40 1.50 1.60 1.60 .80 1.25(d) Historical book value per share..................................... 22.07 23.03 23.60 Pro forma combined book value attributable to 1 share of GE Common Stock......... 20.46 21.51 22.16 Six Nine months months 1971 1972 1973 1974 1975 1976 1976 Utah International Inc. Historical earnings per share- (a)........................................ $1.23(e) $1.42 $1.99 $3.11 $3.54(f) $2.39 $4.00 Pro forma combined earnings attributable to 1.3 shares of GE Common Stock(a)(b).. 2.99 3.36 3.78 4.11 4.01 2.26 3.61 Historical cash dividends per share......................................375 .44 .455 .71 1.00 .50 .75(g) Pro forma cash dividends attributable to 1.3 shares of GE Common Stock.............. 1.79 1.82 1.95 2.08 2.08 1.04 1.63 Historical book value per share..................................... 17.14 19.04 20.40 Pro forma combined book value attributable to 1.3 shares of GE Common Stock..................................... 26.60 27.96 28.81 (a) Historical earnings per share of Utah and pro forma combined earnings per share of General Electric and Utah include the results of operations from Utah's uranium business. As discussed more fully under "Business of UtahUranium," such business has been transferred to Lucky Mc Uranium Corporation, a wholly-owned subsidiary of Utah, which, on and after the effective time of the Merger, will not be consolidated nor accounted for by the equity method for financial reporting purposes. However, Lucky Mc will be required to pay cumulative quarterly dividends on its outstanding preferred stock commencing May 1977 equal to 85% of its net after-tax income for the previous quarter (without taking account of any deduction for exploration expenses), subject, however, to Lucky Mc's right to require loans for up to ten years from the combined enterprise provided the aggregate amount of such loans does not at any time exceed preferred dividend payments for the immediately preceding two years. Had such an arrangement been in effect for the historical period shown, the effect would have been to reduce earnings per share on a combined basis by less than one cent in all periods shown. For the fiscal years 1974 and 1975 and the nine months ended July 31, 1976, Utah's uranium operations accounted for approximately 2%, 1% and 5%, respectively, of Utah's gross profit from operations, including its equity in the earnings or losses of affiliates, joint ventures and partnerships but excluding exploration costs. (b) Utah's average shares outstanding have been adjusted to equivalent General Electric shares by the assumed issuance of 1.3 shares of GE Common Stock for each share of Utah Common Stock. Any dilution of earnings per share which would result from the potential exercise or conversion of such items as stock options or convertible debt outstanding is insignificant (less than 2% in all periods shown). Fully 8 diluted earnings per share for 1975 would be computed based on assumed conversion of the convertible indebtedness of General Electric Overseas Capital Corporation, a wholly-owned affiliate of General Electric, exercise of stock options and issue of shares held under deferred incentive compensation plans. Net earnings for the computation would be adjusted to eliminate appropriate interest expense and expenses related to the deferred incentive compensation shares, net of taxes. On this basis, in 1975 combined pro forma earnings per share on a fully diluted basis would have been $3.05 for 1 share of GE Common Stock and $3.96 for 1.3 shares of GE Common Stock. (c) Includes $.10 per share loss representing the pro forma combined effect of the item discussed in Note (f) below. (d) On September 10, 1976 General Electric increased its regular quarterly dividend from $.40 per share to $.45 per share payable October 25, 1976 to shareowners of record on September 20, 1976. (e) Includes $.07 per share attributable to income from and gain on sale of dredging operations sold during 1971. See Note A to Utah's statement of consolidated income. (f) Earnings per share in 1975 included an extraordinary loss of $.75 per share representing Utah's share of losses attributable to the expropriation in Peru of assets owned by a subsidiary of Marcona Corporation (46% owned by Utah). No consideration has been given to recovery, if any, with respect to these expropriated Peruvian assets. However see "Business of UtahIron OreMarconaPeru" for a discussion of the compensation proposed to be paid by the government of Peru in the approximate amount of $61 million ($24 million of which is as valued by the Peruvian government) for the expropriation of such assets. In addition, see Notes 4 and 19 of Utah's notes to consolidated financial statements. (g) On September 14, 1976 Utah increased its regular quarterly dividend from $.25 per share to $.30 per share and also declared a $.10 year-end extra dividend, both payable October 15, 1976 to stockholders of record on September 30, 1976. Exchange Ratio; Distribution of GE Common Stock; Fractional Shares If the Merger is consummated, each share of Utah Common Stock outstanding at the effective time of the Merger will at that time be deemed exchanged for 1.3 shares of GE Common Stock. For a description of the Common Stock of Utah and General Electric, respectively, see "Description of Capital Stock of Utah" and "Description of Capital Stock of General Electric." Based upon the number of shares of Utah Common Stock outstanding on September 30, 1976, General Electric would be required to issue approximately 41,000,000 shares of GE Common Stock at the effective time of the Merger. General Electric is unable to assess the effect, if any, that the issuance pursuant to the Merger of this large number of additional shares might have on the market price or trading pattern of its Common Stock. Since General Electric is a New York corporation, subsequent to the Merger the rights of Utah's stockholders will be generally governed by New York law and not by the law of Delaware, the state of incorporation of Utah. At the effective time of the Merger, each outstanding share of GE Common Stock would remain outstanding without change. The common stock of GE Subsidiary, all of which is owned by General Electric, would, by virtue of the Merger, be converted into 500 issued shares of Utah Common Stock, all of which would be owned by General Electric and would constitute the total outstanding equity of Utah. Upon the consummation of the Merger certificates representing shares of Utah Common Stock outstanding prior to the Merger will be deemed to represent shares of GE Common Stock on the basis of the ratio previously stated. A letter of transmittal will be furnished to stockholders of Utah for use in exchanging their stock certificates. Such letter will contain instructions with respect to the surrender of Utah stock certificates and the distribution of General Electric stock certificates. No fractional shares or scrip certificates will be issued in connection with the Merger. In lieu thereof each stockholder of Utah entitled to a fractional share of GE Common Stock upon consummation of the Merger will be afforded the opportunity, during the 60-day period immediately following the effective time of the Merger, of selling the fractional interest to which he is entitled or purchasing an additional fractional interest sufficient to make a full share of GE Common Stock. Any fractional share interest with respect to which instructions are not received within the prescribed period will be sold for the benefit of the holder entitled thereto and the 9