area of opportunity, natural resources. This is an area of enormous potential for future earnings growth because the world is industrializing and demand for fuel and raw materials is increasing rapidly. Second, the Utah merger adds greatly to our well advanced program of diversification beyond the manufacture of traditional electrical equipment and into the faster growing materials and services businesses. More on that later. Third, the Utah merger also advances our strategic objective of becoming a worldwide Company, a priority task that we announced at the security analysts' meeting three years ago. We realize that it is unfashionable in some quarters to speak about expanding international operations because of understandable concerns about the pause in the world's economic recovery. I think Barton Biggs, Research Director of Morgan Stanley and Company, put the situation in perspective when he said that generalizations about foreign earnings are dangerously simplistic, and that foreign earnings "must be evaluated country-by-country, by asset exposure, by manufacturing exposure, currency risk, and the degree of management sophistication." General Electric has minimized its risks by being highly selective in its international investments and by concentrating its exports on the high-technology equipment by which nations build their industrial infrastructure power plants, transportation equipment, and industrial systems. Our fastest-growing markets for such equipment are the resource-rich countries that have broad-scale development programs which are relatively immune to the ups and downs of the cycles. By its very nature, Utah is also operating in resource-rich countries and thus complements our basic strategy of helping these nations realize their aspirations for economic growth. General Electric's international sales have been growing twice as fast as its domestic sales, and two thirds of our international business has been coming from countries that are growing faster than the United States. But these economic growth rates are less important than our rates of penetration into world markets. Our share of foreign markets is generally quite small, less than 5% for most products except for power generation and transportation items, and so there is ample headroom for growth. Utah's international operations should especially help to build our customer acceptance in Australia and Brazil, as well as Japan and Europe. To summarize our views on international operations, this planet is undeniably growing smaller and more interdependent, and worldwide marketing, sourc- ing, and competition are the wave of the future. Companies that limit their horizons to one country are restricted in their strategic potential. Of course we have to protect ourselves against cyclical swings and currency fluctuations in various markets, and we have plenty of experience in that regard. But it's the long-term concept that governs General Electric's international strategy, not temporary cyclical considerations. But to return to the rationale for the Utah merger. Utah's enormous reserves of natural resources minerals in the ground should provide our Company with a valuable hedge against worldwide inflation. Natural resources are a basic protection against inflation because there is a finite supply on this planet, and so their value keeps rising over the long term, offsetting the effects of inflation. Since inflation is one of the most pervasive problems facing business today, this long-term hedge against inflation is a very important consideration to GE share owners. And finally the bottom line. Utah has a proven record as an outstanding growth Company. It increased its earnings fourteen- fold in the period from 1966 to 1976, with most of that improvement coming in the past five years. Because of its policy of selling the output of its mines on long-term contracts (predomi-nantly in U.S. dollars and with good protection against future cost increases) Utah has a stability of earnings that you won't find in most other mining companies. On the basis of Utah's fiscal-year 1976 results already announced, it is clear that Utah will improve General Electric's earnings per share from the first day of the merger. And to anticipate your first question our unaudited financial results for 1976 will become available toward the end of January. Most of the security analysts are estimating between $3.95 and $4.05 per share, and I would say we are going to be in that range. Some of you who follow Utah know that their fiscal year ended in October 31. Adding their fiscal 1976 earnings to our estimates should increase GE earnings about five to seven cents a share. So to recap this is the rationale for the Utah merger, in the context of General Electric's overall strategic plan: 1. It brings us into a major new area of opportunity, natural resources. 2. It decisively advances our program of diversification into materials and services businesses. 3. It strengthens and broadens our strategic international thrust. 4. It provides, through its mineral reserves, a long-term hedge against inflation. 5. It will improve our earnings per share from the first day of the merger. Thus in many ways it is a major step toward the achievement of General Electric's long-term strategic objectives. 4 Prospects for Utah International "Ed Littlefield has been a Director of General Electric for twelve years, and all of us on the Board can attest to his qualities as a business executive and a man of the utmost personal integrity. He has taken a relatively small construction company and turned it into one of the most exciting natural resources companies in the world today one that has rewarded its share owners with magnificant improvement in the value of their investment. His decision to bring Utah into the General Electric family is one that holds great promise for the owners of both Companies. " R. H. Jones Edmund W. Littlefield The acquisition of Utah International by General Electric will be, in my view, a good deal for both parties I am delighted to have this opportunity to participate with the new owners of Utah International in this presentation to you. Some of you here are old friends of our Company, but others have concentrated their attention on General Electric, and Utah International comes to you as a comparative stranger. Therefore, I shall mention briefly the structure of the Company and its history before concentrating on the current situation and the outlook for our business. UTAH'S HISTORY Founded in January 1900 as The Utah Construction Company the enterprise spent the better part of the first 50 years of its existence as a heavy construction and engineering company. Most of the work in its first 20 years was the building of railroads and the Company was the leading railroad contractor in the Far West. By 1920 the railroads were largely built and the Company turned its efforts to other endeavors dams, tunnels, earth moving, and other types of heavy engineering construction. It was a leading Com pany in the joint ventures that built such great structures as Hoover, Bonneville, and Grand Coulee Dams. It was recognized as a leader in its field but even after 56 years of such labors the Company had a mere 257 shareholders, 2,400 employees, earned $4.2 million or 16 a share and the stock could have been purchased over the counter as low as $1.18 that year. The Company did less than $43 million of business and over 75% of this was contract construction. UTAH TODAY It is a very different enterprise today. The heavy construction assets were sold in 1969 and the 5