management comment utah international's history is distinguished by several major corporate decisions which have affected the very nature of the company's structure and assured the con tinued financial well-being of its stock holders in our view this heritage was man ifested dramatically during 1976 when together with general electric utah was party to the largest corporate merger in the history of the united slates utah now has achieved 12 consecutive years of record earnings and the company will continue to seek and develop new natural resource opportunities operating as a subsidiary of general electric but with its own board of directors and management structure 1976 earnings increase for the 1976 fiscal year ended october 31 utah reported earnings of 1 78,821 000 or 5.67 per share this figure represents an increase of 32 over the 135,390,000 or 4.29 per share earned in 1975 before re cording a 23,809,000 extraordinary loss incurred as a result of peru's expropriation of the assets of a utah affiliate earnings in 1975 including the extraordinary loss were 1 1 1 581 000 or 3.54 per share i 1 dividends during 1976 utah increased its dividend for the 26th consecutive year cash divi dends paid amounted to 1.15 per share i an increase of 15 over the 1.00 paid in 1975 based upon the exchange of 1.3 shares of general electric for 1 share of utah and upon general electric's current annual dividend rate of 1.80 per share former utah international stockholders will i receive 2.34 in dividends for each share i of utah exchanged this represents an in crease of 103 over the amount received i by utah stockholders during 1976 coking coal leads profit gains continuing its successes of recent years coking coal made the greatest contribu tion to utah's profit gain in 1976 the per metric ton average price for coking coal was higher than in 1975 and shipments were up 17 the higher shipments and improved profits are particularly note worthy because concurrently activity in the steel mills of the world was slack and coking coal inventories at the mills were heavy significantly higher earnings also were recorded from uranium activities an aver age price per pound which was more than 100 higher than that realized in 1975 together with increased shipments en abled uranium to make the second largest contribution to profits steam coal oil and gas and land devel i opment activities showed improvement \ while contributions from copper and iron i ore declined although changes for these | profit centers were less significant marcona corporation 46%-owned by utah operated at a loss as a result of the generally weak shipping market marcona was unable to effect profitable deploymerr of its fleet much of which was idled in 1975 by the loss of shipments from its ex propriated peruvian iron ore mine proud of accomplishments following utah's last complete year as an independent publicly held company we have devoted the first 76 years and fi nancial comment sections located later in this report to a brief historical review here we take the opportunity to add our own ex pression of pride in the company's accom plishments while utah prospered from the outset its dramatic financial growth during the last 20 years can be matched by very few companies earnings have grown at the compounded annual rate of 19 for the last 20 years 23 for the last 15 years 28 for the last 10 years and 37 for the last 5 years foresight courage and good fortune were the keys to this success in looking back it is clear that utah's record was greatly influenced by decisions to diversify into the mining business and later to cease its construction activities that latter event by which utah disposed of its traditional business in 1969 came at a time when 60 of gross revenues and 69 of total employment were accounted for by the company's construction affairs fundamental to utah's increasing inter est in mining was the company's early rec ognition that the established steel centers were becoming increasingly dependent upon faraway sources of raw materials coupled with that view was utah's realiza tion that the united states needed to de velop additional sources of energy based upon those beliefs investment opportuni ties were perceived in iron ore coking coal steam coal and uranium utah a company on the rise required and attracted mining personnel who were imaginative skilled at converting concepts into profitable operations and dedicated to expansion of the company's invest ments always working within a framework of sound financial standards utah demon strated its ability to make timely sound and farsighted decisions having precious little capital with which to work in its earlygrowth stages manage ment was challenged to finance its expan sion at the rapid pace it envisioned to strengthen the company's credit utah . adopted the strategy of making forward i sales of new production this approach became an important aspect of utah's character and one that still distinguishes it from most mining companies it was the existence of this mineral sales backlog most of which was represented by con tracts offering substantial protection against future cost increases that also at tracted early investor interest in the shares of utah international the company had made a virtue out of a necessity this backlog of future delivery commit ments had grown to 6.12 billion by the end of 1976 of this amount nearly 70 was attributable to australian coking coal which has dominated the financial perfor mance of utah in recent years concern for this growing concentration of earnings in a single commodity produced in a sin gle country no matter how solid either or both now appear led the company to seek a means of providing greater diversifica tion in the interest of employees and stockholders alike diversification achieved utah by merging with one of the largest and most diversified industrial corpora tions in the world has now provided such diversification in a way that will allow the company to take advantage of additional opportunities in areas where the company is already heavily concentrated general electric was well known to us and repre sents the qualities of character that we at utah have prized we are proud to join our destinies with theirs with the merger former utah stockhold ers have we believe exchanged the pros pects of a faster rate of earnings growth with its attendant risks for greater diversi fication higher yield and a premium on their shares at the same time general electric stockholders acquired assets with demonstrated earning power and in our biased view the best mining organization in the world it is the biggest corporate merger ever undertaken and we are con fident that history will prove it to have been the best utah organization the business conducted by utah prior to the merger is being continued by utah as a wholly owned subsidiary of general electric except that the common stock of lucky me uranium corporation a wholly owned subsidiaryof utah has been placed in a voting trust utah international's head quarters will continue to be located in san francisco utah's board of directors has been ex panded to include reginald h.jones chairman of the board and chief execu tive officer of general electric jack s parker vice chairman of general electric alva o way vice president-finance of general electric and james t curry utah's financial vice president and trea surer it is with thanks that we recognize the efforts of the company's very talented em ployees who contribute so much to utah's successes cited throughout this report we also wish to acknowledge with gratitude the consistent support of management dis played by our former stockholders and the significant contributions made over the years by our board of directors who will continue to serve as utah directors under the merged organization we have reason to be confident about the future respectfully submitted f the board ii