to our shareholders for utah international the 1974 fiscal year was most rewarding both in terms of the profit performance and from the standpoint of our efforts to enhance progressively the longer term outlook for the company earnings increase net income in 1974 rose sharply to 96,941 000 or 3.08 per share as com pared with 55,436,000 or 1 77 per share recorded in fiscal 1973 restated to reflect three mergers consummated during 1974 the improvement in net income totaling 41.5 million is the largest increase ever recorded utah's profits have increased in each of the last 1 1 years and the 75 gain in the current year is the greatest percentage improvement recorded during that time during 1974 net income was reduced by approximately 12 million in order to raise the level of our reserves con tinued uncertainties as to the future profitability of a real estate investment and the desire to restate effectively the value of certain assets acquired in a merger during the current year were the primary reasons behind this action dividend raised cash dividends paid in 1974 amounted to 71 cents per share an increase of 56 over the 45 v2 cents paid in the prior year with the elimination of vol untary controls on dividends once again it has become possible for utah to consider a dividend payout program which reflects the earnings gains of recent years the 1974 dividend estab lishes the 24th consecutive year in which dividends have been increased and the 44th consecutive year of divi dend payments oil and gas program 1974 marked utah's entry into the oil and natural gas business ladd petro leum corporation was acquired early in the year followed by a relatively small acquisition then on october 31 1974 a transaction was completed to merge lvo corporation a new york stock exchange-listed company with principal offices in tulsa into utah at the time of the merger lvo's assets were pri marily oil and gas interests in the united states we are pleased to have the staff and shareholders of these companies joining us at utah to share with us our challenges and opportunities these mergers have been accounted for on a pooling of interests basis and utah's results for 1974 reflect a full year of these oil and gas operations with a restatement of prior years results as well all oil and gas activities are directed from the denver headquarters of ladd petroleum as they continue to expand within their field of interest through a program of exploration de velopment and acquisition coking coal leads profit gains unusually wet weather conditions in australia during the early months of the year disrupted the operations at the three coking coal mines in queensland causing shipments in the first two quar ters to fall below expectations pro duction and shipments in subsequent quarters were much improved resulting in a modest overall gain in deliveries for the year the peak downs mine the newest of the operating coking coal mines reached full production levels late in the year and was responsible for the improvement in delivery amounts of greater significance in terms of profit impact were increases in the base prices for australian coking coal in recognition of sharply higher prices in world markets these price adjust ments were in addition to those normally realized from the operation of cost escalation provisions and are applicable to all existing long-term arrangements with both japanese and european buyers although some of the increases will not be effective until 1975 most became operative in the second half of 1974 resulting in significant profit gains which are expected to continue for the life of the contracts development of the saraji mine the fourth queensland coking coal opera tion continues on schedule with de liveries to commence early in fiscal 1975 coal price increases obtained in 1974 will be effective for saraji produc tion as well recognizing generally higher prices for many raw materials the queensland government has initiated action to modify previously established mineral royalties the eventual outcome of the government's action remains to be determined but the economic impact on utah's queensland operations prob ably will not be excessive copper earnings higher particularly strong international and domestic copper prices continued through the first half of the year allow ing both the island copper project in british columbia and the 25%-owned cyprus pima mine in arizona to record improved earnings for the year never theless by the final quarter of 1974 the earnings contribution from copper had declined considerably primarily from the general decline in prices but also from a seven-week strike initiated by the office and technical workers at island copper and a strike at the smelters which process cyprus pima concentrates during this year of high metals prices the british columbia government adopted a new mineral royalty program part of which is related to payment of a percentage royalty based on sales revenues while the rate of that royalty is not unreasonable when compared with other operating locations a second portion of the new program requires payment of what amounts to an excess profits tax although this royalty has no effect at currently lower copper prices it served to dampen island copper profitability earlier in the year other profit centers the profitability of iron ore from mt goldsworthy in western australia and from the peruvian operations of 46 owned marcona corporation declined through most of the year primarily due to the fact that existing iron ore sales contracts do not contain escalation pro visions to protect these operations from the effects of rapidly rising costs most customers recognized the prob lems and contract changes benefitting both of these operations have been negotiated resulting in higher prices be ginning september 1 1974 these in creases did not become effective in time to prevent lower earnings from these projects for the year but they certainly improve the outlook for 1975 and beyond marcona's shipping profits were improved considerably over the two prior years oil charters provided very attractive opportunities for marcona vessels early in 1974 prior to the curtail ment of this activity as a result of the arab oil embargo later longerterm oil hauls and a variety of dry bulk cargo movements provided continued profits although at a somewhat lower level uranium shipments were considerably higher in 1974 boosted by shipments from product inventories accumulated at the end of last year yet total profits although improved were disappointing a high level of fixed charges to amortize the newer shirley basin investment and generally rising operating costs are currently a problem and will continue to be for the duration of present sales com mitments however beginning in 1976