ferred stock the effect of dilutive options and warrants see note 11 was insignificant and therefore was not included in this computation earnings per common share assuming full dilution were not presented in the statement of consolidated income since the additional dilution was immaterial 9 currency exchange adjustments deferred currency exchange gains loss at october 31 1973 included under caption mining properties the related amortization of such items and other exchange gains or losses real ized and included in income during 1974 are summarized as follows in thousands 1,392 7,714 $ 6,322 6,383 $ 61 100 deferred exchange losses at october 31 1973 exchange adjustments recorded during the year less deferred exchange gains at october 31 1974 amortization of exchange losses included in current year's income other exchange losses included in current year's income total exchange losses included in current year's income utah has no unperformed forward exchange contracts at october 31 1974 10 contingent liabilities and commitments utah is in the process of developing or expanding certain mining projects this program will require an investment of approximately 120 million in addition to the amount expended through october 31 1974 commitments have been obtained by utah which permit additional borrowings of approxi mately 44 million from lending institutions outside the united states and 6 million from lending institutions within the united states in the opinion of management proceeds from borrowings together with current working capital and cash generated internally are sufficient to fund mining projects now underway and to finance the other cash requirements of utah's business during 1972 the courts of peru affirmed an earlier court decision to the effect that a marcona subsidiary's operations on a mining concession assigned from an instrumentality of the gov ernment of peru did not qualify for depletion deductions in computing income taxable in peru based upon this decision additional taxes and penalties were assessed aggregating approxi mately 17.9 million after crediting approximately 2 million for tax overpayments the subsidi ary arranged with the peruvian banco de la nacion for payment of the additional assessment in monthly installments over a period of ten years peruvian counsel have advised marcona that under the provisions of the concession assign ment agreement the peruvian government instrumentality is obligated to indemnify the mar cona subsidiary against liability for the additional assessment based upon this advice marcona considers that no loss will be sustained as a result of the additional assessment accordingly the additional assessment has not been recorded in marcona's financial statements except to the extent that payments to the banco de la nacion are recorded as a claim receivable during 1972 and early 1973 marcona and the government of peru were engaged in negoti ations which contemplated that an agency of the government would purchase an interest in the peruvian mining operations with such operations subsequently to be conducted as a special mining enterprise managed by marcona it was anticipated that a portion of the con sideration to be received from the sale of the interest would be applied to the settlement of the banco de la nacion debt during 1973 these negotiations were deferred pending negotiation and approval of an expansion contract authorizing additional ore processing facilities the peruvian government did not complete its review of the expansion contract by the established deadline and negotiations were at that time suspended at october 31 1974 discussions had been resumed with government representatives and these are expected to lead to negotiation of arrangements for the expansion of ore processing facilities possible sale of the operating assets in peru to the peruvian government under an arrangement involving the continued management by marcona and the resolution of the tax assessment matter auditors report ll 11 common stock at october 31 1974 200,000 shares of common stock were reserved for future issuance to officers and key employees as restricted stock bonuses over an indefinite number of years the companies acquired by utah see note 1 had stock option plans in effect and one had warrants outstanding upon consummation of the mergers the stock option plans terminated and as of october 31 1974 no warrants remained outstanding 12 restrictions on retained earnings utah's long-term agreements with lending institutions contain restrictive provisions on cer tain payments unless utah has adequate consolidated retained earnings as defined such provisions include limitations on the payment of cash dividends and on the purchase or re demption of outstanding capital stock retained earnings of 133,199,000 were free of such restrictions at october 31 , 1974 to the stockholders and board of directors of utah international inc we have examined the consolidated balance sheet of utah international inc a delaware corporation and subsidiaries as of october 31 1974 and 1973 and the statements of consoli dated income stockholders equity and changes in financial position for each of the years then ended our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing pro cedures as we considered necessary in the circumstances we did not examine the financial statements of certain affiliated companies the investments in which are recorded using the equity method of accounting see note 3 to the consolidated financial statements these statements were examined by other public accountants whose reports thereon have been furnished to us and our opinion expressed herein insofar as it relates to the amounts included for such affiliates is based solely upon the reports of the other public accountants in our opinion based upon our examination and the reports of other public accountants the accompanying consolidated financial statements present fairly the financial position of utah international inc and subsidiaries as of october 31 1974 and 1973 and the results of their operations and the changes in their financial position for each of the years then ended in conformity with generally accepted accounting principles applied on a consistent basis during the periods arthur andersen & co san francisco california december 6 1974