the year ahead the high level of earnings in 1960 was achieved despite adverse developments that depressed general business in many industries the steel industry in the united states operated at a relatively low rate of capacity during most of the year total construction expenditures were off 2 to 3 per cent from 1959 primarily due to the substantial decline in residential building charter rates for ocean shipping remained at extremely low levels profit margins in con struction were under heavy pressure the fact that in the face of these business developments your company was able to increase its earnings is indicative of the advantages inherent in its diversified operations and in the ability of our business to prosper under generally difficult conditions certainly no company is completely immune from the effects of political and economic trends and any sustained economic or political storms will ultimately influence our performance however we enter the coming year with the benefit of forward sales of iron ore and uranium oxide a reasonable backlog of uncompleted construction contracts some unsettled construction claims and land available for resale purchased at favorable prices in earlier years these factors combined with an organization which has demonstrated its loyalty and its skill again during the past year suggest that earnings in source and use of funds operatioi add non-cash charges for depreciation and depletion less unremitted income of affiliates sale of developed land . other sources . . . s were applied to cash dividends to shareholders .... investment in land and improvements purchase of construction and mining equipmer advances to affiliates and joint ventures . . retirement of long-term debt other the year ahead should be well maintained given reasonable general business conditions here and abroad a further foundation for future earnings was laid this year when your company entered into a fuel agreement with arizona public service com pany extending over a minimum period of 35 years commencing in mid 1963 contract terms are that fuel or energy units will be provided by the com pany from the extensive coal deposits under lease to us in new mexico from the navajo tribe of indians delivered fuel will be consumed by electric power generating facilities having an initial capacity of 350,000 kilowatts installed by the utility company near the mine this contract should assure the company a long-range stream of earnings geared to electric power de mands in the rapidly growing arizona area with the continued support of our shareholders and clients and the full exercise of the ingenuity and resourcefulness of our employees and our man agement personnel we confidently hope to give a good account of the funds you have placed in our stewardship es chairman of the boa hristensen president s 9,135,000 6,113,000 3 1 66,000 512,082,000 3,022,000 2,927,000 $ 2,497,000 4,424,000 3,515,000 2,526,000 3,520,000 839,000 si 7,321,000 $ 710,000 * mining activities overall mining operations during fiscal 1960 were conducted by the parent company wholly-owned subsidiaries or through equity ownership of affiliated companies in the following basic commodities iron ore uranium coal and copper in recent years and again in 1960 mining was the principal source of company earnings 1960 mining income increased over the preceding year primarily because of greater sales and better margins in foreign and domestic iron ore operations uranium uranium mining operations are conducted in wyoming at two locations the lucky me properties in the gas hills district by strip mining methods and in the rich deposits of the shirley basin area by underground