the return from more profitable work, in land development we have experienced little or no loss on completed projects. Sometimes the size of the profit has not been to our liking, but in other cases it has exceeded our expectations. In a sense, land development, like mining, deals in "wasting" assets. Land reserves, like ore reserves, are depleted by sales and must be replenished if operating inventory levels are to be maintained. Utah will continue to acquire undeveloped land which is well located, subject to substantial enhancement in value through intelligent planning, and having good profit potential. We believe that over the years this policy, coupled with the quality of our present holdings, will produce profits from our land development operations. MINING Mining still provides the major part of the Company's earnings, with iron ore as our largest single source of profits. Our principal iron ore interest is in the high grade deposits in Peru, mined by our affiliate Marcona Mining Company, of which Utah owns 42-1/4%. Events of the past four years have not favored producers of iron ore selling in world markets. The relationship of supply and demand in the international iron ore business has changed significantly. While the demand for iron ore has increased, it has not increased as fast as had been anticipated based upon the earlier forecasts of the steel industries in the United States, Europe and Japan. On the other hand, the supply of iron ore, stimulated by -6-