THE TRANSITION In the last 20 years construction has been an unreliable performer, having good years and bad and fluctuating widely from year to year. In few of the 20 years did it fail to make a contribution to overhead and profit, but as often as not construction income represented an unsatisfactory reward on the capital employed and the risks assumed. However, its importance to and its impact on our total company operations has gradually waned with the passage of time and today our investment in construction represents only 15% of our net assets (defined as total assets less current liabilities) in contrast to some 83% 15 years ago. Construction was profitable in 1965 and profits have continued to improve in the first half of 1966. However, for the 20-year period under consideration construction has not significantly contributed to the growth in earnings that Utah experienced. A much more positive contribution was made by our land development activities which commenced around 1951, have consistently contributed to profit and overhead, and have represented a satisfactory return on the investment employed and the risks assumed. Our land development activities fall into two broad categories -- first, the acquisition, development, and resale of residential, industrial, and commercial land, and second, the creation, maturing, and resale of income-producing real estate investments. In both endeavors we have fared well. Our investment in land development grew rapidly until 1961 and has declined since that time when we became doubtful about the - 3 -