to our shareholders on behalf of the board of directors we are pleased to announce that in 1961 for the third consecutive year earnings were at record levels consolidated earnings for 1961 were 9,774,151 or 4.63 a share compared to last year's 9,134,687 or 4.33 a share based on the shares outstanding at the end of 1961 mining activities continue to contribute the major portion of earnings for your company although the results were below those of last year because of a decrease in uranium profits improved results from our construction and land development activities and price adjustments for prior years construction work and dredging operations more than offset the decrease in earnings from mining operations the provision for income taxes this year is in a higher ratio to net income than last year because of increased ordinary income and lower tax depletion a quarterly dividend of 30 a share was paid for each of the first three quarters and was increased to 35 for the fourth quarter in addition an extra 35 divi dend was paid at the year end bringing the total cash dividends for the year to 1.60 an increase of 35 a share over the prior year again in 1961 a 2 percent stock dividend was paid in august the financial condition of your company remains strong net working capital of 10,415,752 is adequate for our needs at this time in february 1961 a new loan agreement was negotiated with the prudential insurance company of america for the principal amount of 20,000,000 and a term of 20 years the bank term loan credit line was accordingly reduced to 5,000,000 this combination permits a more orderly debt retirement program consolidated net worth increased by 6,398,002 to 57,756,269 from retention of earnings the net book value of your stock at year end was 27.36 compared to 24.33 at the end of the prior year our mining operations continue to be very satisfactory profits from iron ore were the leading source of consolidated earnings and show little change from the previous year domestic iron ore earnings were slightly below those of last year while the earnings from overseas iron ore increased however earnings from uranium mining and milling declined from the preceding year excellent progress was made in reducing operating costs for the mining and milling of the uranium ores owned or controlled by the company a substantial part of the difference in uranium earn ings was caused by the additional cost to purchase and process ores produced by others as required in our contract with the atomic energy commission the pur chase of outside ores has been an obligation under our a.e.c contract from its inception but during 1960 we were allowed to substitute our own lower cost ores to supply the deficiency caused when offerings from outside mines were below the scheduled amount development of a 25,000-acre strip coal mine on the navajo indian reservation is on schedule and deliveries of coal to the first 350,000 kw installation for arizona public service company are expected to begin in approximately one year utah has signed a 35-year contract to provide fuel requirements for this facility expansion programs are under way by the company's two mining affiliates marcona and pima at marcona the 22,000,000 program begun in 1960 has been expanded to 42,000,000 and should be completed by the end of 1962 at pima a 4,000,000 program is under way to process low grade reserves and extend the life of the mine earnings from ore sales and ocean shipping were lower despite the higher tonnages of iron ore sold and shipped continued downward pressure on ocean charter rates narrowed profit margins however the long term outlook remains favorable and san juan carriers ltd our shipping affiliate has started construc tion of two 67,500-ton ore-oil carriers and has contracted for a third gross profits from our construction activities were the highest in the company's history this record was made possible by price adjustments carried over from prior years construction work coupled with satisfactory earnings from current opera tions which were conducted at the second highest rate that we have ever enjoyed new work acquired during the year exceeded the volume of work performed during the year giving us a modest improvement in our backlog utah-manhattan-sundt a joint venture sponsored by your company was honored by the u s corps of engineers at a ceremony at salina kansas and presented with a special certificate of appreciation for being the first contractor to finish the work on an atlas f missile launching complex ahead of schedule the first to avoid any work stop page and the first to complete an atlas f site at year end your company was a participant in many construction projects in eleven countries on five continents throughout the world with the largest amount of overseas activity being centered in the growing australian market where utah maintains a separate and complete construction and engineering organization the construction industry here and abroad continues to be characterized by intense price competition and this condition is expected to persist until the capacity to perform work is in better balance with the work available under the circumstances care is being exercised in the selection of contracts and the assumptions of risks japan industrial land development co ltd formed by a number of promi nent japanese firms and in which we will have a stockholder interest plans to engage in land reclamation and hydraulic dredging in japan it has leased utah's dredge alameda under a five-year agreement in addition it has purchased from us plans for the construction of a dredge in japan similar to the alameda we are being called upon to perform services on a fee basis during the early phases of the projects on which the new dredge will be engaged earnings from our land development activities were modest but considerably improved over those of the prior year however these investments in real property are long-range in nature and the results from any single year are not especially significant for current results may be depressed in one year by expenditures made for the benefit of earnings in future years our total investment in land develop ment remains little changed as the purchase of a discount store in san jose cali fornia and the development of a 1 96-acre industrial tract at el segundo california offset the reduction due to sales from existing properties continued good labor relations were experienced at all of the company's loca tions at year end there were approximately 11,000 employees of utah around the world and among these there was only one work stoppage during the year for five days affecting 424 people after 30 years of active service with the company mr a d christensen retired as president and director and effective october 1 mr e w littlefield formerly executive vice president and general manager was elected president and general manager mr a l reeves senior vice president was elected to fill the vacancy on the board and was appointed a member of the executive committee we enter the next year with long-term sales contracts for iron ore and uranium oxide construction work obtained at reasonable prices a larger backlog a long term dredge lease agreement in japan and land for sale purchased in earlier years at favorable prices these factors combined with an organization which has demon strated its skill and loyalty should more than offset the absence of non-recurring gains such as claims and price adjustments therefore with the continued co operation of our employees guidance of our board and support of our shareholders we feel confident that the company will make progress in the future marriner s eccles chairman of the board e w littlefield president and general manager