to our shareholders 1970 was an excellent year for your company there was progress on a broad front toward our objective of achieving an expanding stream of earnings — flowing out of a reservoir of long-term sales contracts for future minerals deliveries protected in substantial measure by cost escalation provisions operations during the year are reviewed elsewhere in this report but these developments were the highlights of 1970 • earnings were at record levels for the 6th consecutive year 1970 net in come was 30,273,265 21.7 above the 24,878,448 recorded from normal operations in 1969 earnings per share were 2.27 on a weighted average basis for the year just completed as compared with 1.93 in 1969 • dividends paid to shareholders were increased for the 20th consecutive year and amounted to 65 cents a share up 16.8 from the 55 cents paid in the preceding year • stockholders equity rose to 207,495 707 a gain of 78 million resulting from a combination of retained earnings the conversion of subordinated debentures during the year and the sale in australia of a 10 equity in our sub sidiary utah development company which is engaged in mining activities in that country " the increase in our mineral sales backlog was the second largest ever recorded new sales and escalation adjustments less deliveries added 630 million raising the total backlog to 2.45 billion the company derives the greater part of its earnings from the mining of iron ore steam coal coking coal uranium and copper profit levels from all of these activities improved over the prior year and our capacity to produce each of these minerals has been or is in the course of being substantially expanded steam coal sales at our navajo mine in 1970 were 5.5 million tons up 78 over 1969 and the mine has been ex panded so that it can produce in excess of 8 million tons annually coking coal deliveries from the queensland area were 3 million tons up 80 over the prior year and expansion plans call for installing capacity to achieve production of 13 million tons annually by the end of 1973 uranium shipments were 2,609,977 pounds up 18.8 from the prior year a program to double our output of uranium oxide concentrates will be com pleted early in 1971 iron ore shipments from the mount goldsworthy mine in western australia approximated 6 million tons up 27 over 1969 and an increase in the produc tion rate to 8 million tons by mid-1973 is planned shipments from the marcona mine in peru were also higher than in the prior year copper production from utah's island copper mine now under development and construction is scheduled to commence in 1972 with a mill capacity of approxi mately 33,000 tons of ore daily our 25 owned copper mining affiliate pima mining company increased its profits over 1969 and is increasing its mill capacity from about 39,000 to 53,000 tons of ore daily utah's mining expansion program for the period 1968-1973 which includes both the opening of new mines and the expansion of existing mines involves capital investment in excess of 310 million and of this total amount 125 million had been expended as of october 31 1970 necessary financing for completion of the entire program has been arranged the outlook for 1971 is clouded by more than the usual uncertainties our overseas sales were at a record volume during 1970 but there are indications that the pace of foreign economies may be slackening possibly reflecting the de pressed level of activity prevailing in the united states in the past year copper prices rose throughout most of 1970 but tumbled at the year end and the prospects for copper earnings in 1971 will be affected both by price trends and by the outcome of scheduled labor negotiations profits from construction will be very substantially lower this year earnings will also be affected by the timing of the start-ups of our new shirley basin and goonyella projects at the end of 1970 shipping profits were showing unusual strength which was expected to continue in 1971 weighing all of these factors we anticipate an increase in earnings in 1971 and a sharper rise after 1971 as the new mining projects and expansions still under development are completed and brought into production yours sincerely mineral sales backlog stockholders1 equity marriner s eccles chairman of the board e w littlefield j president and general manager mining gross revenue ttttti i 70 71 72 73 74 75 net income per share doiia,s 2.50 dividends per share