to our shareholders in 1972 for the eighth consecutive year the earnings of utah international inc established a new record reaching 39,842,000 or 2.76 a share on a fully-diluted basis this performance represents an increase of 16.7 over the 34,146,000 or 2.36 a share realized during 1971 excluding the extraordinary gain during that year of 1,355,000 resulting from the sale of the company's dredging assets dividends paid in 1 972 amounted to 88 cents a share compared with 75 cents paid in the preceding year this is the 22nd consecutive year in which the dividend has been increased the amount paid in 1972 was limited by the government's voluntary control program on dividend distributions new mining projects were the principal contributors to the earnings increase in 1972 coking coal became the most important source of earnings with the blackwater and goonyella mines in queensland in production throughout the year and the nearby peak downs mine beginning shipments in july the island copper project in british columbia commenced ship ments of copper concentrates early in 1972 and modification of the grinding circuits in the mill is planned to maximize its output problems of pit wall instability at the shirley basin mine were brought under control and operations were profitable at this recently completed project our older profit centers continued to report in the aggregate a satisfactory level of earnings profits from the cedar city iron ore operation and the lucky me uranium project were modestly ahead of the prior year earnings from the mount goldsworthy iron ore operation declined due to lower volume and rising unit costs while steam coal earnings decreased modestly because of lower deliveries to the electric generating units which were down part of the year to install improved air pollution control equipment profits from real estate operations were lower earnings of the company's principal affiliate marcona corporation declined sharply as expected shipping profits which were unusually high in 1971 declined in 1972 as charter arrangements made in earlier years expired and prevailing low charter market rates precluded their renewal on such attractive terms marcona's iron ore mining operations in peru where the industrial climate was more peaceful and in new zealand where production at the iron sands project approached planned operating levels showed improved profitability there was little change in the results of the arizona copper mining operations of the company's second principal affiliate pima mining company with additional coking coal sales contracted in 1972 utah's backlog of mineral sales rose during the year to 3,135 billion an increase of 626 million or 25 during 1972 the economic climate in both our domestic and foreign markets improved as the year progressed we expect this economic recovery to continue in 1973 because of contract provisions and increased demand from our customers we anticipate increased sales and higher income in the coming year continuing the strong growth trend that has characterized the company for the past several years our optimism about the future is necessarily tempered however by the potential threat of well-intended but poorly-conceived legislation which would result in further deterioration of the investment climate for mining this problem is particularly acute in the united states which is already less and less able to meet from domestic sources its requirements for minerals we strongly support the concepts of environmental responsibility but sound legislation must recognize that most surface mining is in the public interest the damage to the surface can be corrected at a cost but the benefits of surface mining - reduced hazards to the miners lower costs to the consumers greater conservation of scarce mineral resources — cannot be obtained from other forms of mining we seek the support of all utah shareholders for soundly-conceived legislation on mining matters after 27 years of dedicated and valued service to the company as a director shepard mitchell has chosen not to stand for re-election in 1973 we extend to him our very best wishes and deep appreciation for his significant contribution to utah's success we again acknowledge with gratitude the successful endeavors of our operating technical and management personnel in the united states and abroad their talents in meeting challenges and fulfilling opportunities have enabled the company to achieve its present success and provide the continuing strength which makes us confident of the future 0 ieral sales - contract backlog mining gross revenue - expected total capacity copper concentrates smelters production is in british columbia rttracts with japane ; island copper min coking coal short-term and long-term contracts with japanese and european steel manufacturers medium and low volatile coking coals will be deliver from the mines of utah development company in queensland australia 90 owned blackwater 100 owned by utah development goonyella 85 owned by utah development peak downs 85 owned by utah development saraji 85 owned by utah development iron ore hematite products from the ml goldsworthy x project in western australia 33vs owned by utah development magnetite ores from the iron springs mine in utah 100 owned steam coal a long-term supply agreement to provide the fuel for the four corners power plant operated by a group of six utilities serving the energy needs of the southwest united states for this purpose subbituminous coal is extracted and delivered from the navajo mine in new mexico 100 owned uranium - ujo relatively short-term arrangements \ for deliveries from the lucky me and shirley basin mines in wyoming both 100 owned in the past when considering investment proposals utah international has placed considerable emphasis on the desirability of obtaining long-term sales contracts for the commodities to be produced at new mining operations as a result of this policy utah and its subsidiaries have amassed a backlog of undelivered sales commitments totaling 3,135 billion as of october 31 1972 the components of this backlog arranged by commodity and project are reflected on the left side of the accompanying graph the company's sales commitments will be satisfied from projects which are currently in operation or in various stages of development most long-term contracts stipulate that deliveries in any year may vary within prescribed limits at the option of the buyer over the life of the contract however it is expected that full contract amounts as indicated in the backlog will be delivered the graph to the right has been prepared using the assumption that the average contract amounts will be delivered each year and it is designed to indicate the importance of sales from the backlog relative to total projected mining revenues for the next four years more than 80 of the sales in the backlog contain price escalation provisions excluded from backlog considerations are the contracted sales of marcona corporation and pima mining company both of which provide important profit contributions to utah since its ownership interest in both of these companies is less than 50 utah does not record any portion of their revenues but only its share of the profits