utah construction utah construction company a view of partially completed long sault dam being constructed on the st lawrence river near massena new york at a cost of 30,000,000 for the new york power authority by a prominent group of join venture associates of which utah is a member completion is scheduled for december of 1958 board of directors marriner s eccles chairman marriner a.browning allen d.christensen l s.corey lt.dee georges eccles w.h.harris e.wlittlefield shepard mitchell filwattis officers marriner s eccles chairman of the board allen d christensen president and general manager e w littlef1eld executive vice president secretory and trea c s davis general vice president frank m keller general vice president guyv sperry chiej engineer j m horrigan controller and assistant treasurer charles w robinson assistant treasurer executive committee marriner s eccles allen d.christensen rw.uttlefield to our stockholders during the fiscal year ending october 31 1956 ulah construction company continued to prosper both as an operating company and as a holding company the parent company carried on a general construction and mining business principally in the united states while subsidiary and affiliated companies in which utah construction company holds an interest continued operations domestically and in a number of foreign countries engaging in construction mining ocean shipping and other related activities parent company earnings earnings for utah construction company for the fiscal year 1956 amounted to 12,422,472 equivalent to 2.76 a share this was the highest profit in the 56 year history of the company and compares with 1,737,549 or 1.98 a share earned during the preceding year gross income from domestic construction projects declined from levels of the preceding year largely because of disappointing results achieved by certain joint ventures in which your company is a participant this decrease in gross income was more than offset by improved results obtained from domestic mining activities and investment income from subsidiary and affiliated companies engaged in foreign constructon and mining included in expenses for the year 1956 are accelerated depreciation charges under the declining balance method amounting to 1786,029 in eicess of the amount that would have been accrued under the straight line method this represents an increase of 658,861 over the accelerated depreciation charged against operations in 1955 there has also been charged against earnings for 1956 the amount of s244,0o0 which has been set aside as a reserve for future payments under the company's retirement plan based on profit sharing if profits hold up during the next two years the reserve will be returned as a credit to earnings in future years subsidiary and affiliated companies our company's share of the undistributed earnings of subsidiary and affiliated companies in which we have investments amounted to 1,755,711 after allowance for dividends | paid and for taxes payable on the undistributed current earnings this is the equivalent of | 2.00 a share of utah construction company stock and compares with 1710,029 or 81 | cents a share for the preceding year this improvement over the results of the prior year j resulted primarily from an improvement in the profit levels of companies engaged i in the mining shipping and sales of iron ore profit margins and volume on foreign con i struction work were well sustained and the greater part of the earnings was declared as i dividends to the parent company overall results combining the earnings of the parent company and its share of undistributed earnings of subsidiary and affiliated companies as reported above indicates an overall gain for the year of 4,178,183 or 4.76 a share of utah construction company stock this com pares with 3,404,424 or 3.8s a share of utah construction company stock during the preceding year which included a non-recurring adjustment to surplus of 956,846 arising from revaluation of equipment to conform with the tentative agreement reached with the bureau of internal revenue regarding the depreciation rates for prior years not included in the foregoing figures is the enhancement in value for certain investments retained by the company financial position utah construction company continues to be in a strong financial position in our opinion its assets are conservatively valued and many of its investments are carried at values on the company books substantially below their present worth your management has felt that it was prudent to conserve the company's working capital because of heavy investments in joint ventures in which the company is a par ticipant and because of general conditions in the money markets the company's working capital together with the unused lines of credit available to it are in the opinion of your management adequate to meet the company's requirements in 1956 four quarterly dividends were paid each amounting to 1/100 of a share of permanente cement stock for each share of utah construction company stock held at the time the dividend distributions were made permanente cement stock so distributed had an approximate market value o 1.43 a share of utah construction company stock dividends paid during the preceding year were equivalent to approximately 1.22 a share and were in the form of 90 cents in cash and 1/100 of a share of permanente stock net worth at the dose of the year amounted to 21,108,555 or 124.05 a share this compares with 18,763,113 or 21.38 a share at the close of the preceding year both figures are based upon our investments in other companies being valued at cost rather thai their indicated values which would be approximately 511,500,000 higher than company cost in 1956 and $ 10,000,000 higher in 1955 engineers • contractors new activities through the purchase of a new highly efficient dredge your company actively entered into the field of hydraulic dredging in the san francisco bay area and we are optimistic that this further diversification of our construction activities will yield substantial benefits to the stockholders in the future during the year your company decided to exercise its option to purchase a 60 per cent interest in the capital stock of lucky me uranium corporation and we are confidenl that this venture will prove profitable to your company and will give it an important stake in the mining of uranium which has proved to be one of the most rapidly growing industries in the country outlook utah construction company and its associate companies enter the year 1957 with the highest backlog of uncompleted contract volume in its history the results achieved during 1956 prove once again that the size of the construction backlog is not necessarily an indi cation of the profits that it will produce but we are hopeful that our work portfolio will yield construction profits commensurate with its size we have good reason to believe that it will do so if there is no general inflation and consequent increase in construction cost that would be the inevitable result our income from mining is naturally sensitive to general business conditions but we anticipate an improvement in our overall mining results because our present sources of income will be supplemented by our share of the earnings from pima mining company which started operations in december 1956 in the absence of war or inflation we are hopeful that results for the coming year will equal or surpass those of 1956 we could not view the future with optimism if we were not confident that in the future as in the past our company would once again be favored by those who have need of the goods and services that we offer and that our employees would always discharge their responsibilities creditably to themselves and to the company that they represent to both our clients and to our employees we are deeply indebted respectfully submiited mmbineb s ecclk chairman o the board allen d chmstenshj president and genera manager