board of directors marriner s eccles chairman marriner a browning allen d christensen l s corey l t dee george s eccles w h harris e w littlefield shepard mitchell p l wattis officers marriner s eccles chairman of the board allen d christensen president e w littlefield executive vice president & general mai c s davis general vice president e m keller general vice president g v sperry vice president & chief engineer j a mecia vice president a l reeves vice president charles w robinson vice president j m horrigan secretary and controller o l dykstra treasurer executive committee marriner s eccles allen d christensen e w littlefield to the stockholders of utah construction company ii i tisfactio the anag ment to report that your corr mtinued gains in many fields c s conditions upon the year's e any operations ty despite ng the past fiscal year showed adverse effect of gem rement has been made in the company ations and particular progress has been through subsidiary and affiliated companies ljtan i_on si ruction company is a holding company as well as an operating organization its interests are far flung in rid wide operations including shipping land development exploration lopment design and engineering mining and construction lu^^.iolders are the more important developments in ns the year saw the completed construction of the holding compa domestic and w i of particular significance utah's domestic mining operat ion ana mining of diversifica company is f flung i li uiuiiimii oxide processing mill for luck pany has a 60 per cent interest explora have progressed favorably and the find trols a high grade uranium ore the outlook for the parent company year s me ura tion acti ings of o h , p ining opera lt p nstruction o rporation in which your com the shirley basin in wyoming ogists indicate that utah con ntial for future development i the state of utah was l tt ith the n yeai iliv umiwk lui li f(.reni company s mining operations in me diaie 01 utan was further enhanced by the consummation of a long-term iron ore sales contract with the columbia-geneva division of u s steel corporation all of these events will have an important effect on the company's financial position in vpars tn nmp also of importance in a related field was the lau cargo ship the san juan merchant i affiliated company on the less favorable side thtflae of san juan carriers ltd able side in certain phases of our activity the operating re been unsatisfactory some slowness has been noted in our land development dredging programs the company has sustained losses attendant to an abnor log of idle construction equipment and unfavorable results have continued of the st lawrence seaway joint venture projects in mexico and a of our operations have been disappointing ho . _. . . . will improve with the general economic recovery and seaway projects approach complet iiu miau djjd me itaujis ifident that these trends c recovery ana we are hopeful that as the j stained losses will be diminished parent company earnings the earnings of the parent company for the fiscal year 1958 while reflecting current economic conditions still show a net income for the year of 1,907,718 or 1.07 for each share of stock outstanding this compares with 2,732,484 or 1.53 a share for the preceding year construction earnings continued to be depressed largely because of reported losses in connection with certain joint ventures in which your company is a participant particularly the st lawrence seaway projects these recorded losses how ever may be reduced if additional compensation is allowed the ventures by the power authority state of new york in the settlement of very substantial claims the business downturn in the heavy goods industries adversely affected the ore producers with a resulting substantial decline in our realized gross revenue from mining operations as compared with the previous year on the other hand two major items — the realization of non-recurring gams arising from the sale of certain capital assets particularly hous ing projects and an extraordinary dividend from cia san juan s a - limited the decline in parent company earnings total depreciation in the amount of 2,215,355 was charged against 1958 earnings such charges in the main being computed on the declining balance method and amounting to 575,629 more than would have been sustained under the straight line method the comparable increase in depreciation expense in 1957 was 566,362 and in 1956 the excess amounted to 786,029 the current year's net earnings also reflect a charge of 452,578 which amount has been set aside as a reserve for future payments under the company's retirement plan based on profit sharing for the benefit of the com pany's employees partially offsetting this charge however was a restoration to earn ings of an excess credit to this reserve in the amount of 247,578 charged to earnings subsidiary and affiliated companies utah construction company s companies in which it has in dividends paid and for incomi earnings to the parent this i company stock outstanding a preceding year of the current earnings of subsidiary and affiliated ents amounts to 1,411,826 after allowance for s payable upon the distribution of the remaining al to 0.79 for each share of utah construction mpares with 2,689,471 or 1.51 a share for the lower profits from subsidiaries and affiliated eign mining were offset to a large measure by utah the opera c ------- offset to a large me y p lucky me uranium corporation subsidiaries engaged i activities were operated in the aggregate on an unsatisfact the fiscal year the ope i basis di overall results the best criterion of your company's operations is a consolidation of the parent com pany earnings with the company's share of the undistributed 1 958 earnings of subsidiary and affiliated companies such consolidation resulted in an overall profit for the year of 3,319,544 equivalent to 1.86 for each share of utah construction company stock outstanding this compares to 5,421,955 or 3.05 a share for the preceding year and 4,178,183 or 2.35 a share for the fiscal year 1956 viewing the picture as a whole the decline in consolidated earnings can be attributed primarily to lower gross revenue from iron mining operations and decreased gross profit from construction work financial condition the many phases of the parent company and subsidiary company activities necessitated a revamping of the long term lines of credit extended to the company by its lending banks the new line of credit extended to utah construction company during peak periods amounts to 26,000,000 of which total 17,500,000 was in use at the end of the fiscal year net working capital as of october 31 1958 amounted to 6,908,834 ring the year dividends dot january 10 1958 april 1 1958 july 7 1958 october 16 1958 divid.nd 1/50 share of permanente company for each share 1 1/50 share permanente c 15 cash plus 1/200 share cement company 25 cash total stock during the cash paid for fractions the total amount compares with dividends paid in pe previous fiscal year aggregating in value 90(t per share the equity of the stockholders in the company as of october 31 1958 after payment of the dividends above referred to amounted to 25,488,725 or 14.32 per share as compared with 24,380,723 or 13.69 a share at the close of the preceding year these figures are based upon the cost of our investments in other companies if these invest ments are revalued on the basis of the bid market for permanente and lucky me uranium corporation as of the date this letter goes to press and our share of the net worth in other companies as of october 31 1958 the stockholders equity would approx imate 53,388,725 or 27,900,000 more than the book equity which amount com pares with 23,500,000 more at the close of the preceding year your management does not express an opinion as to the value of proven and probable mineral reserves and other assets owned by utah its subsidiaries or affiliated companies however your management believes that potentially the value of such reserves and assets is sub stantially in excess of the book cost the future with divsrsified ommercial building real estate devt nually growing and expanding econ ipany looks to the future with optin eering dredging mining mineral tient and shipping basic as they r the management of utah con and confidence of directors approved a realignment littlefield executive vice president was role he will serve as the principal opera the management requirements brought about by mpany activities in august of 1958 the board f certain corporate responsibilities mr e w is also appointed as general manager in which ig officer of the company responsible for its on behalf of the company the management expresses the clients and customers with whom such a warm am trust that they will become closer throughout the year organization located on five continents and in fourte and gratitude for their conscientious efforts respectfully , sin appreciation rdial relationship e and to the employees of n countries our fullest thi all of marriner s eccles chairman of the board