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In order to indicate the diversity of the M-K operations, it is of interest to note that the parent company alone performance work during 1957 under 145 separate contracts in 21 states and territories of the United States and two foreign countries. Of this total, 93 were carried over from 1956, and 52 were new contracts entered into in 1957.

It also is significant that forces of MORRISON-KNUDSON and subsidiaries in 1957 carried on 22 dam and powerhouse projects. Only a company exceptionally staffed with high-grade engineers and specialists could take on so many of these large and complicated engineering projects simultaneously. 

EARNIINGS AND DIVIDENDS

At the conclusion of this report, a table is presented summarizing income account data of MORRISON-KNUDSON for the last five years. As is characteristic of companies in heavy construction business, contract revenues tend to vary considerably from year to year. The long-term trend of the Company's business has been upwards virtually since inception, however, and the steady expansion in net worth (uninterrupted for over 35 years) permits to M-K to assume a larger volume of contract business each year. 

The management justifiably is proud of the stability it has achieved in its earning power through the policy of diversification of risk. For the five years ended December 31, 1957, net income after taxes averaged $5,713,000 annually, and for the ten years ended 1957, the figure was $5,485,000 annually. Such regularity of earning power has been displayed by few companies, especially in this industry. 

The performance of MORRISON-KNUDSEN has been especially noteworthy in the years 1956 and 1957. In both of these years, heavy losses were incurred on several sizable contracts in the St. Lawrence Seaway. Despite the absorption of these losses, a satisfactory income level was maintained through porfits eanred on the multiplicity of other contracts being processed. The management realizes that losses can be minimized if a sufficient number of other jobs are taken concurrently and if joint ventures are arranged for the larger contracts carrying the greatest financial risks. 

Attention is directed to the item "Other Income" in the condensed income accounts. This item varies materially from year to year, and the major components in this figure, other than interest earned and paid out, are gains from equipment sales and gains or losses from the sale of securities. On many of its larger jobs, MORRISON-KNUDSON purchases equipment for that particular work. At the conclusion of the job, that portion of the equipment which cannot be used elsewhere is sold and, since it has been depreciated in the interval, profits may result.

From time to time, M-K has acquired investments in certain marketable securities. Over a period of years, these have been reduced by liquidation and profits or losses taken into the income account. As of December 31, 1957, the Company had securities with a market value of $689,673.

MORRISON-KNUDSON has paid regular cash dividends on its common stock for over twenty years. The present rate, established in 1956, is $1.60 per share annually. In addition, the Company from time to time has paid extra dividends in both cash and stock. The last such disbursements were paid early in 1956 out of 1955 income and consisted of 30 cents per share in cash and 5 per cent in stock.

CAPITALIZATION AND FINANCES 

As of December 31, 1957, the debt and capital structure of MORRISON-KNUDSON was as follows:

[[2 Columned Table]]

|---|---|
|3 3/4% Notes 1966|$5,400,000|
|4 1/4% Notes 1971|8,400,000| 
|Equipment Purchase Contracts|3,147,000|
|Bonds and Mortgages of Subsidiary|352,500|
|     Total Long-Term Debt|$17,299,500|
|Common Stock ($10 par value)|20,451,730|
|Capital Surplus|7,978,336|
|Earned Surplus|23,494,755|
|     Total Common Stock and Surplus|$51,924,832|
|     Total Debt and Stockholders' Equity|[[underlined]]$69,324,332[[underlined]]|

The book value of the common stock, as indicated above at $51,924,832, amounted to $25.39 per share on the 2,045,173 shares outstanding. The Company's capital structure is conservative, with debt representing reasonable percentage of the total, and there are adequate resources to handle presently anticipated business. 

In its annual report, MORRISON-KNUDSEN does not segregate all of its current assets as such in its balance sheet. This is a policy adopted by the auditors because of the peculiarities of account and payment procedures on the Company's long-term contracts. However, eximantion