margins are protected by escalation clauses. In the last four years our forward sales of minerals for future delivery under firm long-term contracts has increased from $125,000,000 to more than $300,000,000 and this, ladies and gentlemen, is solid and substantial progress and is a real measure of our accomplishments in the past four years. Years ago we anticipated the great surge in the demand for energy, and in the interim we think that Utah has achieved a unique and advantageous position in regard to the electric power industry in the West. Our Navajo mine can fuel as much as 4 million kilowatts of generating capacity for 35 yearsup to 16 million tons of coal annually, and our Craig, Colorado, reserves are sufficient for another 1 million to 2 million kilowatts for the same period, equivalent to from 4 to 8 million tons of coal per year. Our uranium reserves remaining after 1970 will be of considerable magnitude. And we have the demonstrated ability to mine, deliver and process, where necessary, both coal and uranium. It may very well be that in the near term coal will be the fuel preferred for reasons of economy, with uranium to follow. But whatever the program, we believe that Utah will have abundant opportunity to participate in it. Not susceptible to precise measurement is the progress that we have made in readying projects that we may be able to bring into being in the years ahead. These new prospects are good portents for the future. Not all of them will come to pass, but those that do will add materially to the backlog of earnings that we hope to achieve. Based on what we have in hand and what we have in prospect, we view the future with confidence. Thank you for the privilege of addressing you. 10 Questions and Answers Q: In view of your ambitious plans for the future, would you comment on any financial requirements for outside financing that may be required? A: This depends a little bit on timing, but if these things do not bunch up on us, it would be our hope and our expectation that we can finance these things from internal sources or from our regular normal borrowing channels. We do not anticipate nor is it in our planning now to go to the market for equity financing. Q: Will all of the losses on the construction project be over in fiscal 1964, and would you give us an idea of the extent of the losses in fiscal 1963 and fiscal 1964? A: Our problem in 1963 and 1964 is a single domestic contract in which we have had very, very substantial losses. The magnitude of these losses, at the moment, I really can't tell you, because we are at the moment in negotiation with the owner and hopefully before the end of our fiscal year, will have reached agreement with the owner on the amount of the adjustment which we are entitled to because of the changed conditions in the contract. We do not expect to get well on the contract, but we would hope to have some substantial price adjustment in recognition of the changed conditions. We will still have a substantial loss and, even with reasonably decent treatment from the owner, it will have an impact and a serious one on our 1964 earnings, as it did in 1963. That contract was substantially completed by July. That work has all been put in place, so that that particular contract will not have an effect on 1965 as it has on 1963 and 1964. Q: I have a question in regard to the use of these coal reserves in the West. There has been some publicity given to a possible large scale power plant, 1 believe, Arizona, New Mexico and particularly California. Is this thing still in negotiation and what are the possible sources of the coal? A: Well, I assume that you have reference to the story that appeared in the press last week, in which a number, I believe, 11 in all, of the western utilities have combined together to form an association, a planning group, to plan out on a common basis the expansion of their power requirements. Now, the 11