1975 operations mineral sales backlog record utah's mineral sales backlog is a state ment of the value of mineral products to be delivered in future years under exist ing contracts excluding sales agree ments held by affiliates at year-end the company's backlog stood at 6.45 billion 94 of this total is represented by con tracts containing escalation clauses offering substantial protection against future cost increases just as higher commodity prices led to our strong earnings gains price adjustments played a substantial part in increasing the mineral sales backlog to record levels after allowing for 1975 mineral sales the 1975 1.6 billion backlog increase alone is more than twice utah's 1975 revenues of 686 million general electric and utah merger plan on december 15 1975 the boards of directors of general electric company and utah international inc announced that they had authorized the negotiation of a definitive merger agreement the proposed merger is to be accomplished through a tax-free exchange of 1.3 shares of general electric common stock for each share of utah common stock based upon stock prices at the time of the announcement utah shareholders would receive shares of general electric company with a value of approximately 1.9 billion consummation of the merger is sub ject to the negotiation of a mutually satisfactory merger agreement and to approval by the boards of directors and shareholders of both companies the merger is also subject to requisite governmental approvals in our view general electric's world wide business experience would augment our own and allow us to continue to participate successfully in utah's rapidly expanding markets access to general electric's resources and sophisticated research capabilities would enable the company to take advantage of more and greater opportunities in the mining field for both utah and general electric shareholders and their employees we believe this merger represents an unusual occasion for enlarged pros pects with a greater degree of diversity outlook as we look ahead we anticipate that 1976 will once again witness record earn ings for utah international however the full profit level capability of utah's existing operations will probably not be realized in 1976 because of the indicated low rate of steel production in japanese european and u.s steel mills and by the need for utah to replenish working stockpiles of coking coal to normal oper ating levels and to rearrange shipping schedules disrupted by the labor prob lems that afflicted operations during the third and fourth quarters of 1975 we believe these conditions to be temporary and as the economies of the major indus trial areas recover and show renewed economic strength the business climate for utah international will strengthen correspondingly increased output and higher shipments should carry utah's profits into new and higher ground in 1976 looking still further ahead prospects for bringing into production new mineral properties from reserves already well identified appear promising in coking coal iron ore steam coal and uranium the sharply expanded exploration expenditures for oil and gas and for solid minerals are expected to result in dis covery of new reserves and the expan sion of existing reserves finally we submit that the company's impressive record of progress over the past decade reflects the skill and the dedication of its employees throughout the world personally and on behalf of the shareholders and the board of direc tors we express our appreciation to those who have contributed so signifi cantly to the success of the company respectfully submitted chairman of the board i utah international inc either directly or through its subsidiaries and affiliates owns and operates mining properties in the western hemisphere and australia maintains an extensive minerals exploration program worldwide and conducts petroleum ocean shipping and land development operations major revenues result from the sale of coking coal steam coal uranium copper iron ore oil and natural gas excluding sales agreements held by affiliates at year-end the company had a mineral sales backlog of 6.45 billion under existing contracts primarily with japanese european and united states purchasers