Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 48± 197K
2: EX-11.1 Statement re: Computation of Earnings Per Share 1 8K
3: EX-12.1 Statement re: Computation of Ratios 1 8K
4: EX-13.1 Annual or Quarterly Report to Security Holders 34± 158K
5: EX-18.1 Letter re: Change in Accounting Principles 2± 11K
6: EX-21.1 Subsidiaries of the Registrant 1 5K
7: EX-23.1 Consent of Experts or Counsel 1 6K
8: EX-24.1 Power of Attorney 1 6K
9: EX-24.2 Power of Attorney 10± 49K
10: EX-99.1 Miscellaneous Exhibit 42± 173K
11: EX-99.2 Miscellaneous Exhibit 39± 157K
EX-13.1 — Annual or Quarterly Report to Security Holders
Exhibit 13.1
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEETS
December 31,
-------------------------------
1993 1992
----------- -----------
(In Thousands)
ASSETS
Current assets:
Cash and short-term investments $ 39,785 $ 381,002
Accounts receivable:
Customers 174,716 185,460
Other 94,046 75,941
Inventories:
Products 158,639 155,182
Materials and supplies 186,694 147,407
Prepaid expenses and other 25,675 38,515
---------- ----------
Total current assets 679,555 983,507
---------- ----------
Property, plant and equipment 4,210,575 3,303,918
Less accumulated depreciation 1,436,845 1,027,061
and amortization ---------- ----------
Net property, plant and equipment 2,773,730 2,276,857
---------- ----------
Long-term receivables 111,222 53,896
Other assets 149,560 232,451
---------- ----------
Total assets $3,714,067 $3,546,711
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 408,289 $ 321,377
Current portion of long-term debt
and short-term borrowings 49,256 80,146
---------- ----------
Total current liabilities 457,545 401,523
Long-term debt, less current portion 1,282,424 1,430,546
Accrued postretirement benefits 239,134 144,161
and pension costs
Reclamation and mine shutdown reserves 120,957 62,360
Other liabilities and deferred credits 178,583 87,382
Deferred income taxes 201,553 196,953
Deferred gain on sale of subsidiary 33,953 94,861
interests
Minority interests in consolidated 1,199,269 782,904
subsidiaries
Stockholders' equity:
Preferred stock, par value $1 - at liquidation
value, authorized 50,000,000 shares:
$1.875 Convertible Exchangeable 6,286 7,453
$4.375 Convertible Exchangeable 250,000 250,000
Common stock, par value $1, authorized
300,000,000 shares 165,293 164,818
Capital in excess of par value of common stock 21,868 186,032
Retained earnings (deficit) (81,224) 68,532
Cumulative foreign translation adjustment (7,187) -
Common stock held in treasury - 25,334,600
and 23,943,000 shares, respectively, at cost (354,387) (330,814)
---------- ----------
649 346,021
---------- ----------
Total liabilities and stockholders' equity $3,714,067 $3,546,711
========== ==========
The accompanying notes are an integral part of these financial statements.
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FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF OPERATIONS
Years Ended December 31,
----------------------------------------------------------
1993 1992 1991
---------- ---------- ---------
(In Thousands, Except Per Share Amounts)
Revenues $1,610,581 $1,654,911 $1,579,196
Cost of sales:
Production and delivery 1,146,606 986,274 964,777
Depreciation and amortization 191,938 202,382 204,696
---------- ---------- ----------
Total cost of sales 1,338,544 1,188,656 1,169,473
Exploration expenses 65,080 37,036 37,073
Provision for restructuring 67,145 - -
charges
(Gain) loss on valuation
and sale of assets, net 64,114 - (515)
General and administrative 169,059 177,363 149,272
expenses ---------- ---------- ----------
Total costs and expenses 1,703,942 1,403,055 1,355,303
---------- ---------- ----------
Operating income (loss) (93,361) 251,856 223,893
Interest expense, net (79,882) (51,788) (98,102)
Gain on sale of FCX Class - 100,934 -
A shares
Gain on conversion of FCX notes 44,116 33,753 -
Gain on insurance settlement - - 17,684
Other income, net 2,174 1,640 24,151
---------- ---------- ----------
Income (loss) before income
taxes and minority
interests (126,953) 336,395 167,626
Provision for income taxes (17,854) (75,597) (2,970)
Minority interests in net (income)
loss of consolidated
subsidiaries
61,689 (72,987) (67,953)
---------- ---------- -----------
Income (loss) before changes in
accounting principle (83,118) 187,811 96,703
Cumulative effect of changes in
accounting principle, net of taxes
and minority interests (20,717) - (55,724)
---------- ---------- ----------
Net income (loss) (103,835) 187,811 40,979
Preferred dividends (22,368) (18,677) (889)
---------- ---------- ----------
Net income (loss) applicable
to common stock $ (126,203) $ 169,134 $ 40,090
========== ========== ===========
Primary and fully diluted
net income
(loss) per share:
Before changes in
accounting principle $(.74) $1.17 $.69
Cumulative effect of
changes in
accounting principle (.15) - (.40)
---------- ---------- -----------
$(.89) $1.17 $.29
========== ========== ===========
Average common and common
equivalent
shares outstanding:
Primary 141,595 144,515 139,626
========= ========== ==========
Fully diluted 142,099 145,257 139,772
========= ========== ==========
Cash dividends per common share $1.25 $1.25 $1.25
========= ========== ==========
The accompanying notes are an integral part of these financial statements.
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FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31,
----------------------------------------------------------
1993 1992 1991
---------- ---------- ----------
(In Thousands)
$1.875 Convertible exchangeable
preferred stock:
Balance at beginning of year $ 7,453 $ 9,680 $ 39,730
Conversions to common stock (1,167) (2,227) (30,050)
---------- ---------- ----------
Balance at end of year 6,286 7,453 9,680
---------- ---------- ----------
$4.375 Convertible exchangeable
preferred stock:
Balance at beginning of year 250,000 - -
Issuance of shares - 250,000 -
---------- ---------- ----------
Balance at end of year 250,000 250,000 -
Common stock: ---------- ---------- ----------
Balance at beginning of year 164,818 81,796 72,896
Two-for-one stock split - 81,796 -
Conversions to common stock and other 475 1,226 8,900
---------- ---------- ----------
Balance at end of year 165,293 164,818 81,796
---------- ---------- ----------
Capital in excess of par value
of common stock:
Balance at beginning of year 186,032 352,705 119,180
Two-for-one stock split - (81,796) -
Distribution of FMPO common shares - (92,124) -
Dividends on preferred stock (20,499) - -
Cash dividends on common stock (131,992) - -
Conversions to common stock and other (11,673) 7,247 233,525
---------- ---------- ----------
Balance at end of year 21,868 186,032 352,705
---------- ---------- ----------
Retained earnings (deficit):
Balance at beginning of year 68,532 163,754 298,101
Net income (loss) (103,835) 187,811 40,979
Distribution of FMPO common shares - (84,464) -
Dividends on preferred stock (1,869) (18,677) (889)
Cash dividends on common stock (44,052) (179,892) (174,437)
---------- ---------- ----------
Balance at end of year (81,224) 68,532 163,754
---------- ---------- ----------
Cumulative foreign translation
adjustment:
Balance at beginning of year - - -
Current year adjustment (7,187) - -
---------- ---------- ----------
Balance at end of year (7,187) - -
---------- ---------- ----------
Common stock held in treasury:
Balance at beginning of year (330,814) (219,654) (192,496)
Purchase of 1,326,200, 5,705,100,
and 1,000,000 shares in 1993,
1992, and 1991, respectively (22,229) (108,591) (18,880)
Other (1,344) (2,569) (8,278)
---------- ---------- ----------
Balance at end of year (354,387) (330,814) (219,654)
---------- ---------- ----------
Total stockholders' equity $ 649 $346,021 $388,281
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
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FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOW
Years Ended December 31,
----------------------------------------------------------
1993 1992 1991
---------- ---------- ---------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $(103,835) $ 187,811 $ 40,979
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Cumulative effect of changes in
accounting principle 20,717 - 55,724
Depreciation and amortization 199,506 211,176 211,768
Other noncash charges to income 33,194 - -
Provision for restructuring charges,
net of payments 23,890 - -
(Gain) loss on valuation and sale of
assets, net 64,114 - (515)
Oil and gas exploration expenses 26,710 18,333 26,953
Recognition of unearned revenues
in income (13,978) (10,977) (12,989)
Amortization of debt discount and
financing costs 41,166 51,206 26,566
Gain on sale of FCX Class A shares - (100,934) -
Gain on conversion of FCX notes (44,116) (33,753) -
Gain on insurance settlement - - (17,684)
Deferred income taxes (39,035) 53,079 (36,216)
Minority interests' share of
net income (loss) (61,689) 72,987 67,953
(Increase) decrease in working
capital, net of effect of
acquisitions and dispositions:
Accounts receivable 2,821 (14,672) 16,523
Inventories 4,475 (20,675) (48,049)
Prepaid expenses and other (10,873) (23,037) 2,024
Accounts payable and accrued
liabilities (24,590) (43,001) (15,193)
Reclamation and mine shutdown
expenditures (9,980) (18,038) (16,601)
Payment of IDC tax settlement to
Freeport-McMoRan Royalty Trust - - (28,400)
Other 8,792 10,132 (22,968)
---------- ---------- ----------
Net cash provided by operating
activities 117,289 339,637 249,875
---------- ---------- ----------
Cash flow from investing activities:
Capital expenditures:
Metals (453,122) (367,842) (239,954)
Main Pass (37,427) (117,902) (291,993)
Agricultural minerals (14,743) (86,815) (81,486)
Oil and gas (35,455) (50,493) (141,876)
Real estate - (11,396) (74,411)
Other (27,450) (48,161) (60,675)
Sale of assets:
Oil and gas 95,250 - 461,543
Geothermal 23,000 - -
Other 26,961 - -
Acquisition of RTM, net of
cash acquired (10,390) - -
Purchase of indirect interest in PT-FI - (211,892) -
Other 4,375 8,962 20,851
---------- ---------- ----------
Net cash used in investing activities $(429,001) $(885,539) $(408,001)
========== ========== ==========
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FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOW
Years Ended December 31,
----------------------------------------------------------
1993 1992 1991
---------- ---------- ---------
(In Thousands)
Cash flow from financing activities:
Proceeds from issuance of:
Convertible Exchangeable
Preferred Stock $ - $245,700 $ -
Convertible Subordinated Notes - - 290,605
Zero Coupon Convertible Subordinated
Debentures - - 194,243
FCX Zero Coupon Convertible Subordinated
Notes - - 218,560
FRP depositary units - 425,996 -
FCX Class A common shares - 174,142 -
FCX Special Preference Stock - 217,867 -
FCX Step-Up Preferred Stock 340,700 - -
FCX Mandatory Redeemable
Gold-Denominated
Preferred Stock 220,390 - -
Proceeds from sale of PT-FI
common shares - 212,485 -
Purchase of Freeport-McMoRan Inc. common
shares (22,229) (108,591) (18,880)
Purchase of FCX Class A common shares (16,482) (15,253) -
Distributions paid to minority interests:
FCX (74,848) (46,051) (30,945)
FRP (121,180) (109,450) (74,269)
Distribution to FM Properties Inc. - (28,019) -
Net proceeds from infrastructure
financing 80,000 - -
Proceeds from debt 575,376 851,447 826,119
Repayment of debt (814,920) (797,735) (1,030,690)
Cash dividends paid:
Common stock (175,890) (179,677) (173,989)
Preferred stock (22,384) (16,882) (1,040)
Other 1,962 11,322 352
---------- ---------- ----------
Net cash provided by (used in)
financing activities (29,505) 837,301 200,066
---------- ---------- ----------
Net increase (decrease) in cash and
short-term investments (341,217) 291,399 41,940
Cash and short-term investments at
beginning of year 381,002 89,603 47,663
---------- ---------- ----------
Cash and short-term investments at
end of year $ 39,785 $ 381,002 $ 89,603
========== ========== ==========
Interest paid $ 94,557 $ 95,787 $ 126,171
========== ========== ==========
Income taxes paid $ 15,925 $ 28,123 $ 64,789
========== ========== ==========
The accompanying notes, which include information in Notes 1, 2, 3, 4, and
5 regarding noncash transactions, are an integral part of these financial
statements.
FREEPORT-McMoRan INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation. The consolidated financial statements of
Freeport-McMoRan Inc. (FTX or the Company) include all majority-owned
subsidiaries and publicly traded partnerships. Investments in
joint ventures and partnerships (other than publicly traded entities)
are generally reflected using the proportionate consolidation method
in accordance with standard industry practice. Reclassifications were
made to prior year financial statements to conform
to the 1993 presentation. All significant intercompany transactions
have been eliminated.
Cash and Short-Term Investments. FTX considers highly liquid investments
purchased with a maturity of three months or less to be cash equivalents.
Each consolidated entity's cash and short-term investments are not
available to FTX until a distribution is paid to all owners of an entity's
equity securities.
Inventories. Inventories are generally stated at the lower of average cost
or market and removed at average cost.
Property, Plant and Equipment. Property, plant and equipment is carried at
cost. Mineral exploration costs are expensed as incurred, except in the
year the property is deemed to contain a viable mineral deposit, in which
case they are capitalized. Development costs, which include interest
incurred during the construction and development period, are capitalized.
Expenditures for replacements and improvements are capitalized.
Depreciation expense for mining and production assets, including mineral
interests, is determined using the unit-of-production method based on
estimates of recoverable reserves. Other assets are depreciated on a
straight-line basis over estimated useful lives of 15 to 30 years for
buildings and 3 to 25 years for machinery and equipment.
Oil and Gas Exploration and Development Costs. FTX follows the successful
efforts method of accounting for its oil and gas operations. Costs of
leases, productive exploratory wells, and development activities are
capitalized. Other exploration costs are expensed. Depreciation and
amortization is determined on a field-by-field basis using the unit-of-
production method. Gain or loss is included in income when properties are
sold.
Environmental Remediation and Compliance. Environmental expenditures that
relate to current operations are expensed or capitalized as appropriate.
Expenditures resulting from the remediation of an existing condition caused
by past operations, that do not contribute to current or future revenues,
are expensed. Liabilities are recognized for remedial activities when the
efforts are probable and the cost can be reasonably estimated.
FTX accrues estimated future expenditures to restore properties and
related facilities to a state required to comply with current environmental
and other regulations over the life of the properties. As of December 31,
1993, FTX had accrued $63.6 million for abandonment and restoration of its
non-Main Pass sulphur assets ($8.1 million reflected in accounts payable),
approximately one-half of which will be reimbursed by third parties, and
$43.1 million for reclamation of land relating to phosphate rock mining
activities ($4.6 million reflected in accounts payable). Based on current
costs, laws, and regulations, FTX estimates that its share of costs
relating to the abandonment and restoration of its Main Pass sulphur mine
will approximate $35 million, with essentially all costs to be incurred
after mine closure in approximately 30 years. These estimates can be
expected to be revised over time due to changes in government regulations,
operations, technology, and inflation.
Hedging. P.T. Freeport Indonesia Company (PT-FI) has a price protection
program for virtually all of its estimated copper sales to be priced in
1994 at an average floor price of $.90 per pound, while allowing full
benefit from prices above that amount. Based on an average 1994 forward
market price of approximately $.82 per pound of copper (December 31, 1993
forward prices per London Metal Exchange, LME), the market value of these
contracts is approximately $56 million. The contracts are with a
diversified group of financially strong counterparties.
Rio Tinto Minera, S.A. (RTM) has forward contracts for approximately
61 percent of its estimated 1994 gold production at $383.80 per ounce and
38 percent of its estimated 1995 gold production at $394.80 per ounce.
Based on a market price of $390.65 per ounce of gold (December 31, 1993
price per LME), these contracts are in a loss position of approximately $2
million. Additionally, RTM has a policy of eliminating significant
exposure to copper price fluctuations by hedging purchases of concentrate
at its smelter through the use of forward contracts. At December 31, 1993,
RTM sold forward approximately 4.2 million pounds of its concentrate
inventory at approximately $.78 per pound of copper.
Concentrate Sales. Revenues associated with PT-FI's sales of metal
concentrates are recorded net of royalties, treatment costs, and
amortization of the cost of its price protection program. PT-FI's
concentrate sales agreements provide for provisional billings based on
world metals prices, primarily the LME, with actual settlement generally
based on appropriate future metals prices. Revenues, recorded initially
using provisional prices, are adjusted using current prices. At December
31, 1993, copper sales totaling 213.4 million pounds remained to be
contractually priced at various times in 1994. As a result of PT-FI's
price protection program, these pounds are recorded at an average price of
$.90 per pound. Gold sales are priced according to individual contract
terms.
Foreign Translation Adjustment. The functional currency for RTM is the
Spanish peseta. RTM's assets and liabilities are translated to U.S.
dollars using the exchange rate in effect at the balance sheet date. FTX's
share of the cumulative results of the translation adjustment is recorded
as a separate component of stockholders' equity. Results of operations are
translated using the average exchange rates during the period. Gains and
losses resulting from foreign currency transactions, which were not
material, are included in net income.
Net Income Per Share. Primary net income per share is computed by dividing
net income applicable to common stock by the average common and common
equivalent shares outstanding during the year. Fully diluted net income
per share is computed assuming that all convertible securities, if
dilutive, were converted at the beginning of the period or date of
issuance, whichever is later.
Changes in Accounting Principle. During 1993, the Company adopted the
following changes to accounting policies:
Periodic Scheduled Maintenance Costs - Costs related to periodic scheduled
maintenance (turnarounds) were previously capitalized when incurred and
amortized generally over six months to two years. Effective January 1,
1993, the method of accounting was changed to expense these costs when
incurred.
Deferred Charges - The accounting for deferred charges was changed to
provide for deferral of only those costs that directly relate to the
acquisition, construction, and development of assets and to the issuance of
debt and related instruments. Previously, certain other costs that
benefitted future periods were amortized over the periods benefitted.
Management Information Systems - Costs of management information systems
(MIS) equipment and software that have a material impact on periodic
measurement of net income are capitalized and amortized over their
estimated productive lives. Other MIS costs, including equipment and
purchased software that involve relatively immaterial amounts (currently
individual expenditures of less than $.5 million) and short estimated
productive lives (currently less than three years) are charged to expense
when incurred. Previously, most expenditures for MIS equipment and
purchased software were capitalized. The accounting for MIS costs was
changed to recognize the rapid rate of technology change in MIS which
results in short productive lives of equipment and software and a need for
continuing investments.
The changes in accounting policy were adopted to improve the measurement of
operating results by reporting cash expenditures as expenses when incurred
unless they are directly related to long-lived asset additions. In
addition, the administrative costs of accounting for assets will be reduced
by not capitalizing and amortizing relatively insignificant expenditures
that do not have a material effect on measuring periodic net income.
If these changes in accounting principle had not been adopted, 1993
income before change in accounting principle would not have been materially
different from the amount reported. If the changes in accounting principle
had been applied in prior years, 1992 and 1991 net income would not have
been materially different from amounts reported.
2. PUBLIC SUBSIDIARIES
Freeport-McMoRan Copper & Gold Inc. (FCX). The
Company's metals operations are conducted through its publicly traded
subsidiary, FCX. FCX's operations are conducted primarily through its
subsidiaries, PT-FI which principally operates the Indonesian copper and
gold mining facilities and, RTM which operates a copper smelter in Spain.
In January 1991, the Government of Indonesia increased its ownership
in PT-FI from 8.9 percent to 10 percent by purchasing PT-FI shares owned by
FCX for $18.1 million. In December 1991, PT-FI and the Indonesian
government signed a new contract of work (New COW) which has a 30-year term
with two 10-year extensions permitted. Under the New COW, FCX pays the
Indonesian government a royalty of 1.5 percent to 3.5 percent on the value
of copper sold, net of delivery costs and treatment and refining charges,
and a 1 percent royalty on the sales value of gold and silver ($9.5 million
in 1993, $15.7 million in 1992, and $10.5 million in 1991). The New COW
required FCX to increase the ownership by Indonesian entities in PT-FI to
20 percent, which was achieved through the sale of 10 percent of PT-FI
common stock to an entity owned by Indonesian investors on December 31,
1991. FTX and FCX guaranteed the buyer's financing for this purchase and,
consequently, deferred gain on this sale. In December 1992, FCX purchased
49 percent of the capital stock of the publicly traded Indonesian entity
which owned the 10 percent of PT-FI sold in 1991 and the deferred gain was
offset against the cost of the additional indirect PT-FI interest. In
December 1993, PT-FI issued shares of its stock to FCX in exchange for the
conversion of certain notes (Note 5). FCX's direct ownership in PT-FI
totaled 80.8 percent and 80.0 percent at December 31, 1993 and 1992,
respectively. In 1994, PT-FI issued additional shares of its stock to FCX
for conversion of the remaining notes, increasing FCX's direct ownership in
PT-FI to 81.3 percent. The sale and purchase prices were based on the fair
market value of FCX Class A common stock at the time of the agreements. At
December 31, 1993, PT-FI's net assets totaled $184.3 million, including
$24.6 million of retained earnings.
In July 1992, FCX sold publicly 8.6 million shares of its Class A
common stock, resulting in an after-tax gain to FTX of $100.9 million, and
9.0 million depositary shares. Each depositary share represents 2 16/17
shares of its 7% Convertible Exchangeable Special Preference Stock, has a
cumulative annual cash dividend of $1.75 (payable quarterly) and a $25
liquidation preference, and is convertible at the option of the holder into
approximately 1.009 shares of FCX Class A common stock (equivalent to a
conversion price of $24.77 per share of FCX Class A common stock).
Beginning August 1, 1995, FCX may redeem these depositary shares for cash
at $26.225 per share (declining ratably to $25 per share in March 2002)
plus accrued and unpaid dividends.
In July 1993, FCX sold publicly 14.0 million depositary shares
representing its Step-Up Convertible Preferred Stock. Each depositary
share has a cumulative annual cash dividend of $1.25 through August 1, 1996
and thereafter $1.75 (payable quarterly) and a $25 liquidation preference,
and is convertible at the option of the holder into approximately 0.826
shares of FCX Class A common stock (equivalent to a conversion price of
$30.28 per share of FCX Class A common stock). From August 1, 1996 and
prior to August 1, 1999, FCX may redeem these depositary shares for
approximately 0.826 shares of FCX Class A common stock per depositary share
if the market price of FCX Class A common stock exceeds certain specified
levels. Thereafter, FCX may redeem these depositary shares at $25 per
share (payable in FCX Class A common stock, cash or a combination of both,
at FCX's option) plus accrued and unpaid dividends.
In August 1993, FCX sold publicly 6.0 million depositary shares
representing its Gold-Denominated Preferred Stock. Each depositary share
has a cumulative quarterly cash dividend equal to the value of 0.000875
ounces of gold and is subject to mandatory cash redemption in August 2003
for the value of 0.1 ounces of gold. The depositary shares are recorded at
their offering price and are being reflected as a hedge of future gold
sales for accounting purposes. Based on the December 31, 1993 closing
market price, these depositary shares had a market value of $258 million.
In January 1994, FCX sold publicly 4.3 million depositary shares
representing its Gold-Denominated Preferred Stock, Series II, for net
proceeds of $158.5 million. Each depositary share has a cumulative
quarterly cash dividend equal to the value of 0.0008125 ounces of gold and
is subject to mandatory cash redemption in February 2006 for the value of
0.1 ounces of gold.
FTX reflects FCX preferred stock and related dividends as minority
interests in its financial statements. FTX's ownership of the FCX Class A
and Class B common stock combined as of December 31, 1993 and 1992, was
71.8 percent and 73.2 percent, respectively.
In March 1993, FCX acquired a 65 percent interest in RTM, which
operates a copper smelter and a gold mine with an estimated remaining life
of fewer than four years, by investing approximately $50 million, excluding
transaction costs, to be used by RTM for working capital requirements and
capital expenditures, including funding a portion of the costs of the
expansion of its smelter production capacity from its current 150,000
metric tons of metal per year to 180,000 metric tons of metal per year by
mid-1995. In December 1993, RTM redeemed the remaining 35 percent interest
for approximately $19 million. Selected balance sheet information
reflecting the allocation of the purchase price to the assets and
liabilities acquired is as follows (in thousands):
Current assets $101,454
Current liabilities (158,445)
Property, plant and equipment, net 277,170
Other assets 5,358
Long-term debt (38,941)
Accrued postretirement benefits and
other liabilities (176,206)
--------
Net cash investment $ 10,390
========
Freeport-McMoRan Resource Partners, Limited Partnership (FRP). The
Company's fertilizer and sulphur operations and its Main Pass oil
operations are conducted through its publicly traded affiliate, FRP. FTX
owned 51.3 percent of the FRP units outstanding at December 31, 1993 and
1992.
FRP and IMC Fertilizer, Inc. (IMC) formed a joint venture (IMC-Agrico
Company), operated by IMC, effective July 1, 1993, for their respective
phosphate fertilizer businesses, including phosphate rock and uranium.
FRP's "Current Interest", reflecting cash to be distributed from ongoing
operations, initially is 58.6 percent and its "Capital Interest",
reflecting the purchase or sale of long-term assets or any required capital
contributions to IMC-Agrico Company is 46.5 percent initially. These
ownership percentages decline in annual increments ultimately to 40.6
percent for the fiscal year ending June 30, 1998 and remain constant
thereafter.
FRP proportionately consolidates its interest in IMC-Agrico Company.
The assets of IMC-Agrico Company are not available to FRP until
distributions are paid by the joint venture. At December 31, 1993, the net
assets of IMC-Agrico Company totaled $1.5 billion. In January 1994,
IMC-Agrico Company declared a $52.8 million distribution payable in February
1994, of which $30.9 million is due to FRP.
Publicly owned FRP units have cumulative rights to receive quarterly
distributions of 60 cents per unit through the distribution for the quarter
ending December 31, 1996 (the Preference Period) before any distributions
may be made to FTX. FRP no longer intends to supplement distributable cash
with borrowings. Therefore, FRP's future distributions will be dependent
on the distributions received from IMC-Agrico Company and future cash flow
from FRP's sulphur and oil operations.
On January 21, 1994, FRP declared a distribution of 60 cents per
publicly held unit ($30.3 million) and 12 cents per FTX-owned unit ($6.2
million) payable February 15, 1994, bringing the total unpaid distributions
due FTX to $239.2 million. During the Preference Period the unpaid FTX
distributions will be payable, after a 60 cents per unit quarterly
distribution is paid to all unitholders, equal to the lesser of any
deficiency or one-half of the amount by which distributable cash exceeds a
60 cents per unit distribution. Remaining distributable cash will be paid
to all unitholders in accordance with their percentage interests. After
the Preference Period distribution deficiencies on FTX-owned FRP units will
be paid in the manner described above after any deficiencies in the
cumulative quarterly distribution to the public are paid and a quarterly
distribution of 60 cents per unit has been paid to all unitholders.
In February 1992, FRP sold publicly 19.5 million new units, resulting
in a gain to FTX of $136.6 million, which was deferred because of the FRP
public unitholders' distribution priority. FTX recognized a pretax loss of
$126.3 million in 1993 and earnings of $10.5 million in 1992, which
represents its proportionate share of FRP's earnings. This included
recognition of $62.2 million and $41.8 million, respectively, of the gain
deferred by FTX. The remaining deferred gain will be recognized in future
periods when distributions are not paid to FTX such that its operating
results will include its proportionate share of FRP's earnings. Subsequent
to the recognition of the balance of the deferred gain, if additional FRP
distributions are not paid to FTX in any quarter, FTX will recognize a
smaller share of any FRP net income, or a larger share of any FRP net loss,
than that which would be recognized based on FTX's ownership interest in
FRP.
3. FM PROPERTIES INC. (FMPO)
In June 1992, FTX transferred substantially
all of its domestic oil and gas properties and real estate held for
development by it and certain of its subsidiaries, excluding FRP, to a
partnership which is currently 99.8 percent owned by FMPO. FTX holds a
minimal general partnership interest in the partnership and serves as its
managing general partner. In May 1992, FTX declared a distribution of one
FMPO common share for each ten FTX common shares owned. Selected financial
information of FMPO is as follows:
[Enlarge/Download Table]
Inception Through Year Ended
May 31, 1992 December 31, 1992 December 31, 1993
------------- ----------------- -----------------
(In Thousands)
Balance Sheet:
Current assets $ 42,103 $ 43,679 $105,539
Current liabilities,
excluding current
portion of long-term debt 13,302 23,886 40,528
Oil and gas properties, net 444,676 399,825 -
Investment in real estate, net 248,647 263,097 286,459
Total assets 741,618 712,166 395,750
Long-term debt
(guaranteed by FTX) 493,305 473,763 173,796
Stockholders' equity 176,588 164,474 145,660
Income Statement:
Revenues 5,968 24,836
Operating loss (14,319) (18,913)
Net loss (12,114) (18,814)
Cash Flow:
Operations 29,731 100,933
Investing activities (35,180) 199,359
Financing activities 8,157 (300,517)
During 1993, FMPO sold all of its producing oil and gas properties and
used the proceeds, a portion of which was received in 1994, to reduce its
long-term debt. As of January 21, 1994, FMPO's long-term debt was
approximately $123 million and it had approximately $30 million of cash.
4. RESTRUCTURING AND VALUATION CHARGES
Restructuring Charges. FTX recognized expense of $67.1 million during
1993 for the restructuring of its administrative organization
(including personnel related costs, the cost to downsize its computing
and MIS structure, and a write-off of excess facilities and other
miscellaneous assets), principally resulting from
formation of IMC-Agrico Company (Note 2). See Management's Discussion and
Analysis of Financial Condition and Results of Operations for information
about a reclassification of restructuring charges from those previously
reported resulting from views expressed by the Securities and Exchange
Commission staff.
Asset Sales/Recoverability. In 1993, FTX sold its ownership interest in a
nonproducing oil and gas property recognizing a gain of $69.1 million, and
FRP sold assets, primarily certain previously mined phosphate rock acreage
recognizing a gain of $11.8 million. FRP also sold its remaining interests
in producing geothermal properties for $63.5 million, consisting of $23.0
million in cash and interest-bearing notes totaling $40.5 million (included
in other assets), recognizing a $31.0 million charge to expense and
recording a $9.0 million charge for impairment of its undeveloped
geothermal properties.
FTX recognized expense of $105.0 million during
1993 for the recoverability of certain assets, primarily FRP's investments
in the non-Main Pass sulphur assets because of persistent weak market
conditions and the Main Pass oil investment caused by a fourth-quarter
decline in oil prices.
5. LONG-TERM DEBT
December 31,
------------------------------
1993 1992
----------- ----------
(In Thousands)
Notes payable:
FTX credit agreement, average rate
4.1% in 1993 and 5.1% in 1992 $ 388,000 $ 660,000
ALatieF Joint Venture bank loan (Note 9) 60,000 -
Other, primarily RTM short-term borrowings,
average rate 11% 57,709 9,769
---------- ---------
Total notes payable 505,709 669,769
---------- ---------
Publicly traded notes and debentures:
10 7/8% Senior Subordinated Debentures,
due 2001 125,358 131,000
6.55% Convertible Subordinated Notes,
face amount of $373.0 million,
effective rate of 9.825%, due 2001 311,863 309,763
Zero Coupon Convertible Subordinated
Debentures, face amount of $749.7 million,
effective rate of 9%, due 2006 247,427 226,577
FCX Zero Coupon Exchangeable Subordinated
Notes, face amount of $386.1 million in 1993
and $708.7 million in 1992 102,039 173,583
----------- -----------
Total publicly traded notes and debentures 786,687 840,923
----------- -----------
RTM gold and silver denominated loans, average
rate 1.3% 39,284 -
----------- -----------
1,331,680 1,510,692
Less current portion and short-term
borrowings 49,256 80,146
---------- -----------
$1,282,424 $1,430,546
========== ===========
Notes Payable. In June 1993, FTX amended its credit agreement (the Credit
Agreement) to extend its maturity and to include PT-FI as a borrower. The
Credit Agreement is structured as a three year revolving line of credit
followed by a 3 1/2 year reducing revolver. The Credit Agreement is part
of an $800.0 million committed credit facility subject to a borrowing base,
redetermined annually by the banks, which establishes maximum consolidated
debt for FTX. As of December 31, 1993, $547.5 million was available under
the current borrowing base and $412.0 million of borrowings were unused
under the credit facility.
FTX guarantees any borrowings under the Credit Agreement and is required to
retain control of FRP and PT-FI. Under certain circumstances FTX could be
required to pledge a portion of its equity in FCX and FRP. PT-FI also
assigned its existing and future sales contracts and pledged its rights
under the New COW and its accounts receivable and other assets as security
for its borrowings under the Credit Agreement. The Credit Agreement
provides for working capital requirements, specified coverage of fixed
charges, and restrictions on other borrowings.
RTM has several short-term credit facilities with banks. The stated rates
of interest on these loans range from 3.7 percent to 13 percent. RTM has
pledged certain of its assets as security for these loans.
Publicly Traded Notes and Debentures. Beginning in 1996 FTX may redeem its
10 7/8% Senior Subordinated Debentures at principal plus accrued interest.
Annual sinking fund payments of $20.4 million, plus accrued interest, begin
in 1997. Based on the December 31, 1993 closing market price, this debt
had a market value of $132.6 million.
In February 1991, FTX issued $373.0
million of 6.55% Convertible Subordinated Notes convertible into 44.64
shares of FTX common stock per $1,000 principal amount (equivalent to a
conversion price of $22.40 per FTX share). FTX may redeem these notes for
cash at 89.75 percent of principal (increasing ratably to 100 percent over
the term of the notes) plus accrued interest. Based on the December 31,
1993 closing market price, this debt had a market value of $344.1 million.
In August 1991, FTX sold $750.0 million face amount of Zero Coupon
Convertible Subordinated Debentures convertible, at the holder's option,
into 13.21 shares of FTX common stock per $1,000 principal amount (subject
to adjustment in certain events), with FTX having the right to pay cash in
lieu of all or part of such FTX common stock. FTX may redeem these
debentures for cash at the issue price plus accrued original issue
discount. The debentures have a contingent payment feature (if the market
price of FTX common stock exceeds certain specified amounts) payable in FTX
common stock, cash or a combination of both, at FTX's option. The
debentures contain purchase rights at the holder's option, as of August 5,
1996 or 2001, at the issue price plus accrued original issue discount.
Based on the December 31, 1993 closing market price, this debt had a market
value of $246.5 million.
In July 1991, FCX sold $1.035 billion face amount
of Zero Coupon Exchangeable Subordinated Notes. The net proceeds were
loaned to PT-FI under similar terms. During 1993 and 1992, $322.6 million
and $326.4 million face amount of these notes were exchanged for which FCX
issued 4.8 million shares of its Class A common stock in 1993 and 4.5
million shares of its Class A common stock and paid $7.9 million in cash in
1992, with FTX recognizing a pretax gain of $44.1 million in 1993 and $33.8
million in 1992. The remaining $386.0 million face amount of notes were
exchanged for 5.8 million shares of FCX Class A common stock in January
1994. As a result of the issuance by FCX of its Class A common stock, PT-
FI issued shares of its stock to FCX (Note 2).
RTM Gold and Silver Denominated Loans. RTM has loans payable with 107,800
ounces of gold (9,200 ounces payable quarterly) and 953,100 ounces of
silver (105,900 ounces payable quarterly) carried at the market price of
gold ($331.70 per ounce) and silver ($3.70 per ounce) at the date of FCX's
acquisition. The loans are accounted for as a hedge. Interest is
calculated on the outstanding ounces at the current prices on the date of
payment. Based on the December 31, 1993 LME quotes for gold and silver,
this debt had a market value of approximately $47 million.
Interest Rate Swaps. FTX has an 8.2 percent interest rate exchange
agreement on $150.0 million of financing until April 1996. FTX and FRP
also have agreements fixing the interest rate on $77.9 million of financing
at an average of 10.2 percent through 1999. PT-FI has an 8.3 percent
interest rate exchange agreement on $85.7 million of financing at December
31, 1993, reducing $14.3 million annually through 1999. Based on market
conditions at December 31, 1993, unwinding these interest swaps would cost
an estimated $34.1 million.
Capitalized Interest. Capitalized interest totaled $62.2 million in 1993,
$84.7 million in 1992, and $67.3 million in 1991.
Minimum Principal Payments. The minimum principal payments for debt
scheduled for each of the five succeeding years based on the amounts
outstanding at December 31, 1993, assuming the terms of the Credit
Agreement are not extended, are $49.3 million in 1994, $19.6 million in
1995, $68.9 million in 1996, $141.0 million in 1997, and $184.6 million in
1998.
6. INCOME TAXES
Effective January 1, 1992, FTX adopted Statement of
Financial Accounting Standards No. 109, the new accounting standard for
income taxes. The cumulative adjustment to taxes and the impact on 1992
earnings from operations were not material. The components of the net
deferred tax asset (included in other assets) and liability were as
follows:
[Download Table]
1993 1992
Consolidated Tax Group Consolidated Tax Group
______________________ ______________________
FTX FCX FTX FCX
_________ _________ _________ ________
(In Thousands)
Deferred tax assets:
Net operating loss carryforwards $ 58,650 $ - $ 15,483 $ -
Alternative Minimum Tax credits 43,242 - 59,998 -
Other tax carryforwards 41,814 29,465 13,665 16,760
Deferred compensation,
postretirement
and pension benefits 44,820 - 36,544 -
Other 53,149 - 13,233 -
Less valuation allowance (41,814) (29,465) (13,665) (16,760)
_________ _________ _________ ________
Total deferred tax assets 199,861 - 125,258 -
_________ _________ _________ ________
Deferred tax liabilities:
Property, plant and equipment (100,499) (199,956) (91,153) (195,760)
Other (10,527) (1,597) - (1,193)
_________ _________ _________ ________
Total deferred tax liability (111,026) (201,553) (91,153) (196,953)
_________ _________ _________ ________
Net deferred tax asset
(liability) $ 88,835 $(201,553) $ 34,105 $(196,953)
========= ========= ========= =========
The net deferred tax asset is from FTX's domestic operations whereas
the net deferred tax liability relates to PT-FI's operations. Recognition
of a deferred tax asset is dependent upon FTX's evaluation that it is more
likely than not that it will ultimately be realized from future income
generated by its domestic operations. FTX believes that no valuation
allowance is needed for its net operating loss (NOL) carryforwards and
alternative minimum tax (AMT) credits because historically it has been able
to utilize substantially all of its tax benefits and tax-planning
strategies are available that would enable it to utilize these deferred tax
assets; the NOL carryforwards do not expire until the years 2007 and 2008,
and the AMT credits can be carried forward indefinitely. FTX has provided
a valuation allowance for the other tax credit and charitable contribution
carryforwards as they would be utilized subsequent to the NOL carryforwards
and AMT credits and substantially all expire between 1994 and 2000. A
valuation allowance has been provided at FCX for all foreign tax and AMT
credits, as these would only be utilized should FCX be required to pay
regular U.S. tax, which FTX views as unlikely because Indonesian taxes
exceed U.S. taxes. In addition, RTM, which is subject to a separate tax
jurisdiction (Spain), has NOL carryforwards totaling approximately $108
million ($91 million pre-acquisition) which expire from 1994 to 1998. FTX
has provided a valuation allowance for the full amount of these
carryforwards as RTM has not generated taxable income in recent years.
FTX does not provide deferred taxes for certain financial and income
tax reporting differences related to FCX and FRP which are considered
permanent in duration. These differences resulted primarily from gains
recognized for financial reporting purposes upon the sale of FCX shares and
FRP units. As of December 31, 1993, these basis differences were
approximately $185 million for FCX and $216 million for FRP. If ownership
in these subsidiaries falls below 50 percent, FTX would be required to
charge earnings for taxes on the difference between the book and tax basis
of its investment.
The provision (credit) for income taxes consists of the following:
Years Ended December 31,
-----------------------------------
1993 1992 1991
------- -------- --------
(In Thousands)
Current income taxes:
Federal $(2,497) $(24,565) $ 7,403
Foreign 54,994 45,996 20,194
State 4,391 1,087 6,582
------- -------- --------
56,888 22,518 34,179
------- -------- --------
Deferred income taxes:
Federal (54,730) (10,359) (106,035)
Foreign 4,600 63,438 43,446
------- -------- --------
(50,130) 53,079 (62,589)
------- -------- --------
Total income taxes $ 6,758 $ 75,597 $(28,410)
======= ======== ========
Reconciliations of the differences between income taxes computed at
federal statutory tax rates and income taxes recorded are as follows:
[Enlarge/Download Table]
Years Ended December 31,
---------------------------------------------------------------
1993 1992 1991
------------------- ------------------- --------------------
Percent Percent Percent
of Income of Income of Income
Before Before Before
Income Income Income
Amount Taxes Amount Taxes Amount Taxes
------- ----- -------- ----- -------- -----
(Dollar Amounts In Thousands)
Income taxes computed at the
federal statutory income tax rate $(61,193) 35 % $114,374 34% $ 14,466 34 %
Increase (decrease) attributable to:
FCX dividend 6,456 (3) 5,799 2 - -
Statutory depletion (2,016) 1 (5,126) (2) (3,892) (9)
Partnership minority interests 45,057 (26) (3,253) (1) (1,575) (4)
Sale of subsidiary interests - - (45,794) (14) - -
Minimum, state, and foreign taxes 18,462 (11) 13,855 4 20,011 47
Deferred taxes no longer required - - (1,152) - (60,586) (142)
Sales of assets and other (8) - (3,106) (1) 3,166 7
------- --- -------- -- -------- ---
Income tax provision (credit) $ 6,758 (4)% $ 75,597 22% $(28,410) (67)%
======= === ======== == ======== ===
Sources of deferred income taxes for 1991 are as follows (in thousands):
Mineral exploration and development $ 14,306
Deferred compensation, postretirement
and pension benefits (27,280)
Intangible oil and gas costs 9,748
Capitalized interest 16,993
Sales of assets (39,723)
Settlements of sales contracts 3,404
Accelerated depreciation 28,975
Tax carryovers (30,985)
Deferred taxes no longer required (60,586)
Price protection program 3,751
Other, net 18,808
--------
$(62,589)
========
7. STOCKHOLDERS' EQUITY
Preferred Stock. FTX's $1.875 Cumulative Convertible Exchangeable
Preferred Stock, each with a $25 liquidation value, is convertible at the
holder's option into FTX common stock at $10.91 per share.
In March 1992, FTX issued 5.0 million shares of $4.375 Convertible
Exchangeable Preferred Stock, each with a $50 liquidation value,
convertible into FTX common stock at a conversion price of $23.46 per
share. Beginning March 1, 1997, FTX may redeem this preferred stock for
cash at $52.1875 per share (declining ratably to $50 per share in March
2002) plus accrued and unpaid dividends.
Common Stock. FTX has a regular annual cash dividend of $1.25 per share.
FTX's 10 7/8% Senior Subordinated Debentures contain a restriction on the
payment of cash dividends and capital stock purchases ($108.8 million
available as of December 31, 1993). This amount will be increased by
future earnings and FTX stock issuances, and will be decreased by future
dividend payments, losses, and FTX stock purchases.
Stock Options. FTX's stock option plans provide for the issuance of stock
options and stock appreciation rights (SARs) at no less than market value
at time of grant. The 1992 Stock Option Plan authorizes FTX to grant
options to employees to purchase up to 8.0 million shares, including SARs,
and under the 1992 Stock Incentive Unit Plan up to 1.5 million stock
incentive units (SIUs), which are similar to SARs, may be granted to
employees. The 1988 Stock Option Plan for Non-Employee Directors
authorizes FTX to grant options to purchase up to 1.5 million shares.
Under certain options, FTX will pay cash to the optionee equal to an amount
based on the maximum individual federal income tax rate in effect at the
time of exercise. Generally, stock options terminate 10 years from the
date of grant. A summary of stock options outstanding, including SARs and
SIUs, follows:
1993 1992
---------------------- ---------------------
Average Average
Number of Option Number of Option
Options Price Options Price
---------- ----- ---------- -----
Beginning of year 13,386,365 $17.58 9,277,162 $15.84
Granted 1,358,800 18.37 5,728,209 19.44
Exercised (416,639) 14.35 (1,288,627) 13.75
Expired (585,536) 18.87 (330,379) 18.63
---------- ----------
End of year 13,742,990 17.69 13,386,365 17.58
========== ==========
At December 31, 1993, stock options representing 8.4 million shares
were exercisable at an average option price of $17.23 per share. Options
for 2.1 million shares, .8 million shares, and 1.2 million shares were
available for new grants under the 1992 and 1988 Stock Option Plans and the
1992 SIU plan, respectively, as of December 31, 1993.
8. PENSION AND OTHER EMPLOYEE BENEFITS
The FTX pension plan covers substantially all United States and certain
overseas employees, excluding employees covered by collective bargaining
agreements and most nonresident aliens, many of whom are covered by other
plans. Benefits are based on compensation levels and years of service.
FTX funds its pension liability in accordance with Internal Revenue Service
guidelines. Additionally, for those participants in the qualified defined
benefit plan whose benefits are limited under federal income tax laws, FTX
sponsors an unfunded, nonqualified plan. Information on the plans follows:
December 31,
-----------------------
1993 1992
--------- ---------
(In Thousands)
Actuarial present value of benefit obligations
(projected unit credit method):
Vested $ 93,609 $ 63,329
Nonvested 2,236 2,363
--------- ---------
Accumulated benefit obligations $ 95,845 $ 65,692
========= =========
Projected benefit obligations
(projected unit credit method) $(130,585) $(114,991)
Less plan assets at fair value 107,917 96,947
--------- ---------
Projected benefit obligations in excess of
plan assets (22,668) (18,044)
Unrecognized net loss from past experience
different from that assumed 16,518 10,996
Unrecognized prior service costs 4,833 6,239
Unrecognized net asset at January 1, 1986,
being recognized over 19 years (4,142) (4,521)
--------- ---------
Accrued pension cost $ (5,459) $ (5,330)
========= =========
In determining the present value of benefit obligations for 1993 and
1992, FTX used a 7 percent and 8.5 percent discount rate, a 5 percent rate
of increase in future compensation levels, and a 9 percent average expected
rate of return on assets, respectively.
Net pension cost includes the following:
Years Ended December 31,
---------------------------
1993 1992 1991
------- ------- -------
(In Thousands)
Service cost during the period $ 8,573 $ 7,376 $ 7,410
Interest cost on projected benefit obligations 9,739 8,609 7,745
Actual return on plan assets (9,388) (10,220) (10,640)
Net amortization and deferral 1,423 3,689 5,712
Termination benefits 26 1,813 531
------- ------- -------
Net pension cost $10,373 $11,267 $10,758
======= ======= =======
RTM has a contractual obligation to supplement the amounts paid to
retired employees. Based on an assumed discount rate of 8 percent, the
liability accrued for such payments totaled $79.4 million at December 31,
1993 ($76.6 million for retirees and $2.8 million for current employees).
Since the initial acquisition, RTM has recorded expense of $5.2 million
compared with cash payments of $8.0 million. This obligation is unfunded.
The operator of IMC-Agrico Company maintains non-contributory pension
plans that cover substantially all of its employees who perform services
for IMC-Agrico Company. As of July 1, 1993, the actuarial present value of
the vested projected benefit obligation was $10.1 million based on a
discount rate of 8.5 percent and a 5 percent rate of increase in future
compensation levels. As of December 31, 1993, no funding of such plans had
occurred. FRP's share of the expense related to these plans totaled $1.5
million for 1993.
FTX provides certain health care and life insurance benefits for
retired employees. Effective January 1, 1991, FTX adopted Statement of
Financial Accounting Standards No. 106 (FAS 106) requiring current accrual
for postretirement benefits other than pensions, recording a $125.1 million
charge as the cumulative effect of an accounting change. The FAS 106
expense totaled $12.4 million in 1993 ($1.9 million for service cost and
$10.5 million in interest for prior period services), $12.5 million in 1992
($1.6 million for current year service cost and $10.9 million in interest
for prior period services), and $12.6 million in 1991 ($2.0 million for
current year service cost and $10.6 million in interest for prior period
services). Summary information of the plan is as follows:
December 31,
-----------------------
1993 1992
--------- ---------
(In Thousands)
Actuarial present value of accumulated
postretirement obligation:
Retirees $118,418 $ 93,611
Fully eligible active plan participants 14,066 22,596
Other active plan participants 14,083 21,548
-------- --------
Total accumulated postretirement obligation 146,567 137,755
Unrecognized net loss (14,237) (6,254)
-------- --------
Accrued postretirement benefit cost $132,330 $131,501
======== ========
In determining the FAS 106 amounts, FTX used an initial health care
cost trend rate of 11.5 percent for 1993 (12 percent for 1992), decreasing
1/2 percent per year until reaching 6 percent. A 1 percent increase in the
trend rate would increase the FAS 106 amounts by approximately 10 percent.
The discount rate used was 7 percent in 1993 and 8.5 percent in 1992. FTX
has the right to modify or terminate these benefits.
The operator of IMC-Agrico Company will provide certain health care
benefits for future retired employees. At July 1, 1993, the accumulated
postretirement obligation was $16.6 million, which was unfunded, with FRP's
share of FAS 106 expense being $.4 million. In determining the FAS 106
amounts, the initial health care trend cost rate used was 15 percent,
decreasing gradually to 5.5 percent in 2003 and thereafter, and the
discount rate used was 8.5 percent. Employees are not vested and such
benefits are subject to change.
FTX has an Employee Capital Accumulation Program which permits
eligible employees to defer a portion of their pretax earnings. FTX also
has an unfunded excess benefits plan for employees to defer amounts in
excess of the limitations imposed by the Internal Revenue Code. FTX
matches employee deferrals up to 5 percent of basic earnings through an
investment in FTX common shares. FTX has other employee benefits plans,
certain of which are related to Company performance, which costs are
recognized currently in general and administrative expense. The cost of
these plans, reflecting the varying level of FTX earnings, totaled $7.6
million in 1993, $15.9 million in 1992, and $11.3 million in 1991.
9. COMMITMENTS AND CONTINGENCIES
Litigation. While FTX is a defendant in various lawsuits incurred in the
ordinary course of its businesses, management believes the potential
liability in such lawsuits is not material or is adequately covered by
insurance, third party indemnity agreements or reserves previously
established. FTX maintains liability and other insurance customary in its
businesses, with coverage limits deemed prudent.
Sulphur Tanker. During 1991, one of FRP's sulphur tankers ran aground
resulting in a constructive loss and a $17.7 million insurance settlement
gain. FRP has an agreement whereby beginning in mid-1994 a third party
will provide and operate a replacement sulphur tanker for at least fifteen
years for minimum annual payments of $12.8 million.
Infrastructure Asset Sales. During 1993, FCX entered into a joint venture
agreement with P.T. ALatieF Nusakarya Corporation (ALatieF), an Indonesian
investor, which provides for the sale of certain portions of the to-be-
constructed infrastructure assets and certain existing assets by PT-FI to a
joint venture or ventures (the ALatieF Joint Venture) owned one-third by
PT-FI and two-thirds by ALatieF for total consideration of $270.0 million.
The acquired assets will be made available to PT-FI and its employees and
designees under arrangements which will provide the ALatieF Joint Venture
with a guaranteed minimum rate of return on its investment. Funding of the
ALatieF Joint Venture is expected to be provided by $90.0 million in equity
contributions from the ALatieF Joint Venture partners and $180.0 million in
debt financing, which is expected to be guaranteed by PT-FI, FCX or both.
The sale of the first group of assets to the ALatieF Joint Venture was
completed in December 1993 for a price of $90.0 million. The sale was
partially financed with a $60.0 million medium-term loan facility which is
guaranteed by PT-FI. The variable rate loan has a 5 percent per year
amortization with a balloon payment after five years. The ALatieF Joint
Venture is consolidated and no gain or loss was recorded on the sale. The
sales which are anticipated for 1994 and later are subject to the execution
of definitive agreements and certain Indonesian governmental approvals.
In December 1993, PT-FI announced the execution of a Letter of Intent
with Duke Energy Corp. (Duke Energy), a wholly owned affiliate of Duke
Power Company, and PowerLink Corporation (PowerLink), a subsidiary of
Northstar Energy Corporation, pursuant to which PT-FI would sell its
existing and to-be-constructed power generation and transmission assets and
certain other power-related assets to a joint venture (the Power Joint
Venture) whose ownership consists of Duke Energy (30 percent), PowerLink
(30 percent), PT-FI (30 percent), and an Indonesian investor (10 percent).
The total value of the transaction is estimated at $200 million and is
expected to be concluded in two phases. The first sale, representing the
existing assets, is expected to exceed $100 million and to occur in mid-
1994. The final sale, representing the to-be-constructed expansion-related
assets, is expected to occur during the first half of 1995. Under the
agreement, the Power Joint Venture will own these assets and be responsible
for providing the electrical power services required by PT-FI at its
mining, milling, and support operations in Irian Jaya, Indonesia, including
the power services required for the expansion of ore throughput to 115,000
metric tons of ore milled per day. The transaction is subject to the
execution of definitive agreements between PT-FI and the Power Joint
Venture, financing, and certain Indonesian governmental approvals.
PT-FI is proceeding with plans to sell other non-operating assets
under terms whereby the purchaser will operate the assets and provide
services to PT-FI and its employees and designees.
Environmental. FTX has made, and will continue to make, expenditures at
its operations for protection of the environment. FTX is subject to
contingencies as a result of environmental laws and regulations. The
related future cost is indeterminable due to such factors as the unknown
timing and extent of the corrective actions that may be required and the
application of joint and several liability. However, FTX believes that
such costs will not have a material adverse effect on its operations or
financial position.
As part of FRP's 1987 acquisition of certain fertilizer assets, the
seller agreed to indemnify FRP for any environmental costs in excess of an
aggregate $5.0 million on certain identified sites. FRP accrued the $5.0
million at the time of acquisition. The seller has assumed control of
these sites, and based on management's review of the potential liabilities
and the seller's financial condition, FRP concluded that it is remote that
FRP would have any additional liability. FTX believes its exposure on
other domestic abandoned environmental sites will not exceed amounts
accrued and expects that any costs would be incurred over a period of
years.
FTX believes it is in compliance with all applicable Indonesian
environmental laws, rules, and regulations. Based on current Indonesian
environmental regulations, eventual mine closure and reclamation costs, at
the mine in Irian Jaya, is not expected to be material.
RTM's capital expenditures for 1994 are expected to include
approximately $18 million to modify its sulphuric acid plants, including
expanding their capacity, to comply with certain environmental standards in
Spain. Additionally, at December 31, 1993 FCX had an accrual of $10.3
million related to RTM's impending mine closure and the eventual closure of
its smelter.
Long-Term Contracts and Operating Leases. At December 31, 1993, RTM had
purchase commitments totaling $25.6 million related to the expansion of its
smelter. In addition, it had commitments to purchase concentrate from
third parties (excluding PT-FI) of 305,000 metric tons in 1994, 295,000
metric tons in 1995, 260,000 metric tons in 1996, 140,000 metric tons in
1997, and a total of 580,000 metric tons from 1998-2002, at then market
prices. During 1993, PT-FI supplied RTM with approximately 90,000 metric
tons of copper concentrate and is expected to supply approximately 150,000
metric tons in 1994, providing for approximately 20 percent and 33 percent,
respectively, of RTM's requirements in those years. Beginning in 1996, PT-
FI is expected to provide RTM with approximately one-half of its copper
concentrate requirements.
FTX's minimum annual contractual charges under noncancellable long-
term contracts and operating leases which expire during the period 1994 to
2009 totals $378.4 million, with $42.7 million in 1994, $47.9 million in
1995, $32.6 million in 1996, $29.3 million in 1997, and $28.7 million in
1998. Total rental expense under long-term contracts and operating leases
amounted to $43.0 million, $31.4 million, and $31.4 million in 1993, 1992,
and 1991, respectively.
10. SEGMENT FINANCIAL INFORMATION
FTX's business segments consist of the following: Metals, which includes
FCX's Indonesian copper/gold operations and the RTM smelting operations in
Spain; Agricultural Minerals, which includes FRP's fertilizer and sulphur
businesses; and Energy, which includes the oil and gas operations of FTX
and FRP, and the uranium operations of FRP. The Company's foreign
operations are primarily conducted by FCX.
[Enlarge/Download Table]
Year Ended December 31, 1993
--------------------------------------------------------------------
Agricultural
Metals Minerals Oil and Gas Other Total
---------- ---------- ----------- --------- ----------
(In Thousands)
Revenues $ 925,932(a) $619,332 $ 56,680 $ 8,637 $1,610,581(b)
Production and delivery 567,148 552,578 13,014 13,866 1,146,606
Depreciation and amortization 67,906 70,803 42,000 11,229 191,938
Exploration expenses 33,748 2,261 26,708 2,363 65,080
Provision for restructuring charges - - - 67,145 67,145
Loss on valuation and sale of assets, net - - - 64,114 64,114
General and administrative expenses 81,399 58,091 13,169 16,400 169,059
---------- ---------- -------- --------- ----------
Operating income (loss) $ 175,731 $ (64,401) $(38,211) $(166,480) $ (93,361)
========== ========== ======== ========= ==========
Earnings by sources(c) $ 173,515 $ (55,889) $(39,749) $ (37,805) $ 40,072
========== ========== ======== ========= ==========
Capital expenditures $ 453,122 $ 46,270(d) $ 40,394 $ 28,411 $ 568,197
========== ========== ======== ========= ==========
Total assets $2,116,653 $1,194,304 $ 68,062 $ 335,048 $3,714,067
========== ========== ======== ========= ==========
[Enlarge/Download Table]
Year Ended December 31, 1992
--------------------------------------------------------------------
Agricultural
Metals Minerals Oil and Gas Other Total
---------- ---------- ----------- --------- ----------
(In Thousands)
Revenues $ 714,315 $ 799,032 $127,799 $ 13,765 $1,654,911(b)
Production and delivery 308,948 638,503 28,861 9,962 986,274
Depreciation and amortization 48,272 66,299 79,942 7,869 202,382
Exploration expenses 12,185 4,777 18,394 1,680 37,036
General and administrative expenses 68,481 72,828 25,155 10,899 177,363
---------- ---------- ----------- --------- ----------
Operating income $ 276,429 $ 16,625 $(24,553) $(16,645) $ 251,856
========== ========== ======== ========= ==========
Earnings by sources(c) $ 283,591 $ 17,993 $(28,200) $(19,888) $ 253,496
========== ========== ======== ========= ==========
Capital expenditures $ 367,842 $ 170,224(d) $ 55,580 $ 48,160 $ 641,806
========== ========== ======== ========= ==========
Total assets $1,694,005 $1,233,085 $180,987 $438,634 $3,546,711
========== ========== ======== ========= ==========
[Enlarge/Download Table]
Year Ended December 31, 1991
----------------------------------------------------------------------------------
Energy
------------------------
Agricultural
Metals Minerals Oil and Gas Uranium Other Total
---------- ---------- ----------- ------- -------- ----------
(In Thousands)
Revenues $ 467,522 $ 880,452 $184,768 $37,729 $ 8,725 $1,579,196(b)
Production and delivery 204,353 691,233 41,815 16,705 10,671 964,777
Depreciation and amortization 38,397 55,434 103,787 2,711 4,367 204,696
Exploration expenses 6,502 1,219 27,322 - 2,030 37,073
Gain on sale of assets, net - - - - (515) (515)
General and administrative expenses 40,550 61,645 36,210 1,282 9,585 149,272
---------- ---------- -------- ------- -------- ----------
Operating income $ 177,720 $ 70,921 $(24,366) $17,031 $(17,413) $ 223,893
========== ========== ======== ======= ======== ==========
Earnings by sources(c) $ 181,197 $ 78,926 $(23,079) $17,070 $ (6,585) $ 247,529
========== ========== ======== ======= ======== ==========
Capital expenditures $ 239,954 $ 294,366(d) $196,552 $ 13 $ 70,024 $ 800,909
========== ========== ======== ======= ======== ==========
Total assets $1,157,615 $1,143,169 $698,038 $17,196 $549,347 $3,565,365
========== ========== ======== ======= ======== ==========
<FN>
a. Includes the operations of RTM (Note 2) since its acquisition, with revenues of $288.4 million and a net loss of
$15.7 million during 1993 and identifiable assets of $335.5 million as of December 31, 1993.
b. Export sales to Asia, Australia, Latin America, and Canada approximated 13 percent, 20 percent, and 22 percent
of total revenues for 1993, 1992, and 1991, respectively. Sales to Japanese companies by FCX were 19 percent,
15 percent, and 11 percent of total revenues for 1993, 1992, and 1991, respectively.
c. Operating income plus other income, less provision for restructuring charges and the gain/loss on valuation and
sale of assets from the Statements of Operations.
d. Includes development costs ($16.6 million in 1993 and $20.8 million in 1992) and capitalized interest ($11.1
million in 1993, $17.7 million in 1992, and $14.7 million in 1991) associated with the Main Pass sulphur project
prior to becoming operational for accounting purposes July 1, 1993.
11. SUPPLEMENTARY MINERAL RESERVE, PRODUCTION, AND SALES INFORMATION
(UNAUDITED) Proved and probable mineral reserves, including proved oil
reserves, are as follows:
[Enlarge/Download Table]
December 31,
-------------------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ------- -------
(In Thousands)
Copper-thousands of recoverable pounds(a) 26,800 20,900 21,800 13,900 8,303
Gold-recoverable ounces(a) 39,500(b) 32,100 32,400 19,500 8,100
Silver-recoverable ounces(a) 85,200(b) 44,700 50,000 34,700 27,186
Sulphur-long tons(c) 38,637 41,570 42,780 44,125 45,265
Phosphate rock-short tons(d) 215,156 208,655 206,183 205,752 100,408
Oil-barrels(e) 9,962 13,861 18,496 18,785 -
<FN>
a. Recoverable content reflects an estimated recovery rate of 90 percent for copper, 80 percent for gold, and 70
percent for silver (contained concentrates less normal smelting and refining allowances). Recoverable production
and reserves are used synonymously with payable production and reserves.
b. Includes .4 million ounces of gold and 8.5 million ounces of silver attributable to RTM.
c. Includes 38.6 million tons in 1993, 39.0 million tons in 1992, 39.1 million tons in 1991-1989, net to FRP before
royalties, at Main Pass, subject to a 12.5 percent federal royalty based on net mine revenues.
d. For 1993 represents FRP's share, based on its current Capital Interest ownership, of the IMC-Agrico Company
reserves. Contains an average of 68 percent bone phosphate of lime. Approximately 3.6 tons of phosphate rock
are used to produce one ton of phosphoric acid and one pound of uranium oxide. During 1990, FRP entered into
exclusive long-term purchase options for properties containing approximately 111 million tons of phosphate rock
reserves.
e. Reflects only Main Pass reserves. Includes 4.9 million, 6.8 million, 6.8 million, and 7.0 million barrels
attributable to FRP minority interests for 1993-1990, respectively.
Production, Internal Consumption, Sales, and Average Realized Prices are as
follows.
[Enlarge/Download Table]
<CAPTION
Years Ended December 31,
-------------------------------------------------------
1993 1992 1991 1990 1989
METALS ------- ------- ------- ------- -------
PT-FI (In Thousands, Except Average Realizations)
Copper (recoverable pounds)
Production 658,400 619,100 466,700 361,800 317,400
Sales 645,700 651,800 439,700 348,000 317,800
Average realized price(a) $.90(b) $1.03 $1.01 $1.20 $1.24
Gold (recoverable ounces)
Production 787 641 421 284 139
Sales 763 679 398 273 140
Average realized price $361.74 $340.11 $358.76 $378.30 $383.28
Silver (recoverable ounces)
Production 1,541 1,643 1,568 1,749 1,971
Sales 1,481 1,804 1,621 1,664 1,979
Average realized price $4.15 $3.72 $3.87 $4.61 $5.39
RTM (since acquisition)
Smelter operations
Concentrate treated (metric tons, MT) 330 - - - -
Anode production (MT) 136 - - - -
Cathode production (MT) 103 - - - -
Gold operations
Production (recoverable ounces) 133 - - - -
Average realized price $369.06 - - - -
AGRICULTURAL MINERALS
Sales
Phosphate fertilizers (short tons)(c)
Diammonium phosphate 2,303 2,760 2,841 2,568 2,563
Monoammonium phosphate
Granular 423 509 476 438 359
Powdered 55 - - - -
Granular triple superphosphate 565 715 710 717 680
Phosphate rock (short tons)(c) 3,840 3,441 2,247 1,455 1,572
Sulphur (long tons)(d) 1,973 2,346 2,528 2,491 2,557
ENERGY
Oil (barrels)
Sales 3,443 4,884 351 - -
Average realized price $14.43 $15.91 $13.34 - -
<FN>
a. Excludes adjustments for prior year concentrate sales or price
protection program costs.
b. FCX's price protection program eliminates
exposure to declines in copper prices below an average of $.90 per pound
for its estimated sales through 1994. Excluding amounts recognized under
this program, the realization for 1993 would have been $.82 per pound.
c. Beginning July 1, 1993, reflects FRP's 46.5 percent share of the assets
of IMC-Agrico Company during the year ended June 30, 1994.
d. Includes 1,138,800 tons, 1,654,300 tons, 1,612,400 tons, 1,564,000
tons, and 1,539,000 tons for 1993-1989, respectively, which represent
internal consumption and Main Pass start-up sales that are not included in
sales for accounting purposes.
12. SUMMARIZED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
[Download Table]
Net Income (Loss)
Net Income Per Common Share
(Loss) -----------------
Operating Applicable To Fully
Revenues Income (loss) Common Stock Primary Diluted
---------- ------------- ------------ ------- -------
(In Thousands, Except Per Share Amounts)
1993
1st Quarter (a,b) $ 300,821 $ (42,908) $ (55,346) $(.39) $(.39)
2nd Quarter (a,c) 421,818 (162,999) (77,379) (.54) (.54)
3rd Quarter (a,d) 402,353 97,568 26,786 .19 .19
4th Quarter (e) 485,589 14,978 (20,264) (.14) (.14)
---------- --------- ---------
$1,610,581 $ (93,361) $(126,203) (.89) (.89)
========== ========= =========
1992
1st Quarter $ 363,485 $ 28,477 $ 3,698 $ .03 $ .03
2nd Quarter 511,438 110,309 23,102 .16 .16
3rd Quarter (f) 367,340 52,847 123,137 .86 .76
4th Quarter (g) 412,648 60,223 19,197 .14 .14
---------- --------- ---------
$1,654,911 $ 251,856 $ 169,134 1.17 1.17
========== ========= =========
<FN>
a. The quarterly results have been restated to reflect the cumulative
effect of the changes in accounting principle (Note 1) and the RTM
investment on a fully consolidated basis. FCX previously reported this
investment using the equity method of accounting because FCX anticipated
reducing its interest below 50 percent within one year of the initial
investment in RTM. FCX is now considering alternative forms of
financing.
b. Includes a $47.4 million charge ($18.5 million to net income or $.13
per share) related to administrative restructuring costs and the sale of
FRP's producing geothermal assets, and an $8.0 million gain ($5.3
million to net income or $.04 per share) related to the conversion of
FCX notes. Also includes a $20.7 million charge ($.15 per share), net
of taxes and minority interests, for the cumulative effect of the
changes in accounting principle (Note 1).
c. Includes a $165.6 million charge ($74.6 million to net income or $.52 per
share) related to administrative restructuring costs, the recoverability
of certain assets, and other nonrecurring charges. Also includes a
$25.3 million gain ($16.7 million to net income or $.12 per share)
related to the conversion of FCX notes.
d. Includes a $70.2 million gain ($46.1 million to net income or $.32 per
share) primarily from the sale of an oil and gas property.
e. Includes a $64.3 million charge ($22.8 million to net income or $.16
per share) primarily related to the recoverability of FRP's Main Pass
oil investment, a $10.7 million gain ($3.6 million to net income or $.03
per share) from FRP's sale of certain previously mined phosphate rock
acreage, and a $13.7 million gain ($8.9 million to net income or $.06
per share) related to the conversion of FCX notes.
f. Includes a $100.9 million gain ($.70 per primary and $.56 per fully
diluted share) on sale of FCX Class A common stock and a $19.6 million
gain ($.14 per primary and $.11 per fully diluted share) related to the
conversion of FCX notes.
g. Includes a $14.2 million gain ($.10 per share) related to the
conversion of FCX notes.
REPORT OF MANAGEMENT
Freeport-McMoRan Inc. (the Company) is responsible for the preparation of
the financial statements and all other information contained in this Annual
Report. The financial statements have been prepared in conformity with
generally accepted accounting principles and include amounts that are based
on management's informed judgments and estimates.
The Company maintains a system of internal accounting controls
designed to provide reasonable assurance at reasonable costs that assets
are safeguarded against loss or unauthorized use, and that transactions are
executed in accordance with management's authorization and recorded and
summarized properly. The system is tested and evaluated on a regular basis
by the Company's internal auditors. In accordance with generally accepted
auditing standards, the Company's independent public accountants have
developed an overall understanding of our accounting and financial controls
and have conducted other tests as they consider necessary to support their
opinion on the financial statements.
The Board of Directors, through its Audit Committee composed solely of
non-employee directors, is responsible for overseeing the integrity and
reliability of the Company's accounting and financial reporting practices
and the effectiveness of its system of internal controls. The independent
public accountants and internal auditors meet regularly with, and have
access to, this committee, with and without management present, to discuss
the results of their audit work.
James R. Moffett Richard C. Adkerson
Chairman of the Board and Senior Vice President and
Chief Executive Officer Chief Financial Officer
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF FREEPORT-McMoRan INC.:
We have audited the accompanying balance sheets of Freeport-McMoRan Inc.
(the Company), a Delaware Corporation, and consolidated subsidiaries as of
December 31, 1993 and 1992, and the related statements of operations, cash
flow and stockholders' equity for each of the three years in the period
ended December 31, 1993. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits. We did not audit the
financial statements of IMC-Agrico Company (the Joint Venture). The
Company's share of the Joint Venture constitutes 22 percent of assets and
14 percent of revenues of the Company's totals as of December 31, 1993 and
the year then ended, respectively. Those statements were audited by other
auditors whose report has been furnished to us and our opinion, insofar as
it relates to the amounts included for the Company's interest in the Joint
Venture, is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
and the report of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the report of other auditors,
the financial statements referred to above present fairly, in all material
respects, the financial position of Freeport-McMoRan Inc. and consolidated
subsidiaries as of December 31, 1993 and 1992 and the results of its
operations and its cash flow for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Notes 8, 6, and 1 to the consolidated financial
statements, effective January 1, 1991, the Company changed its method of
accounting for postretirement benefits other than pensions, effective
January 1, 1992, changed its method of accounting for income taxes, and
effective January 1, 1993, changed its method of accounting for periodic
scheduled maintenance costs, deferred charges, and costs of management
information systems.
Arthur Andersen & Co.
New Orleans, Louisiana,
January 25, 1994
[Enlarge/Download Table]
FINANCIAL HIGHLIGHTS
Years Ended December 31,
------------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
(In Millions, Except Per Share Amounts)
Revenues $1,610.6 $1,654.9 $1,579.2 $1,580.6 $1,958.2
Operating income (loss) $ (93.4) $ 251.9 $ 223.9 $ 731.5 $ 360.3
Net income (loss) from:
Operations $ (68.0) $ 34.4 $ 90.8 $ 13.4 $ 72.8
Nonrecurring gains/(losses), net (a) (37.5) 134.7 5.0 257.3 26.3
Changes in accounting principle (20.7) - (55.7) - -
-------- -------- -------- -------- --------
Net income (loss) applicable to common stock $ (126.2) $ 169.1 $ 40.1 $ 270.7 $ 99.1
======== ======== ======== ======== ========
Net income (loss) per primary share from:
Operations $ (.48) $ .24 $ .65 $ .12 $ .60
Nonrecurring gains/(losses), net (a) (.26) .93 .04 2.23 .22
Changes in accounting principle (.15) - (.40) - -
-------- -------- -------- -------- --------
Net income (loss) applicable to common stock $ (.89) $ 1.17 $ .29 $ 2.35 $ .82
======== ======== ======== ======== ========
Average common shares outstanding 141.6 144.5 139.6 115.2 120.4
Earnings by sources:
Metals
Indonesian copper/gold $ 179.7 $ 283.6 $ 181.2 $ 205.7 $ 206.2
Spanish copper smelter/gold (6.2) - - - -
North American gold - - - 4.8 16.1
Agricultural minerals (55.9) 18.0 78.9 64.9 123.2
Energy
Oil and natural gas(b) (39.7) (28.2) (23.1) (45.6) 6.3
Uranium - - 17.1 13.5 18.5
Geothermal - - - 13.2 29.7
Other (37.8) (19.9) (6.6) 4.5 (8.0)
-------- -------- -------- -------- --------
Income from segment operations(c) $ 40.1 $ 253.5 $ 247.5 $ 261.0 $ 392.0
======== ======== ======== ======== ========
Dividends per common share:
Cash $ 1.25 $ 1.250 $ 1.25 $ 1.25 $ 1.25
Share - .175 - - -
-------- -------- -------- -------- --------
$ 1.25 $ 1.425 $ 1.25 $ 1.25 $ 1.25
======== ======== ======== ======== ========
At December 31:
Property, plant and equipment, net $2,773.7 $2,276.9 $2,253.8 $2,204.5 $2,290.8
Long-term debt, including current portion and
short-term borrowings 1,331.7 1,510.7 1,942.0 1,591.0 1,728.8
Minority interests 1,199.3 782.9 293.6 309.3 508.1
Stockholders' equity .6 346.0 388.3 337.4 138.3
Total assets 3,714.1 3,546.7 3,565.4 3,101.3 3,070.5
<FN>
a. In 1993, includes the loss on the restructuring activities and the loss on valuation and sale of assets
($66.2 million or $0.46 per share) as discussed further in Management's Discussion and Analysis, net of a
gain on the conversion of Freeport-McMoRan Copper & Gold (FCX) securities ($28.7 million or $0.20 per
share); in 1992, from the sale and conversion of FCX securities; in 1991, from an insurance settlement gain
($7.3 million or $0.05 per share), net of a loss on the valuation of assets ($2.3 million or $0.02 per
share); and in 1990 and 1989, from the sale of assets.
b. Excludes $69.1 million gain in 1993, $4.3 million gain in 1991, $14.6 million gain in 1990, and $2.3
million gain in 1989 from the sale of oil and gas properties.
c. Operating income plus other income, less provision for restructuring charges and the gain/loss on valuation
and sale of assets from the Statements of Operations.
COMMON SHARES
Our common shares trade on the New York Stock Exchange (NYSE) under the
symbol "FTX". The FTX share price is reported daily in the financial press
under "FrptMc" in most listings of NYSE securities. At year-end 1993 the
number of holders of record of our common stock was 26,885.
Common share price ranges on the NYSE composite tape during 1993 and 1992:
1993 1992
---------------- ----------------
HIGH LOW HIGH LOW
------ ------ ------ ------
FIRST QUARTER $22.63 $17.00 $22.44 $19.50
SECOND QUARTER 22.25 18.13 21.06 19.38
THIRD QUARTER 19.38 17.50 20.50 18.75
FOURTH QUARTER 19.88 15.75 19.38 16.50
COMMON SHARE DIVIDENDS
In early 1992 our Board of Directors fixed the amount of the regular
quarterly common stock cash dividend, on a post-split basis, at $.3125 per
common share, an increase of $.125 per common share in the regular
quarterly dividend, and at the same time eliminated the special quarterly
common stock cash dividend of $.125 per common share. Cash dividends paid
during 1993 and 1992:
1993
-------------------------------------------
AMOUNT RECORD PAYMENT
PER SHARE DATE DATE
--------- ------------- -------------
$.3125 FEB. 15, 1993 MARCH 1, 1993
$.3125 MAY 14, 1993 JUNE 1, 1993
$.3125 AUG. 16, 1993 SEPT. 1, 1993
$.3125 NOV. 15, 1993 DEC. 1, 1993
1992
-------------------------------------------
AMOUNT RECORD PAYMENT
PER SHARE DATE DATE
--------- ------------- -------------
$.3125 FEB. 18, 1992 MARCH 2, 1992
$.3125 MAY 15, 1992 JUNE 1, 1992
$.3125 AUG. 17, 1992 SEPT. 1, 1992
$.3125 NOV. 16, 1992 DEC. 1, 1992
Dates Referenced Herein and Documents Incorporated by Reference
| This ‘10-K’ Filing | | Date | | Other Filings |
|---|
| |  |
| | 8/1/99 |
| | 6/30/98 |
| | 3/1/97 |
| | 12/31/96 | | 10-K405, 10-K405/A |
| | 8/5/96 |
| | 8/1/96 |
| | 8/1/95 |
| | 6/30/94 | | 10-Q |
| Filed on: | | 3/31/94 | | 10-Q, DEF 14A |
| | 2/15/94 |
| | 1/25/94 |
| | 1/21/94 |
| For Period End: | | 12/31/93 |
| | 12/1/93 |
| | 11/15/93 |
| | 9/1/93 |
| | 8/16/93 |
| | 7/1/93 |
| | 6/1/93 |
| | 5/14/93 |
| | 3/1/93 |
| | 2/15/93 |
| | 1/1/93 |
| | 12/31/92 |
| | 12/1/92 |
| | 11/16/92 |
| | 9/1/92 |
| | 8/17/92 |
| | 6/1/92 |
| | 5/31/92 |
| | 5/15/92 |
| | 3/2/92 |
| | 2/18/92 |
| | 1/1/92 |
| List all Filings |
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