SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1994
Commission File Number: 1-8124
Freeport-McMoRan Inc.
Incorporated in Delaware 13-3051048
(IRS Employer Identification No.)
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes[X] No[ ]
On September 30, 1994, there were issued and outstanding 137,849,245 shares of
the registrant's Common Stock, par value $1 per share.
FREEPORT-McMoRan INC.
TABLE OF CONTENTS
Page
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Operations 4
Statements of Cash Flow 6
Notes to Financial Statements 8
Remarks 10
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 11
Part II. Other Information 21
Signature 22
Exhibit Index E-1
FREEPORT-McMoRan INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS (Unaudited)
September 30, December 31,
1994 1993
------------ ------------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 28,794 $ 39,785
Accounts receivable 263,319 268,762
Inventories 387,540 345,333
Prepaid expenses and other 16,429 25,675
---------- ----------
Total current assets 696,082 679,555
Property, plant and equipment, net 3,243,457 2,773,730
Long-term receivables 53,296 111,222
Other assets 145,522 149,560
---------- ----------
Total assets $4,138,357 $3,714,067
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 502,721 $ 408,289
Current portion of long-term debt and
short-term borrowings 102,487 49,256
---------- ----------
Total current liabilities 605,208 457,545
Long-term debt, less current portion 1,437,129 1,282,424
Accrued postretirement benefits and
pension costs 257,904 239,134
Reclamation and mine shutdown reserves 124,719 120,957
Other liabilities and deferred credits 160,708 179,887
Deferred income taxes 244,122 201,553
Deferred gain on sale of subsidiary
interests - 32,649
Minority interests in consolidated
subsidiaries 1,497,289 1,199,269
Stockholders' equity (deficit) (188,722) 649
---------- ----------
Total liabilities and stockholders' equity $4,138,357 $3,714,067
========== ==========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------------
1994 1993 1994 1993
-------- -------- ---------- ----------
(In Thousands, Except Per Share Amounts)
Revenues $503,187 $402,353 $1,421,179 $1,124,992
Cost of sales:
Production and
delivery 333,648 272,368 943,732 829,239
Depreciation and
amortization 28,257 43,110 92,050 141,203
-------- -------- ---------- ----------
Total cost of sales 361,905 315,478 1,035,782 970,442
Exploration expenses 9,901 19,672 35,389 47,990
Provision for
restructuring
charges - - - 67,145
(Gain) loss on
valuation and sale
of assets, net - (70,191) - 14,859
General and adminis-
trative expenses 43,092 36,059 123,893 127,176
-------- -------- ---------- ----------
Total costs and
expenses 414,898 301,018 1,195,064 1,227,612
-------- -------- ---------- ----------
Operating income
(loss) 88,289 101,335 226,115 (102,620)
Interest expense, net (21,732) (22,034) (67,626) (53,237)
Gain (loss) on
conversion/
distribution of FCX
securities 25,751 (2,861) 95,723 30,435
Other income
(expense), net (82) - (2,685) 1,083
-------- -------- ---------- ----------
Income (loss) before
income taxes and
minority interests 92,226 76,440 251,527 (124,339)
Provision for income
taxes (34,389) (33,784) (98,548) (1,906)
Minority interests in
net (income) loss
of consolidated
subsidiaries (46,385) (10,282) (104,257) 57,805
-------- -------- ---------- ----------
Income (loss) before
extraordinary item
and changes in
accounting
principle 11,452 32,374 48,722 (68,440)
Extraordinary loss on
early
extinguishment
of debt, net - - (9,108) -
Cumulative effect of
changes in accounting
principle, net - - - (20,717)
-------- -------- ---------- ----------
Net income (loss) 11,452 32,374 39,614 (89,157)
Preferred dividends (5,408) (5,588) (16,563) (16,782)
-------- -------- ---------- ----------
Net income (loss)
applicable to
common stock $ 6,044 $ 26,786 $ 23,051 $ (105,939)
======== ======== ========== ==========
Primary and fully
diluted net income
(loss) per share:
Before
extraordinary
item and changes
in accounting
principle $.04 $.19 $.23 $(.60)
Extraordinary loss
on early extin-
guishment of debt - - (.06) -
Cumulative effect
of changes in
accounting
principle - - - (.15)
---- ---- ---- -----
$.04 $.19 $.17 $(.75)
==== ==== ==== =====
Average primary and
fully diluted
common and common
equivalent shares
outstanding 138,202 142,265 139,538 142,076
======= ======= ======= =======
Dividends per
common share:
Cash $ - $.3125 $ .3125 $.9375
Property .2633 - 1.0188 -
------ ------ ------- ------
$.2633 $.3125 $1.3313 $.9375
====== ====== ======= ======
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOW (Unaudited)
Nine Months Ended
September 30,
----------------------
1994 1993
-------- --------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 39,614 $(89,157)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of changes in
accounting principle - 20,717
Extraordinary loss on early extinguishment
of debt 9,108 -
Depreciation and amortization 94,059 147,592
Provision for restructuring charges,
net of payments - 23,980
Other noncash charges to earnings - 33,194
Loss on valuation and sale of assets, net - 14,859
Oil and gas exploration expenses 5,219 19,699
Amortization of debt discount and
financing costs 25,300 31,159
Gain on conversion/distribution of FCX
securities (95,723) (30,435)
Deferred income taxes 63,459 (26,658)
Minority interests' share of net
income (loss) 104,257 (57,805)
Cash distribution from IMC-Agrico in
excess of capital interest 33,801 -
Reclamation and mine shutdown expenditures (6,968) (8,283)
(Increase) decrease in working capital,
net of effect of acquisitions and dispositions:
Accounts receivable 6,901 30,560
Inventories (18,623) (1,139)
Prepaid expenses and other 9,262 (12,730)
Accounts payable and accrued liabilities 15,858 (82,708)
Other (11,569) (1,995)
-------- --------
Net cash provided by operating activities 273,955 10,850
-------- --------
Cash flow from investing activities:
Capital expenditures:
PT-FI (481,840) (308,768)
RTM (45,857) (1,950)
Main Pass (7,388) (36,872)
Agricultural minerals (14,387) (16,107)
Oil and gas (12,875) (31,318)
Other (15,037) (21,644)
Acquisition of RTM, net of cash acquired (5,756) (1,354)
Proceeds from asset sales 110,502 136,983
Other - (358)
-------- --------
Net cash used in investing activities (472,638) (281,388)
-------- --------
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOW (Unaudited)
(Continued)
Cash flow from financing activities:
Proceeds from issuance of:
FCX Preferred Stock $252,985 $561,090
FCX 9 3/4% Senior Notes 116,276 -
FRP 8 3/4% Senior Subordinated Notes 146,125 -
Purchase of FTX and FCX common shares (82,367) (18,019)
Distributions paid to minority interests:
FCX (80,257) (50,579)
FRP (90,888) (90,884)
Proceeds from (repayments of) debt, net 145,578 (312,878)
Purchase of 10 7/8% Senior Debentures (142,919) -
Transfer to MOXY (35,441) -
Proceeds from infrastructure financing, net 17,319 -
FTX cash dividends paid:
Common stock (44,242) (132,190)
Preferred stock (16,641) (16,796)
Other 2,164 2,336
-------- --------
Net cash provided by (used in) financing
activities 187,692 (57,920)
-------- --------
Net decrease in cash and short-term
investments (10,991) (328,458)
Cash and short-term investments at beginning
of year 39,785 381,002
-------- --------
Cash and short-term investments at end of
period $ 28,794 $ 52,544
======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
1. DISTRIBUTION OF FCX INVESTMENT
In May 1994, Freeport-McMoRan Inc. (FTX) announced that it intends to pursue a
plan to separate its two principal businesses, copper/gold and agricultural
minerals, into two independent financial and operating entities. To
accomplish this plan, FTX would make a pro rata distribution of its common
stock ownership in Freeport-McMoRan Copper & Gold Inc. (FCX) to the FTX
stockholders. As a result of this distribution, which will require a series
of steps to implement, FTX would no longer own any interest in FCX. The
spinoff of FCX will provide greater access to credit markets and reduce
financing costs for both FCX and Freeport-McMoRan Resource Partners, Limited
Partnership (FRP). The proposed distribution, which is expected to take
several months to implement, is contingent on a number of factors including
(1) assurance that the distribution of FCX shares to FTX stockholders will be
tax-free, (2) completion of a restructuring of the liabilities of FTX
including its long-term debt, which may include the use of a portion of the
FCX shares currently owned by FTX, and (3) changing the voting rights of FCX
stockholders so that the Class B stockholders elect 80 percent of the FCX
directors and the Class A stockholders and preferred stockholders elect the
balance. The change in voting rights is subject to FCX Class A stockholder
approval. There can be no assurances that these contingencies will be met.
In June and September 1994, pursuant to the plan to distribute FTX's
investment in FCX, FTX distributed one FCX common share for each 80 FTX common
shares owned in lieu of paying a $.3125 quarterly cash dividend to its
stockholders. FTX recorded gains of $32.6 million ($21.2 million to net
income or $.15 per share) in the third quarter of 1994 and $70.9 million
($46.1 million to net income or $.33 per share) in the nine-month period of
1994 related to these property dividends. Subsequent to the FTX
restructuring, the FTX Board of Directors will determine a dividend policy.
2. McMoRan OIL & GAS CO.
In May 1994, FTX's Board of Directors declared a special distribution of one
common share of its newly formed, wholly owned subsidiary, McMoRan Oil & Gas
Co. (MOXY) for each ten shares of FTX common stock owned. MOXY was organized
for the purpose of carrying on substantially all of the oil and natural gas
exploration activities previously conducted by FTX. The net assets
transferred to MOXY at FTX's historical cost were as follows (in thousands):
Cash and short-term investments $35,441
Property, plant and equipment, net 13,052
Current liabilities (1,138)
-------
$47,355
=======
3. FCX REDEEMABLE PREFERRED STOCK OFFERINGS
In January 1994, FCX sold publicly 4.3 million depositary shares representing
215,279 shares of its Gold-Denominated Preferred Stock, Series II. 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. Additionally, in July
1994, FCX sold publicly 4.8 million depositary shares representing 119,000
shares of its Silver-Denominated Preferred Stock. Each depositary share has a
cumulative quarterly cash dividend equal to the value of 0.04125 ounces of
silver. Annually, beginning on August 1, 1999, FCX will redeem the underlying
Silver-Denominated Preferred Stock in eight equal installments. The net
proceeds from these offerings ($253.0 million) were loaned to P.T. Freeport
Indonesia Company (PT-FI) for general corporate purposes, including the
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
expansion of its mining and milling operations.
The Gold-Denominated Preferred Stock, Series II; the Gold-Denominated
Preferred Stock sold in August 1993; and the Silver-Denominated Preferred
Stock are being reflected as a hedge of future gold and silver sales for
accounting purposes. Based on closing commodity market prices, these shares
had an aggregate market value of $513.9 million as of September 30, 1994.
4. SUBORDINATED DEBENTURE REDEMPTION
In December 1993, FCX called its Zero Coupon Exchangeable Notes (the Notes)
for redemption in January 1994. During January 1994, Notes with a face amount
of $386.0 million were exchanged into 5.8 million shares of FCX Class A common
stock and the remaining Notes were redeemed for $.3 million in cash. As a
result of the issuance by FCX of its Class A common stock, PT-FI issued 14,490
shares of its stock to FCX, bringing FCX's direct ownership in PT-FI to 81.3
percent at September 30, 1994.
During 1994, FTX purchased or defeased $125.3 million of its 10 7/8%
Senior Subordinated Debentures resulting in a $9.1 million after-tax
extraordinary loss.
5. DEBT OFFERINGS
In February 1994, FRP sold publicly $150 million of 8 3/4% Senior Subordinated
Notes due 2004. Net proceeds were used to reduce other indebtedness.
In April 1994, a wholly owned subsidiary of FCX sold publicly $120
million of 9 3/4% Senior Notes due 2001. The net proceeds were loaned to a
joint venture in which PT-FI owns a minority interest. The joint venture was
formed to purchase and manage certain infrastructure assets from PT-FI to be
used in support of PT-FI's operations. The management agreement results in
the joint venture being reported as a consolidated entity.
6. INTEREST COSTS
Interest expense excludes capitalized interest of $14.1 million and $10.2
million in the third quarter of 1994 and 1993, respectively, and $35.8 million
and $48.2 million in the first nine months of 1994 and 1993, respectively.
FTX and its subsidiaries have at times entered into interest rate
exchange agreements to manage exposure to interest rate changes on a portion
of their floating-rate bank debt. FTX has an 8.2 percent interest rate
exchange agreement entered into in 1986 on $150.0 million of financing until
April 1996, and FTX and FRP have 10.2 percent interest rate exchange
agreements entered into in late 1987 and early 1988 on $69.2 million of
financing at September 30, 1994, reducing $8.4 million annually through 1999.
PT-FI also has an 8.3 percent interest rate exchange agreement entered into in
1991 on $78.6 million of financing at September 30, 1994, reducing $14.3
million annually through 1999. Under these interest swaps, FTX and its
subsidiaries received an average interest rate of 4.1 percent and 3.4 percent
during the first nine months of 1994 and 1993, respectively, based on the
London Interbank Offering Rate (LIBOR), resulting in an additional interest
cost of $3.0 million and $4.3 million in the third quarter of 1994 and 1993,
respectively, and $10.7 million and $13.2 million in the first nine months of
1994 and 1993, respectively. Based on market conditions at September 30,
1994, unwinding these interest swaps would require an estimated $13.3 million.
7. IMC-AGRICO CREDIT FACILITY
In February 1994, the IMC-Agrico Company joint venture (IMC-Agrico), in which
FRP currently owns 45.1 percent of the assets and liabilities, entered into a
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
three-year $75 million floating-rate credit facility (the IMC-Agrico
Facility). Borrowings under the IMC-Agrico Facility are unsecured with a
negative pledge on substantially all of IMC-Agrico's assets. The IMC-Agrico
Facility has minimum capital, fixed charge, and current ratio requirements for
IMC-Agrico; places limitations on indebtedness of IMC-Agrico; and restricts
the ability of IMC-Agrico to make cash distributions in excess of
distributable cash generated. At September 30, 1994, IMC-Agrico had no
borrowings under the IMC-Agrico Facility.
8. RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the first nine months of 1994 was
1.7 to 1 compared with a shortfall of $203.2 million for the 1993 period. For
this calculation, earnings are income from continuing operations before income
taxes, minority interests, and fixed charges. Fixed charges are interest,
that portion of rent deemed representative of interest, and the preferred
stock dividend requirements of majority-owned subsidiaries.
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
------------------
Remarks
The information furnished herein should be read in conjunction with FTX's
financial statements contained in its 1993 Annual Report to stockholders and
incorporated by reference in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
periods. All such adjustments are, in the opinion of management, of a normal
recurring nature.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
Third Quarter Nine Months
------------------- -----------------------
1994 1993 1994 1993 a
------ ------ -------- --------
(In Millions, Except Per Share Amounts)
Revenues $503.2 $402.4 $1,421.2 $1,125.0
Operating income
(loss) 88.3 101.3 b 226.1 (102.6)c
Net income (loss)
applicable to
common stock 6.0 d 26.8 b 23.1 d,e (105.9)c,d,f
Net income (loss)
per share .04 d .19 b .17 d,e (.75)c,d,f
a. Excludes Rio Tinto Minera, S.A. (RTM) results prior to its March 1993
acquisition.
b. 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.
c. Includes the gain in Note b and a $213.0 million charge ($93.1 million to
net income or $.65 per share) for administrative restructuring costs, the
recoverability of certain assets, and certain other charges.
d. Includes gains to net income of $16.7 million ($.12 per share)for the
third quarter of 1994, and $62.2 million ($.45 per share) and $20.1
million ($.14 per share) for the nine-month periods of 1994 and 1993,
respectively, related to the distribution/conversion of Freeport-McMoRan
Copper & Gold Inc. (FCX) securities (Notes 1 and 4).
e. Includes an extraordinary charge of $9.1 million ($.06 per share) related
to early extinguishment of debt (Note 4).
f. Includes a $20.7 million charge to net income ($.15 per share) for the
cumulative effect of changes in accounting principle.
Freeport-McMoRan Inc. (FTX) operating results reflect higher earnings
from its metals and agricultural minerals segments primarily due to increased
sales volumes and price realizations for its commodities.
Third-quarter 1994 depreciation and amortization was lower than in the
year-ago period primarily due to the adjustment to the earnings of Freeport-
McMoRan Resource Partners, Limited Partnership (FRP) caused by its
disproportionate interest in current cash distributions from the IMC-Agrico
Company joint venture (IMC-Agrico) and from lower oil sales volumes. The
nine-month 1993 period reflects charges totaling $18.7 million related to the
1993 restructuring project.
Exploration expenses for 1994 declined due to the absence of oil and gas
exploration subsequent to the formation of McMoRan Oil & Gas Co. (MOXY) in May
1994 (Note 2), partially offset by increases at FTX's metals segment.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Third-quarter 1994 general and administrative expenses were higher than
in the prior year quarter due to the additional personnel and administrative
effort required to manage operations for the expanding metals segment. The
nine month period of 1994 reflects the increased metals segment general and
administrative expenses, partially offset by reductions caused by the benefits
from the July 1, 1993 formation of IMC-Agrico and other restructuring
activities undertaken in 1993. The nine-month 1993 period includes $15.8
million in charges resulting from this restructuring project.
Interest expense increased for the nine month period of 1994 primarily
due to higher average interest rates and the Main Pass sulphur project
becoming operational for accounting purposes in July 1993; previously, related
interest costs were capitalized (Note 6).
The increase in minority interests' share of net income in the third
quarter of 1994 over the comparable 1993 period is primarily because the 1993
period includes a $69.1 million gain on the sale of an oil and gas property by
FTX and FTX's recognition of an additional minority interest charge of $10.9
million in 1994 due to not receiving its proportionate share of FRP
distributions. Prior to the third quarter of 1994, FTX was able to reflect
its proportionate share of FRP's earnings through recognition of $4.6 million
and $15.5 million for the third quarter of 1994 and 1993, respectively, and
$32.6 million and $46.6 million for the nine-month periods of 1994 and 1993,
respectively, of the gain deferred by FTX in connection with the February 1992
public sale of FRP units. However, during the current quarter the remaining
deferred gain was recognized. In future periods, FTX's share of the reported
financial results of FRP will depend on the extent to which FTX receives its
proportionate share of FRP distributions. To the extent that public
unitholders receive a disproportionately large share of FRP distributions, as
has been the case since early 1992 resulting from the public's perferential
right to receive distributions through 1996, FTX will recognize a smaller
share of FRP's reported earnings than would be represented by its percentage
ownership of FRP.
Metals Operations
- -----------------
FTX's metals operations are conducted through its affiliate FCX and FCX's
primary operating units P.T. Freeport Indonesia Company (PT-FI) and RTM.
Third-quarter 1994 metals operating income was $63.4 million on revenues of
$313.4 million compared with $59.0 million on revenues of $261.5 million for
the 1993 period. For the nine months ended September 30, 1994, FCX generated
operating income of $169.4 million on revenues of $861.0 million compared with
$65.9 million on revenues of $610.1 million for the year-ago period.
Significant items impacting operating income are as follows (in millions):
Third Nine
Quarter Months
------- ------
Metals operating income - 1993 $59.0 $ 65.9
----- ------
Increases (decreases):
Price realization:
Copper 25.4 54.3
Gold 1.6 15.1
Sales volumes:
Copper 3.4 45.7
Gold 8.0 49.7
Treatment charges (1.5) (12.8)
Adjustments to prior period
concentrate sales 3.0 10.3
Other (4.4) (3.4)
RTM revenues, net of eliminations 16.4 92.0 a
----- ------
Revenue variance 51.9 250.9
Cost of sales (35.5) (143.5)b
Exploration expenses (0.6) (4.5)
1993 provision for restructuring charges - 20.8
General and administrative expenses (11.4) (20.2)b
----- ------
4.4 103.5
----- ------
Metals operating income - 1994 $63.4 $169.4
===== ======
a. The 1993 period includes only six months of RTM revenues.
b. The nine-month 1993 period included $10.0 million in cost of sales and
$6.3 million in general and administrative expenses resulting from the
restructuring project.
Contributing to higher revenues were significantly higher copper prices
and improved gold realizations. Additionally, copper and gold sales volumes
increased due to higher production resulting from expanded mill throughput,
partially offset by lower grades and recoveries when compared to 1993 levels.
Although lower than the unusually high levels of the third quarter of 1993,
third-quarter 1994 copper and gold grades were significantly higher than in
the prior quarter. Copper grades are expected to be higher in the fourth
quarter of 1994. Recovery rates for copper and gold vary depending on quality
of the ore mined. Treatment charges increased primarily due to higher copper
volumes and prices, as certain charges vary with the price of copper.
Treatment charges, which are negotiated annually with our customers, are
expected to decline significantly on a per pound basis in 1995 as a result of
the overall tightness in the copper concentrates market currently being
experienced. Adjustments to prior period concentrate sales for the current
quarter and nine-month period resulted in positive adjustments primarily
caused by favorable copper pricing adjustments, compared to the 1993 periods
when falling copper prices resulted in negative adjustments.
PT-FI OPERATIONS Third Quarter Nine Months
------------------ ------------------
1994 1993 1994 1993
------- ------- ------- -------
Ore milled (metric tons per
day, MTPD) 69,900 59,700 71,500 59,200
Copper grade (%) 1.56 1.68 1.44 1.53
Gold grade (grams per MT) 1.37 1.51 1.28 1.21
Recovery rate (%)
Copper 83.5 87.9 83.6 87.2
Gold 73.5 75.9 72.0 75.5
Copper (000s of recoverable pounds)
Production 178,300 172,400 499,800 456,500
Sales 169,400 165,600 493,900 443,700
Average realized price a $1.05 $.90 $1.02 $.91
Gold (recoverable ounces)
Production 200,700 194,900 557,200 458,600
Sales 194,200 172,900 580,900 440,400
Average realized price $381.89 $373.72 $380.21 $354.15
Gross profit per pound of copper (cents):
Average realized price a 105.0 90.0 101.8 90.8
----- ---- ----- ----
Production costs:
Site production and delivery 54.9 44.6 58.5 49.2
Gold and silver credits (44.6) (40.6) (45.2) (35.7)
Treatment charges 24.2 23.9 23.9 23.7
Royalty on metals 3.4 1.3 2.3 1.6
----- ---- ----- ----
Cash production costs 37.9 29.2 39.5 38.8
Depreciation and
amortization 8.0 8.7 8.1 8.7
----- ---- ----- ----
Total production costs 45.9 37.9 47.6 47.5
----- ---- ----- ----
Revenue adjustments b (0.3) (2.2) (0.5) (3.2)
----- ---- ----- ----
Gross profit per pound 58.8 49.9 53.7 40.1
===== ==== ===== ====
a. Excluding amounts recognized under PT-FI's copper price protection
program, realizations would have been $1.13 and $.80 for the third
quarter of 1994 and 1993, respectively, and $1.04 and $.85 for the nine-
month periods of 1994 and 1993, respectively.
b. Reflects adjustments for prior period concentrate sales and amortization
of the cost of the price protection program.
PT-FI's third-quarter mill throughput rate rose 17 percent compared with
the 1993 period. Expansion activities continue toward a level of 115,000 MTPD
to be reached during the second half of 1995. Mill throughput rates are
expected to approximate third quarter levels for the near term, even though
significant construction tie-in work is being performed. PT-FI site
production and delivery costs totaled $93.0 million for the third quarter of
1994 compared with $73.8 million for the 1993 period. Unit costs increased
10.3 cents per pound due to lower grades and recoveries, higher jobsite
administrative expenses, expansion related activities, and costs associated
with initial privatization efforts. Unit site production and delivery costs
are expected to fluctuate significantly in the quarters prior to completion of
PT-FI's 115,000 MTPD expansion program because of anticipated variations in
ore grade. Based on present expectations, PT-FI anticipates mining lower
grade ore during the first half of 1995 which is estimated to have a
relatively negative impact on its operating results. Operating results for
PT-FI are expected to improve during the second half of 1995 when improved ore
grades are projected and output volumes increase as the expansion is
completed. Third-quarter 1994 per pound gold and silver credits increased 10
percent over the 1993 period primarily because of higher gold sales.
As a result of 1993 reserve additions, PT-FI's 1994 depreciation rate
decreased to 7.5 cents per pound compared with 8.3 cents for 1993.
PT-FI has commitments from various parties to purchase virtually all of
its estimated 1994 and 1995 production at market prices. The price that PT-FI
ultimately receives for its concentrate is subject to the volatility of the
commodity markets.
In order to establish a minimum realization for its copper sales during
the expansion period and to manage the impact of possible unfavorable changes
in copper prices, PT-FI has entered into various hedging contracts. During
1993 and for the first half of 1994, these contracts established a minimum
realization of $.90 per pound. PT-FI entered into forward contracts covering
substantially all of its remaining 1994 copper sales resulting in an expected
realization of $1.04 for the fourth quarter of 1994. Included in the fourth
quarter expected realization is $27.3 million of cash already received from
the settlement of related contracts originally designed to hedge fourth
quarter sales. Net reductions to revenues under these programs totaled $15.5
million ($8.7 million to net income) in the third quarter of 1994 and $15.3
million ($8.6 million to net income) for the nine-month period of 1994. The
comparable 1993 periods included net revenues of $15.3 million ($8.4 million
to net income) and $27.3 million ($15.1 million to net income), respectively,
recognized under the $.90 per pound program.
PT-FI also implemented a price protection program, at a cost of $21.7
million, to cover anticipated copper sales for 1995. For the first half of
1995, PT-FI's program established a minimum average selling price of $.875 per
pound, with full participation in any price increase above an average of
approximately $.97 per pound. For the second half of 1995, PT-FI's program
established a minimum average price of $.83 per pound, while allowing full
benefit from prices above that amount. As of September 30, 1994, unwinding
PT-FI's hedging position would require approximately $80 million. As
conditions warrant, PT-FI may modify or extend its existing program.
RTM OPERATIONS Third Quarter Nine Months
------------------ -----------------
1994 1993 1994 1993 a
------- ------- ------- -------
Smelter operations:
Concentrate treated (MT) 120,200 109,200 364,600 224,500
Anode production (000s of
pounds) 86,400 97,000 261,900 199,600
Cathode production (000s of
pounds) 79,200 77,400 233,300 153,700
Gold operations:
Ore milled (MTPD) 18,800 18,000 18,500 18,100
Gold grade (grams per MT) 1.05 1.07 1.04 1.04
Sales (recoverable ounces) 45,900 43,700 126,600 88,200
Average realized price b $368.62 $340.35 $364.06 $335.90
a. RTM results are from March 30, 1993, the date of its acquisition.
b. Excluding hedging adjustments related to RTM's gold loans (9,200 ounces
payable quarterly) and forward sales contracts, realizations would have
been $380.17 and $373.06 for the third quarter of 1994 and 1993,
respectively, and $377.74 and $365.16 for the nine-month periods of 1994
and 1993, respectively.
For the third-quarter of 1994, RTM losses totaled $2.7 million while its
operations were at breakeven for the nine-month 1994 period, compared with
losses of $1.0 million for the third quarter of 1993 and $5.4 million for the
period from acquisition to September 30, 1993. RTM has a hedging program for
its gold sales that includes gold-denominated loans and forward contracts.
Net reductions to revenues recognized under the gold hedging program totaled
$.5 million and $1.4 million for the third quarter periods of 1994 and 1993,
respectively, and $1.7 million and $2.6 million for the nine-month periods of
1994 and 1993, respectively. As of September 30, 1994, the unrecognized
balance of the gold-denominated loans totaled $5.1 million.
Higher operating rates at RTM's smelter resulted in increased concentrate
treated during the 1994 quarter compared with the 1993 period. Cathode
refinery operations also continued to maintain high operating rates. Higher
third-quarter 1994 mill throughput and recoveries at RTM's gold operations,
partially offset by lower grades, resulted in an increase in gold sales.
Third-quarter 1994 RTM earnings were negatively impacted by a continuing
decline in the value of the U.S. dollar and planned mining of lower grade ore
at RTM's gossan mining operations. Based on current operating levels, a one
peseta change in the exchange rate has an approximately $1 million impact on
RTM's annual earnings and cash flow. RTM's 1995 results are expected to be
negatively impacted by the significant decline in treatment charge rates
discussed above and are subject to variations based on the relative value of
the U.S. dollar and the Spanish peseta.
METALS EXPLORATION
PT-FI continues its exploration activities within its original 24,700 acre
Contract Of Work (COW) area (Block A), the adjacent 6.5 million acre COW area
(Block B) and a 2.5 million acre area (Eastern Mining blocks). Delineation
and exploratory drilling continues at the Big Gossan and Lembah Tembaga
prospects, both within Block A. Development of the Big Gossan deposit is
expected to begin by early 1995 at a total estimated cost of approximately
$130 million. Exploration activities continue in other locations including
the Wanagon prospect within Block A and the Wabu gold prospect in Block B.
Exploratory drilling with three rigs is also continuing at Etna Bay located
within the Eastern Mining acreage. PT-FI must progressively relinquish its
rights to the COW area in amounts equal to 25 percent of the Block B acreage
at the end of each of three specified periods, the first of which is scheduled
to expire on December 30, 1994, and the last of which is set to expire in the
next two to four years. Similarly, 75 percent of the Eastern Mining blocks
must be relinquished over the next two to seven years. Exploration costs,
currently budgeted at $42 million for 1994, including $4 million for RTM,
totaled $29.5 million in the nine-month 1994 period compared with $25.0
million in the 1993 period.
Agricultural Minerals Operations
- --------------------------------
FTX's agricultural minerals segment, which includes FRP's fertilizer and
phosphate rock operations (conducted through its interest in IMC-Agrico) and
its sulphur business, reported third-quarter 1994 operating income of $33.4
million on revenues of $182.2 million compared with a loss of $12.2 million on
revenues of $121.7 million for the 1993 period. Operating income for the
first nine months of 1994 was $84.8 million on revenues of $531.2 million
compared with a loss of $110.2 million on revenues of $464.2 million for the
year-ago period. Significant items impacting operating income are as follows
(in millions):
Third Nine
Quarter Months
------- -------
Agricultural minerals operating income - 1993 $(12.2) $(110.2)
------ -------
Increases (decreases):
Sales volumes 30.4 12.1
Realizations 34.2 58.5
Other (4.1) (3.6)
------ -------
Revenue variance 60.5 67.0
Cost of sales (16.3) 48.6*
1993 provision for restructuring charges - 33.9
1993 loss on valuation and sale of assets, net (1.1) 25.5
General and administrative and other 2.5 20.0*
------ -------
45.6 195.0
------ -------
Agricultural minerals operating income - 1994 $ 33.4 $ 84.8
====== =======
* The nine-month 1993 period included $17.5 million in cost of sales and
$7.3 million in general and administrative expenses resulting from the
restructuring project.
FRP's proportionate share of the IMC-Agrico third-quarter 1994 sales
volumes for diammonium phosphate (DAP), its principal fertilizer product,
increased 39 percent when compared to the year-ago quarter (16 percent above
the second quarter of 1994). Industrywide sales activity benefited from
continued strong export demand, particularly by China, and improved domestic
activity. This demand caused a reduction in producer inventories, despite a
rise in industrywide production, resulting in a continued firming in phosphate
fertilizer prices. FRP's current quarter phosphate fertilizer realizations
rose 42 percent from the near-20 year lows experienced during the year-ago
quarter. Unit production costs benefited from production efficiencies at IMC-
Agrico, offset by higher ammonia and sulphur prices. Ammonia prices in the
U.S. Gulf are presently $225 per short ton, up approximately $115 per short
ton from a year ago. IMC-Agrico's ammonia costs have not risen as sharply due
to contractual arrangements and ammonia production at its Faustina, Louisiana
plant.
Strong export demand for phosphate fertilizer products is expected to
continue into 1995 with heavy demand from China. The domestic market producer
sales are expected to be at normal levels. Reduced domestic acreage planted,
due to record crop production causing increased government set-asides, is
expected to be offset by improved fertilizer application rates and higher
dealer purchases.
FRP's proportionate share of the IMC-Agrico third-quarter and nine-month
1994 phosphate rock sales volumes increased 3 percent and 13 percent,
respectively, from the 1993 periods reflecting the increased demand caused by
improved industrywide phosphate fertilizer operations.
Sulphur production for the 1994 periods increased over the 1993 period
levels with Main Pass operations averaging nearly 6,600 tons per day (TPD)
during the current quarter (exceeding full design operating rates of 5,500 TPD
or approximately 2 million tons per year), helping to lower unit production
costs. Production is expected to be maintained near the 6,000 TPD level for
the immediate future. Due to the increased Main Pass production, FRP ceased
operating the marginally profitable Caminada mine in January 1994, with no
material impact on earnings. Sulphur realizations for the 1994 periods were
lower, reflecting the decline in prices which occurred throughout 1993.
Improved phosphate fertilizer operating rates, coupled with reduced imports
from Canada, have resulted in current Tampa market price increases since mid-
1994 in the range of $10 to $12 per ton, with Tampa sulphur prices currently
above year-ago levels. To the extent U.S. phosphate fertilizer production
remains strong, sulphur demand is expected to continue to improve, although
the availability of Canadian sulphur limits the potential for significant
improvement in prices.
Third Quarter Nine Months
---------------------- ---------------------
1994 1993 1994 1993
--------- --------- --------- ---------
Phosphate fertilizers (short tons)a
Diammonium phosphate
Sales:
Florida 258,600 220,900 753,100
Louisiana 277,000 177,600 733,400
Other 64,500 31,800 165,900
--------- --------- ---------
Total sales 600,100 430,300 1,652,400 1,769,600
Average realized price:b
Florida $148.71 $100.94 $143.29
Louisiana 154.23 112.03 150.12
Monoammonium phosphate
Sales:
Granular 81,400 58,700 242,000 369,500
Powdered 34,900 22,300 118,100 22,300
Average realized price:b
Granular $158.21 $115.34 $157.20
Powdered 132.12 93.95 126.21
Granular triple superphosphate
Sales 123,700 89,700 356,400 430,300
Average realized priceb $115.96 $86.59 $113.05
Phosphate rock (short tons)a
Sales 1,062,500 1,026,700 3,073,100 2,708,900
Average realized priceb $19.91 $20.20 $21.59
Sulphur (long tons)
Salesc 562,900 418,900 1,586,500 1,446,500
a. Certain information prior to the formation of IMC-Agrico was not
recorded on a basis consistent with that currently being presented and
therefore is not available. Reflects FRP's 46.5 percent share of the
IMC-Agrico assets for the year ended June 30, 1994, while FRP received
58.6 percent of the cash flow generated during such period. FRP's share
of the IMC-Agrico assets for the year ended June 30, 1995 is 45.1
percent, while it will receive 55.0 percent of the cash flow.
b. Represents average realization f.o.b. plant/mine.
c. Includes 189,700 tons and 149,600 tons for the third quarter of 1994 and
1993, respectively, and 564,500 tons and 929,000 tons for the nine-month
periods of 1994 and 1993, respectively, which represent internal
consumption and Main Pass start-up sales that are not included in sales
for accounting purposes.
Oil And Gas Operations
- ----------------------
Prior to the distribution of MOXY shares to FTX shareholders (Note 2), FTX's
oil and gas operations (excluding the Main Pass oil operation) involved
exploring for new reserves. These activities generated losses of $.7 million
and $11.7 million for the third-quarter and nine-month period of 1994,
respectively, compared with losses of $8.7 million and $39.8 million for the
1993 periods, respectively. During the third quarter of 1993, FTX sold its
undeveloped East Cameron Blocks 331/332 oil and gas property for $95.3
million, recognizing a pretax gain of $69.1 million.
Main Pass's oil operations achieved the following:
Third Quarter Nine Months
------------------ ------------------------
1994 1993 1994 1993
------- --------- --------- ---------
Sales (barrels) 417,900 1,066,100 1,853,000 2,425,300
Average realized price $14.94 $14.25 $13.34 $15.15
Operating income (in
millions) $.2 $.8 $2.2 $.0
Third-quarter 1994 oil production for the Main Pass joint venture (in
which FRP owns a 58.3 percent interest) was hampered by the longer-than-
expected drilling of additional wells. As a result, FRP's 1994 net production
is currently expected to be 2.5 million barrels. FRP's 1995 net production is
currently estimated to approximate 1994 production. Oil realizations continue
to reflect the significant price declines which occurred in late 1993;
although prices have improved during 1994.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operating activities increased to $274.0 million during the
first nine months of 1994 from $10.9 million for the 1993 period, primarily
due to higher income from operations and changes in working capital. PT-FI
has agreed upon the framework of a settlement with its insurers for a property
and business interruption claim for the June 1993 ore pass cave-in. PT-FI
anticipates receiving insurance proceeds in excess of $30 million late this
year or early 1995. Net cash used in investing activities was $472.6 million
compared with $281.4 million for the 1993 period. Increased capital
expenditures associated with the PT-FI and RTM expansions were partially
offset by lower Main Pass and oil and gas expenditures and the early receipt
of proceeds from the geothermal notes receivable (reflected in long-term
receivables). Net cash provided by financing activities was $187.7 million,
whereas the 1993 period resulted in a use of $57.9 million. The 1994 period
includes proceeds totaling $515.4 million from the public sales of FCX and FRP
securities (Notes 3 and 5) compared with $561.1 million in proceeds from FCX
preferred stock offerings during the 1993 period. Distributions to FCX
minority interests increased during 1994 as a result of increased FCX public
common and preferred stock outstanding (Notes 1 and 3). The 1994 period
financing activities include a net increase in borrowings of $2.7 million,
including the 10 7/8% Senior Debenture purchase (Note 4), compared with a
$312.9 million net repayment during 1993. Cash dividends on FTX common stock
were lower, reflecting the distribution of FCX common shares in lieu of
quarterly cash dividends (Note 1).
Through 1995, PT-FI's capital expenditures are expected to exceed cash
flow from its operations. Upon completion of the 115,000 MTPD expansion
during the second half of 1995, PT-FI's annual production is expected to be
approximately 1.1 billion pounds of copper and 1.5 million ounces of gold.
Subsequently, capital expenditures will be determined by the results of
exploration activities and ongoing capital maintenance programs. Remaining
capital expenditures in 1994 and 1995 for the expansion to 115,000 MTPD, the
initial phase of the Enhanced Infrastructure Project (EIP), and ongoing
capital maintenance expenditures are expected to range from $450 million to
$550 million. These expenditures will be funded by operating cash flow, sales
of existing and to-be-constructed infrastructure assets and other financing
sources. These sources include, but are not limited to, the FTX/PT-FI/FRP
credit facility (which had availability of $275.0 million at October 21, 1994)
and public and private issuances of securities. PT-FI's long-lived, low-cost
reserve base provides it potential access to a broad range of sources of
capital.
The full EIP (currently expected to involve an aggregate cost of up to
$500 million to $600 million to be completed in stages) includes commercial,
residential, educational, retail, medical, recreational, environmental and
other infrastructure facilities to be constructed during the next 20 years for
PT-FI operations. The EIP is helping to develop and promote the growth of
local and other third-party activities and enterprises in Irian Jaya through
the creation of certain necessary support facilities. The initial phase of
the EIP is under construction and is scheduled for completion in 1996.
Additional expenditures for EIP assets beyond the initial phase depend on the
long-term growth of PT-FI's operations and would be expected to be funded by
third-party financing sources, which may include debt, equity or asset sales.
As discussed below, certain portions of the EIP and other existing
infrastructure assets have been or are expected to be sold in the near future
to provide additional funds for the expansion to 115,000 MTPD.
PT-FI has 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 million. The first group of assets were sold to the
ALatieF Joint Venture in December 1993 for $90 million and the second group of
assets was sold in August 1994 for $77 million. Another sale of at least $40
million is scheduled for the fourth quarter of 1994 and the remainder in 1995.
FCX has guaranteed the $180 million of debt required to finance the sales to
the ALatieF Joint Venture (Note 5), which is reported as a consolidated
entity.
PT-FI has also entered into Letters of Intent to sell the following: (i)
existing and to-be-constructed power generation and transmission assets and
certain other power-related assets; (ii) certain aircraft, airport and related
operations; and (iii) certain construction equipment, port facilities and
related marine, logistics and related assets to other joint ventures. The
sales to these joint ventures are expected to generate approximately $330
million (net of PT-FI equity contributions), including approximately $200
million in the fourth quarter of 1994 and the remainder in 1995. These
Letters of Intent are not binding and are subject to the execution of
definitive agreements, financing, and certain approvals from the Indonesian
Government.
RTM's principal operations currently consist of a copper smelter with an
annual capacity of 150,000 metric tons of metal. In June 1994, RTM signed a
turnkey contract to expand its smelter to 270,000 metric tons of metal per
year by early 1996. The contract requires payments in both German deutsche
marks and Spanish pesetas, however RTM has hedging arrangements that fix the
cost of the expansion program at approximately $215 million. Project
financing of $290 million, which is nonrecourse to FCX, has been arranged and
is expected to be closed during the fourth quarter of 1994, which will also
provide funds for refinancing RTM's gold and silver loans and a portion of its
working capital loans. The financing arrangement requires an additional net
equity contribution of $30 million, which will be made by FCX. RTM's future
cash flow is dependent on a number of variables including fluctuations in the
exchange rate between the United States dollar and the Spanish peseta, future
prices and sales volumes of gold, the production rates at the smelter during
the expansion program and during anticipated major maintenance turnarounds,
and the supply/demand for smelter capacity and its impact on related treatment
and refining charges. PT-FI has a long-term contract with RTM to provide the
smelter with a significant portion of its copper concentrate requirements.
FCX recently announced that PT-FI and RTM have taken the lead role in
developing the proposed 150,000 to 200,000 metric tons of metal per year
copper smelter in Gresik, Indonesia. It is contemplated that PT-FI would
provide concentrate to the Gresik smelter. Management is currently reviewing
possible alternatives for financing the construction cost. The smelter could
be operational as early as 1998.
In late June 1994, a hole was found in the top of a phosphogypsum storage
area at the New Wales, Florida, facility of IMC-Agrico. After reviewing
seismic testing performed by an independent consultant, IMC-Agrico submitted
to the Florida Department of Environmental Protection a plan to plug the
sinkhole and is currently awaiting final approval. The joint venture has
accrued for costs to rectify this situation. While there is no evidence that
indicates underground water contamination in areas away from the New Wales
facility, this issue is being investigated by IMC-Agrico. If this were to be
the case, the costs that would be required are uncertain and cannot be
estimated at the present. If significant costs were incurred, which IMC-
Agrico considers unlikely, a determination would be necessary with respect to
the availability of insurance maintained by the joint venture and separately
by FRP and with respect to the appropriate sharing of costs pursuant to the
agreement between the joint venture partners as it relates to environmental
matters.
Publicly owned FRP units have cumulative rights to receive quarterly
distributions of 60 cents per unit through December 31, 1996 (the Preference
Period) before any distributions may be made to FTX. On October 21, 1994, FRP
declared a distribution of 60 cents per publicly held unit ($30.3 million),
payable November 15, 1994, bringing the total unpaid distribution to FTX to
$335.0 million. Unpaid distributions due FTX will be recoverable from part of
the excess of future quarterly FRP distributions over 60 cents per unit for
all units. The October 1994 distributable cash included $33.7 million from
IMC-Agrico. FRP's future distributions will be dependent on the distributions
received from IMC-Agrico, which will primarily be determined by prices and
sales volumes of its commodities and future cost reductions achieved by its
combined operations, and the future cash flow of FRP's sulphur and oil
operations.
In October 1994, FRP announced that it has agreed in principle to acquire
Fertiberia, S.L., the restructured nitrogen and phosphate fertilizer business
of Ercros, S.A., a Spanish conglomerate. For the past year, FRP has managed
this company with the goal of establishing Fertiberia as a financially viable
concern. FRP now intends to acquire all of the capital stock of Fertiberia
owned by Ercros and its affiliates, which is expected to be in excess of 90
percent of the total outstanding shares, in return for agreeing to make a
capital contribution of $11.5 million upon closing and a further contingent
payment of $10.0 million on January 1, 1998. The acquisition of Fertiberia,
one of the largest fertilizer manufacturers in Europe, is conditioned upon
satisfaction of a number of issues, including the removal of liens from its
assets, insulation from past pension liabilities, and restructuring of
Fertiberia's existing debt such that it will not represent a material burden
on Fertiberia's future performance. As part of the agreement, financing has
been arranged in the amount of $38.5 million to provide the company with
needed financial flexibility and security as it emerges as an independent
entity from the Ercros group of companies and their related past financial
problems. This financing is nonrecourse to FRP with payment terms depending
upon the financial performance of Fertiberia. The closing of the transaction
is expected to occur by year end.
In October 1994, FRP announced that it had entered into an agreement to
acquire essentially all of the domestic assets of Pennzoil Company's sulphur
division. Under the agreement, Pennzoil will receive quarterly installment
payments from FRP over 20 years which are based on the prevailing price of
sulphur from time to time. The installment payments may be terminated earlier
either by FRP, through the exercise of a call option for $65.0 million, or by
Pennzoil, through a put option providing for a $10.0 million payment to
Pennzoil. Neither the call option nor the put option may be exercised within
the first four years of the agreement. The transaction is subject to a number
of conditions including required government approvals.
FTX is primarily a holding company and its sources of cash flow are
dividends and distributions from its ownership in FCX and FRP. In the past,
including in 1993 and early 1994, the FTX Board of Directors has decided to
borrow funds when the cash received from FCX, FRP, and asset sales was
insufficient to pay dividends and cover FTX's other cash requirements for
interest, general and administrative expenses, and oil and gas operations.
During the second and third quarters of 1994, in lieu of paying a $.3125
quarterly cash dividend to its common stockholders, FTX distributed one share
of FCX Class A common stock for each 80 FTX common shares to stockholders of
record. Subsequent to the distribution of FCX shares to FTX stockholders under
the proposed restructuring plan (Note 1), the FTX Board of Directors will
determine a dividend policy.
------------------------
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
FREEPORT-McMoRan INC.
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
- -----------------------------------------
(a) The list of exhibits appearing on page E-1 hereof and the exhibit
immediately following said page are incorporated herein by reference.
(b) Reports on Form 8-K. No reports on Form 8-K have been filed during
the quarter for which this report is filed.
FREEPORT-McMoRan INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FREEPORT-McMoRan INC.
By: /s/ John T. Eads
-------------------------
John T. Eads
Controller - Financial Reporting
(authorized signatory and
Principal Accounting Officer)
Date: October 27, 1994
FREEPORT-McMoRan INC.
EXHIBIT INDEX
Sequentially
Numbered
Number Description Page
- ------ ----------- ------------
11.1 Freeport-McMoRan Inc. and Consolidated
Subsidiaries Computation of Net Income
per Common and Common Equivalent Share
27.1 Freeport-McMoRan Inc. and Consolidated
Subsidiaries Financial Data Schedule
EXHIBIT 11.1
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
1994 1993 1994 1993
------- ------- ------- ---------
(In Thousands, Except Per Share Amounts)
Primary:
Net income (loss)
applicable to
common stock $6,044 $26,786 $23,051 $(105,939)
====== ======= ======= =========
Average common
shares outstanding 137,837 141,171 138,921 141,072
Common stock
equivalents:
Stock options 365 1,094 617 1,004
------- ------- ------- -------
Common and common
equivalent shares 138,202 142,265 139,538 142,076
======= ======= ======= =======
Net income (loss)
per common and
common equivalent
share $.04 $.19 $.17 $(.75)
==== ==== ==== =====
Fully diluted:
Net income (loss)
applicable to common stock:
Net income (loss) $6,044 $26,786 $23,051 $(105,939)
Plus preferred
dividends - - - -
Plus interest, net
of tax effect, on
convertible
subordinated
debentures - - - -
------- -------- ------- ---------
Net income (loss)
applicable to
common stock $6,044 $26,786 $23,051 $(105,939)
====== ======= ======= =========
Average common
shares
outstanding 137,837 141,171 138,921 141,072
Common stock
equivalents:
Stock options 365 1,094 617 1,004
Convertible
securities:
Preferred stock - - - -
Convertible
subordinated
debentures - - - -
------- ------- ------- --------
Common and common
equivalent shares 138,202 142,265 139,538 142,076
======= ======= ======= =======
Net income (loss)
per common and
common equivalent
share $.04 $.19 $.17 $(.75)
==== ==== ==== =====
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 28,794
<SECURITIES> 0
<RECEIVABLES> 179,530
<ALLOWANCES> 0
<INVENTORY> 387,540
<CURRENT-ASSETS> 696,082
<PP&E> 4,748,383
<DEPRECIATION> 1,504,926
<TOTAL-ASSETS> 4,138,357
<CURRENT-LIABILITIES> 605,208
<BONDS> 1,437,129
<COMMON> 166,118
0
250,000
<OTHER-SE> (604,840)
<TOTAL-LIABILITY-AND-EQUITY> 4,138,357
<SALES> 1,421,179
<TOTAL-REVENUES> 1,421,179
<CGS> 1,035,782
<TOTAL-COSTS> 1,035,782
<OTHER-EXPENSES> 35,389
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67,626
<INCOME-PRETAX> 251,527
<INCOME-TAX> 98,548
<INCOME-CONTINUING> 48,722
<DISCONTINUED> 0
<EXTRAORDINARY> (9,108)
<CHANGES> 0
<NET-INCOME> 39,614
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
