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 June 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 June 30, 1994, there were issued and outstanding 137,661,182 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 9
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 10
Part II. Other Information 20
Signature 21
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)
June 30, December 31,
1994 1993
---------- ------------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 27,443 $ 39,785
Accounts receivable 245,155 268,762
Inventories 394,742 345,333
Prepaid expenses and other 26,846 25,675
---------- ----------
Total current assets 694,186 679,555
Property, plant and equipment, net 3,127,557 2,773,730
Long-term receivables 58,875 111,222
Other assets 154,407 149,560
---------- ----------
Total assets $4,035,025 $3,714,067
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 479,090 $ 408,289
Current portion of long-term debt and
short-term borrowings 67,371 49,256
---------- ----------
Total current liabilities 546,461 457,545
Long-term debt, less current portion 1,464,353 1,282,424
Accrued postretirement benefits and
pension costs 248,610 239,134
Reclamation and mine shutdown reserves 124,229 120,957
Other liabilities and deferred credits 184,436 179,887
Deferred income taxes 231,307 201,553
Deferred gain on sale of subsidiary
interests 4,572 32,649
Minority interests in consolidated
subsidiaries 1,386,596 1,199,269
Stockholders' equity (deficit) (155,539) 649
---------- ----------
Total liabilities and stockholders' equity $4,035,025 $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 Six Months Ended
June 30, June 30,
-------------------- ----------------------
1994 1993 1994 1993
-------- -------- -------- ---------
(In Thousands, Except Per Share Amounts)
Revenues $468,398 $421,818 $917,992 $ 722,639
Cost of sales:
Production and delivery 313,633 347,159 612,242 558,823
Depreciation and
amortization 29,110 63,196 63,793 98,093
-------- -------- -------- ---------
Total cost of sales 342,743 410,355 676,035 656,916
Exploration expenses 13,150 16,573 25,488 28,318
Provision for restruc-
turing charges - 59,794 - 67,145
Loss on valuation and
sale of assets, net - 45,050 - 85,050
General and adminis-
trative expenses 41,075 53,045 80,801 91,117
-------- -------- -------- ---------
Total costs and
expenses 396,968 584,817 782,324 928,546
-------- -------- -------- ---------
Operating income
(loss) 71,430 (162,999) 135,668 (205,907)
Interest expense, net (22,464) (16,282) (45,894) (31,203)
Gain on conversion/
distribution of FCX
securities 25,968 25,275 69,972 33,296
Other income (expense),
net 1,030 4,782 (445) 3,035
-------- -------- -------- ---------
Income (loss) before
income taxes and
minority interests 75,964 (149,224) 159,301 (200,779)
(Provision) benefit for
income taxes (31,132) 32,701 (64,159) 31,878
Minority interests in
net (income) loss
of consolidated
subsidiaries (30,981) 44,737 (57,872) 68,087
-------- -------- -------- ---------
Income (loss) before
extraordinary item
and changes in
accounting principle 13,851 (71,786) 37,270 (100,814)
Extraordinary loss on
early extinguishment
of debt, net (3,649) - (9,108) -
Cumulative effect of
changes in accounting
principle, net - - - (20,717)
-------- -------- -------- ---------
Net income (loss) 10,202 (71,786) 28,162 (121,531)
Preferred dividends (5,568) (5,593) (11,155) (11,194)
-------- -------- -------- ---------
Net income (loss)
applicable to
common stock $ 4,634 $(77,379) $ 17,007 $(132,725)
======== ======== ======== =========
Primary and fully
diluted net income
(loss) per share:
Before extraordinary
item and changes
in accounting
principle $.06 $(.54) $.19 $(.78)
Extraordinary loss
on early extin-
guishment of debt (.03) - (.07) -
Cumulative effect of
changes in
accounting
principle - - - (.15)
---- ----- ---- -----
$.03 $(.54) $.12 $(.93)
==== ===== ==== =====
Average common and
common equivalent
shares outstanding:
Primary 139,860 142,230 140,360 142,039
======= ======= ======= =======
Fully diluted 139,860 142,230 140,360 142,560
======= ======= ======= =======
Dividends per
common share:
Cash $ - $.3125 $ .3125 $.6250
Property .7550 - .7550 -
------ ------ ------- ------
$.7550 $.3125 $1.0675 $.6250
====== ====== ======= ======
The accompanying notes are an integral part of these financial statement.
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOW (Unaudited)
Six Months Ended
June 30,
----------------------
1994 1993
-------- ---------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 28,162 $(121,531)
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 66,621 102,602
Provision for restructuring charges,
net of payments - 56,688
Other noncash charges to earnings - 33,194
Loss on valuation and sale of assets, net - 85,050
Oil and gas exploration expenses 5,427 10,696
Amortization of debt discount and
financing costs 16,754 21,090
Gain on conversion/distribution of FCX
securities (69,972) (33,296)
Deferred income taxes 46,412 (32,137)
Minority interests' share of net
income (loss) 57,872 (68,087)
Cash distribution from IMC-Agrico Company in
excess of capital interest 25,457 -
Reclamation and mine shutdown expenditures (7,385) (7,387)
(Increase) decrease in working capital,
net of effect of acquisitions:
Accounts receivable 41,716 39,715
Inventories (32,862) 3,354
Prepaid expenses and other (1,146) 7,311
Accounts payable and accrued liabilities (21,225) (101,644)
Other (955) (9,093)
-------- ---------
Net cash provided by operating activities 163,984 7,242
-------- ---------
Cash flow from investing activities:
Capital expenditures:
Metals (323,906) (199,673)
Main Pass (1,845) (36,542)
Agricultural minerals (10,069) (10,152)
Oil and gas (12,458) (23,725)
Other (10,412) (16,058)
Acquisition of RTM, net of cash acquired (5,756) (1,354)
Proceeds from asset sales 44,735 23,000
Other - 4,375
-------- ---------
Net cash used in investing activities (319,711) (260,129)
-------- ---------
Cash flow from financing activities:
Proceeds from issuance of:
FCX Gold-Denominated Preferred Stock $158,476 $ -
FCX 9 3/4% Senior Notes 116,276 -
FRP 8 3/4% Senior Subordinated Notes 146,125 -
Purchase of FTX and FCX common shares (75,733) (757)
Distributions paid to minority interests:
FCX (52,950) (33,862)
FRP (60,592) (60,589)
Proceeds from debt 544,825 221,860
Repayment of debt (544,683) (150,745)
Transfer to MOXY (35,441) -
FTX cash dividends paid:
Common stock (44,023) (88,093)
Preferred stock (11,173) (11,207)
Other 2,278 2,278
-------- --------
Net cash provided by (used in) financing
activities 143,385 (121,115)
-------- --------
Net decrease in cash and short-term
investments (12,342) (374,002)
Cash and short-term investments at beginning
of year 39,785 381,002
-------- --------
Cash and short-term investments at end of
period $ 27,443 $ 7,000
======== ========
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, metals 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
shareholders. 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 six
to twelve months to implement, would be contingent on a number of factors
including (1) assurance that the distribution of FCX shares to FTX
shareholders 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 will be subject
to approval of the FCX Class A shareholders. There can be no assurances that
these contingencies will be met.
Pursuant to the plan to distribute FTX's investment in FCX, in lieu of
paying a $.3125 quarterly cash dividend to its shareholders, FTX distributed
one FCX share for each 80 FTX common shares to shareholders of record on May
16, 1994. FTX recorded a second-quarter gain of $38.3 million ($24.9 million
to net income or $.18 per share) related to this distribution. Subsequent to
the distribution of FCX shares to FTX shareholders under the restructuring
plan, the FTX Board of Directors will determine a new dividend policy.
2. SUBORDINATED DEBENTURE REDEMPTION
In March 1994, FTX purchased $79.8 million of its 10 7/8% Senior Subordinated
Debentures (the Debentures) resulting in a $5.5 million after-tax
extraordinary loss. During the second quarter of 1994, FTX defeased the
remaining $45.5 million of outstanding Debentures, resulting in an after-tax
charge of $3.6 million.
3. McMoRan OIL & GAS CO.
In May 1994, FTX's Board of Directors declared a special distribution to its
common shareholders of one share of the common shares of its newly formed,
wholly owned subsidiary, McMoRan Oil & Gas Co. (MOXY) for each ten shares of
FTX common stock outstanding. 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)
-------
Stockholders' equity $47,355
=======
4. 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. The net proceeds ($158.5
million) were loaned to P.T. Freeport Indonesia Company (PT-FI) for general
corporate purposes, including continued expansion of mining and milling
operations. The Gold-Denominated Preferred Stock, Series II and the Gold-
Denominated Preferred Stock, originally sold in August 1993, are recorded at
their offering price and are being reflected as a hedge of future gold sales
for accounting purposes. Based on the June 30, 1994 closing market price,
these shares had a market value of $400.1 million.
In July 1994, FCX sold publicly 4.8 million depositary shares
representing 119,000 shares of its Silver-Denominated Preferred Stock for net
proceeds of approximately $95 million, excluding the over-allotment option.
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 in eight equal installments a portion of the underlying Silver-
Denominated Preferred Stock, such that it will be fully redeemed by August 1,
2006. The net proceeds will be loaned to PT-FI for general corporate
purposes, including continued expansion of mining and milling operations.
5. REDEMPTION OF FCX ZERO COUPON EXCHANGEABLE NOTES
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 presented for exchange 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 shares of its stock to FCX, bringing FCX's direct ownership in PT-FI to
81.3 percent at June 30, 1994.
6. 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, P.T. ALatieF Freeport Finance Company B.V. (AFFC), a
wholly owned subsidiary of FCX, sold publicly $120 million of 9 3/4% Senior
Notes Due 2001. Approximately $52 million of the net proceeds are expected to
be loaned to P.T. ALatieF Freeport Infrastructure Corporation and one or more
affiliated infrastructure companies during the third quarter of 1994 for the
purchase of approximately $77 million of infrastructure assets from PT-FI.
7. INTEREST COSTS
Interest expense excludes capitalized interest of $11.7 million and $19.6
million in the second quarter of 1994 and 1993, respectively, and $21.7
million and $38.0 million in the first six 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 $72.1 million of
financing at June 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 $75.6 million of financing at June 30, 1994, reducing $14.3 million
annually through 1999. Under these interest swaps, FTX and its subsidiaries
received an average interest rate of 3.6 percent and 3.5 percent during the
first six months of 1994 and 1993, respectively, based on the London Interbank
Offering Rate (LIBOR), resulting in an additional interest cost of $3.6
million and $4.5 million in the second quarter of 1994 and 1993, respectively,
and $7.7 million and $8.9 million in the first six months of 1994 and 1993,
respectively. Based on market conditions at June 30, 1994, unwinding these
interest swaps would require an estimated $16.8 million.
8. RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the first six months of 1994 was
1.7 to 1 compared with a shortfall of $252.3 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.
------------------
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
Second Quarter Six Months
---------------- -----------------
1994 1993 1994 1993 a
------ ------ ------ ------
(In Millions, Except Per Share Amounts)
Revenues $468.4 $421.8 $918.0 $722.6
Operating income (loss) 71.4 (163.0)b 135.7 (205.9)c
Net income (loss) applicable
to common stock 4.6 d (77.4)b 17.0 e (132.7)c
Net income (loss) per share .03 d (.54)b .12 e (.93)c
a. Excludes the results of RTM prior to its March 1993 acquisition.
b. Includes a $165.6 million charge ($74.6 million to net income or $.52 per
share) for administrative restructuring costs, the recoverability of
certain assets, and certain other charges. Also includes a $16.7 million
gain to net income ($.12 per share) related to the conversion of
Freeport-McMoRan Copper & Gold Inc. (FCX) securities.
c. Includes a $213.0 million charge ($93.1 million to net income or $.65 per
share) for the items discussed in Note a and the sale of Freeport-McMoRan
Resource Partners, Limited Partnership's (FRP) geothermal assets. Also
includes a $22.0 million gain to net income ($.15 per share) related to
the conversion of FCX securities and a $20.7 million charge to net income
($.15 per share) for the cumulative effect of changes in accounting
principle.
d. Includes a $16.9 million gain to net income ($.12 per share) related to
the distribution/conversion of FCX securities (Note 1), and a $3.6
million ($.03 per share) after-tax charge for an extraordinary loss on
the early extinguishment of debt (Note 2).
e. Includes a $45.5 million gain to net income ($.33 per share) related to
the distribution/conversion of FCX securities (Notes 1 and 5) and a $9.1
million after-tax charge ($.07 per share) for the early extinguishment of
debt.
Freeport-McMoRan Inc. (FTX) operating results reflect higher earnings
from its metals and agricultural minerals segments primarily due to higher
sales volumes and price realizations for many of its commodities. The
significant decrease in second-quarter 1994 depreciation and amortization
expense results from the combined effect of several unrelated items,
consisting of (1) $9.3 million representing the adjustment to FRP's earnings
from its disproportionate interest in current cash distributions from the IMC-
Agrico Company joint venture and amortization of the excess of FRP's
proportionate share of the recorded amount of the joint venture's net assets
over its book value, (2) $18.7 million attributable to 1993 reductions in the
carrying amount of assets, and (3) the remainder resulting from the change in
the assets owned by FRP as a result of entering into the joint venture and
other factors, partially offset by increases from metals segment operations
due to higher sales volumes. General and administrative expenses in the
second-quarter and six-month periods of 1993 include $15.8 million in charges
resulting from the restructuring project, while the six-month period of 1994
benefited from a $2.7 million reduction in the estimated cost of excess office
space (originally estimated in the second quarter of 1993 as part of the
restructuring project). General and administrative expenses reflect the
benefits from the July 1, 1993 formation of the IMC-Agrico Company joint
venture and other restructuring activities in 1993 and increases in general
and administrative expenses at FTX's metals segment as a result of additional
personnel and administrative effort required to manage the expanding
operations, costs associated with arranging financing for the expansions at
PT-FI and RTM, and the inclusion of RTM results for a full six months in 1994.
Interest expense increased primarily due to the Main Pass sulphur project
becoming operational for accounting purposes in July 1993; previously, Main
Pass development related interest costs were capitalized (Note 7).
FTX recognized earnings of $10.5 million and a loss of $40.8 million,
before income taxes, for the second quarter of 1994 and 1993, respectively,
and earnings of $17.4 million and a loss of $84.2 million, before income
taxes, for the six-month period of 1994 and 1993, respectively, which
represents its proportionate share of FRP's earnings. This included
recognition of $15.5 million, $15.5 million, $28.1 million, and $31.1 million,
respectively, of the gain deferred by FTX in connection with the public sale
of FRP units in February 1992. The remaining deferred gain ($4.6 million as
of June 30, 1994) will be recognized in the third quarter of 1994. In the
future, FRP distributions that are not paid in full to FTX will result in FTX
recognizing a smaller share of any FRP earnings, or a larger share of any FRP
loss than would otherwise be recognized based solely on FTX's ownership
interest in FRP.
Metals Operations
- -----------------
FTX's metals operations are conducted through its affiliate FCX and FCX's
operating units P.T. Freeport Indonesia Company (PT-FI) and Rio Tinto Minera,
S.A. (RTM). Second-quarter 1994 metals operating income was $52.5 million on
revenues of $281.5 million compared with a loss of $18.5 million on revenues
of $215.0 million for the 1993 period. For the six months ended June 30,
1994, FCX generated operating income of $105.7 million on revenues of $547.6
million compared with $7.0 million on revenues of $348.5 million for the year-
ago period. Significant items impacting operating income are as follows (in
millions):
Second Six
Quarter Months
------- ------
Metals operating income - 1993 $(18.5) $ 7.0
------ ------
Increases (decreases):
Price realization:
Copper 20.3 25.9
Gold 5.6 16.0
Sales volumes:
Copper 26.0 42.7
Gold 20.2 40.3
Treatment charges (10.2) (11.3)
Adjustments to prior period
concentrate sales 12.1 10.3
Other 3.9 (0.5)
RTM revenues, net of eliminations (11.4) 75.7
------ ------
Revenue variance 66.5 199.1
Cost of sales (7.9)* (108.4)*
Exploration expenses (2.3) (3.9)
1993 provision for restructuring charges 17.4 20.8
General and administrative expenses (2.7)* (8.9)*
------ ------
71.0 98.7
------ ------
Metals operating income - 1994 $ 52.5 $105.7
====== ======
* The second-quarter and six-month periods of 1993 included charges
totaling $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 in the 1994 periods were improved price
realizations for copper (13 percent and 9 percent, respectively) and gold (9
percent and 12 percent, respectively). Second-quarter and six-month copper
sales volumes rose 21 percent and 17 percent, respectively, as increased
production resulting from increased mill throughput was partially offset by
lower recoveries. Gold sales volumes increased 46 percent and 45 percent over
the 1993 periods, respectively, reflecting the higher production resulting
from increased mill throughput and improvements in gold grades (19 percent and
17 percent, respectively) partially offset by lower gold recoveries. The
lower recovery rates for copper and gold result from mining a harder-to-treat
ore. Copper and gold grades and recovery rates are expected to improve in the
second half of 1994. Treatment charges increased primarily due to higher
copper volumes and prices, as certain charges vary with the price of copper.
Adjustments to prior period concentrate sales for the current quarter and six-
month period resulted in positive adjustments of $8.7 million and $3.0
million, respectively, primarily caused by favorable copper pricing
adjustments, compared to the 1993 periods when falling copper prices resulted
in negative adjustments of $3.4 million and $7.3 million, respectively.
PT-FI OPERATIONS Second Quarter Six Months
-------------------- ------------------
1994 1993 1994 1993
------- ------- ------- -------
Ore milled (metric tons per
day, MTPD) 71,300 56,600 72,300 59,000
Copper grade (%) 1.39 1.40 1.38 1.46
Gold grade (grams per MT) 1.13 .95 1.24 1.06
Recovery rate (%)
Copper 84.0 87.3 83.7 86.7
Gold 73.0 76.7 70.9 74.7
Copper (000s of recoverable pounds)
Production 161,000 133,500 321,500 284,100
Sales 168,800 140,000 324,500 278,100
Average realized price a $1.02 $.90 $1.00 $.92
Gold (recoverable ounces)
Production 165,700 116,900 356,500 263,700
Sales 185,400 127,200 386,700 267,500
Average realized price $378.00 $347.57 $379.53 $338.18
Gross profit per pound of copper (cents):
Average realized price a 102.2 90.3 99.6 91.6
----- ---- ---- ----
Production costs:
Site production and delivery 61.4 53.4 60.4 52.0
Gold and silver credits (42.5) (32.4) (45.6) (32.8)
Treatment charges 24.2 22.0 23.7 23.6
Royalty on metals 2.0 1.3 1.7 1.7
---- ---- ---- ----
Cash production costs 45.1 44.3 40.2 44.5
Depreciation and
amortization 8.0 8.7 8.1 8.7
---- ---- ---- ----
Total production costs 53.1 53.0 48.3 53.2
---- ---- ---- ----
Revenue adjustments b 5.1 (5.9) (0.3) (4.1)
---- ---- ---- ----
Gross profit per pound 54.2 31.4 51.0 34.3
==== ==== ==== ====
a. Excluding amounts recognized under PT-FI's copper price protection
program, realizations for the second-quarter and six-month periods of
1994 and 1993 would have been $.99, $.86, $.98, and $.87, respectively.
Including the adjustments discussed in Note b, realizations for the
second-quarter and six-month periods of 1994 and 1993 would have been
$1.07, $.84, $.99, and $.88, respectively.
b. Reflects adjustments for prior period concentrate sales and amortization
of the cost of the price protection program.
PT-FI's second-quarter mill throughput rate increased 26 percent compared
with the 1993 period as the expansion activities continue toward a level of
115,000 MTPD by year-end 1995. Mill throughput rates are expected to
approximate second quarter levels for the remainder of 1994. PT-FI site
production and delivery costs totaled $103.6 million for the second quarter of
1994, a 40 percent increase over the 1993 period, excluding $10.0 million of
charges in 1993 related to the restructuring. Unit site production and
delivery costs during the second quarter of 1994 increased 15 percent over the
year-ago period, excluding the 1993 charges discussed above, resulting from
lower production per ton mined (because of lower recoveries stemming from
harder-to-treat ore), higher jobsite administrative expenses, and expansion
related activities. Unit site production and delivery costs for the remainder
of 1994 are expected to be lower than in the first six months as a result of
an anticipated improvement in grades and recoveries. Second-quarter 1994 per
pound gold and silver credits increased 31 percent over the 1993 period
because of higher gold grades and realizations.
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.
In June 1994, copper prices rose above $1.10 per pound, primarily due to
strengthening global demand and reduced copper stocks, compared with 1993
prices which had dropped to the lowest levels since 1987. Because of the
recent improvement in prices, PT-FI entered into contracts covering
substantially all of its expected remaining 1994 copper sales resulting in
prices of approximately $1.07 per pound for the second quarter (including a
positive adjustment of 5.1 cents primarily related to price increases on
copper pounds that were not final-priced at March 31, 1994), $1.04 per pound
for the third quarter and $1.05 per pound for the fourth quarter. Included in
the fourth quarter expected price is $27.3 million cash received, which will
be recognized in fourth quarter revenues, from the settlement of certain
contracts originally designed to hedge fourth quarter sales. These contracts
were purchased in March and April of 1994 when copper prices were still below
$.90 per pound and were subsequently sold in June. As a result, PT-FI's
average realized copper price is expected to approximate $1.02 per pound for
1994. These actions by PT-FI provide it assured realizations for its 1994
copper sales that reflect the relatively high recent price of copper. Copper
sales in the first quarter of 1994 averaged $.90 per pound, which exceeded the
then current market price, as a result of PT-FI's previous $.90 per pound
price protection program. Revenues for the second-quarter and six-month
periods of 1994 and 1993 include net amounts recognized under the $.90 per
pound price protection program and the contracts referred to above totaling
$3.0 million, $9.4 million, $.4 million, and $6.7 million, respectively. The
impact on earnings totaled $1.2 million, $3.7 million, $.2 million, and $2.7
million, respectively.
In March and April of 1994, PT-FI extended its price protection program,
at a cost of $21.7 million, to cover anticipated copper sales through 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 an average floor price of $.83 per
pound, while allowing full benefit from prices above that amount. As of June
30, 1994, unwinding PT-FI's hedging position would require approximately $50
million. As conditions warrant, PT-FI may modify or extend its existing price
protection program. PT-FI has sales commitments from various parties for
virtually all of its estimated 1994 and 1995 production to be priced at the
then current market price under the terms of the contracts.
RTM OPERATIONS Second Quarter Six Months
------------------ ------------------
1994 1993 1994 1993 a
------- ------- ------- -------
Smelter operations:
Concentrate treated (MT) 126,400 115,300 244,400 115,300
Anode production (000s of
pounds) 91,900 102,500 175,500 102,500
Cathode production (000s of
pounds) 77,800 76,300 154,100 76,300
Gold operations:
Ore milled (MTPD) 18,600 18,300 18,400 18,300
Gold grade (grams per MT) 1.03 1.02 1.03 1.02
Sales (recoverable ounces) 43,300 44,500 80,700 44,500
Average realized price b $370.21 $336.10 $367.87 $336.10
a. RTM results are from March 30, 1993, the date of its acquisition.
b. Excluding hedging adjustments primarily related to RTM's gold loans
(9,200 ounces payable quarterly), realizations for the second-quarter and
six-month periods of 1994 and 1993 would have been $381.62, $359.72,
$382.83, and $359.72, respectively.
For the second-quarter and six-month periods of 1994, RTM contributed
earnings of $1.0 million and $2.7 million, respectively, compared with a loss
of $4.4 million for the period from acquisition to June 30, 1993. RTM has a
hedging program for its gold sales that includes gold denominated loans and
forward contracts. As of June 30, 1994, the unrecognized balance of the gold
denominated loans totaled approximately $5 million. Revenues for the second-
quarter and six-month periods of 1994 and 1993 include amounts recognized
under the hedging program totaling $.5 million, $1.1 million, $1.2 million,
and $1.1 million, respectively. Higher operating rates at RTM's smelter
resulted in a 10 percent increase in the amount of concentrate being treated
during the 1994 quarter compared with the 1993 period. RTM has commitments
from most of its suppliers for 1994 treatment charges at rates in excess of
current spot market rates. About one third of the contract terms have been
priced for 1995, when rates are expected to be lower because of changes in
market conditions. Cathode refinery operations continued to maintain high
operating rates. RTM's gold operations realized a mill throughput level
slightly above second-quarter 1993 levels; however, second-quarter 1994 gold
sales were lower than the 1993 period because of lower recoveries. Third-
quarter 1994 RTM earnings and potentially future periods are expected to be
negatively impacted by the recent decline in the value of the U.S. dollar and
planned mining of lower grade ore at RTM's gossan mining operations.
METALS EXPLORATION
During the quarter, PT-FI reported results from exploration activities within
its original 24,700 acre Contract Of Work (COW) area (Block A) as well as in
the adjacent 6.5 million acre COW area (Block B) and the 2.5 million acre
exploration permit area (Eastern Mining blocks). Additional mineralization
was discovered at the Big Gossan, Wanagon and Lembah Tembaga prospects, all
within Block A. Mineralization was also discovered at the Wabu prospect in
Block B and exploratory drilling has now begun at Etna Bay located within the
Eastern Mining Blocks. Exploration expenses, currently budgeted at $44
million for 1994, including $6 million for RTM, totaled $19.6 million in the
six-month 1994 period compared with $15.7 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 partnership interest in IMC-
Agrico Company which was formed effective July 1, 1993) and its sulphur
business, reported second-quarter 1994 operating income of $27.1 million on
revenues of $176.5 million compared with a loss of $85.4 million on revenues
of $186.8 million for the 1993 period. Operating income for the first six
months of 1994 was $47.6 million on revenues of $349.0 million compared with a
loss of $102.3 million on revenues of $342.5 million for the year-ago period.
Significant items impacting operating income are as follows (in millions):
Second Six
Quarter Months
------- -------
Agricultural minerals operating income - 1993 $(85.4) $(102.3)
Increases (decreases):
Sales volumes (30.7) (14.1)
Realizations 19.6 20.2
Other .8 .4
------ -------
Revenue variance (10.3) 6.5
Cost of sales 52.7 * 65.5 *
1993 provision for restructuring charges 30.7 33.9
1993 loss on valuation and sale of assets, net 26.6 26.6
General and administrative and other 12.8 * 17.4 *
------ -------
Agricultural minerals operating income - 1994 $ 27.1 $ 47.6
====== =======
* The second-quarter and six-month periods of 1993 included charges
totaling $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 Company second-quarter 1994
sales volumes for diammonium phosphate (DAP), its principal fertilizer
product, decreased from FRP's high level of sales during the 1993 period.
Industrywide domestic sales activity was lower due to an early domestic
planting season. However, strong export purchases, especially by China,
continued during the current quarter and helped to keep DAP prices firm
despite a rise in producer inventories. Second-quarter 1994 phosphate
fertilizer prices continued to strengthen from the already improved first-
quarter 1994 levels. As a result, FRP's average DAP realizations for the 1994
periods were significantly improved from the near 20-year lows experienced
during the 1993 periods. Unit production costs reflected higher ammonia
prices, offset by production efficiencies from IMC-Agrico Company.
Strong export demand for phosphate fertilizer products for the remainder
of 1994 is expected to continue as key export customers, particularly China,
remain active in the marketplace. Business in other international markets
such as India, Pakistan, and Latin America is expected to sustain a tight
supply/demand balance. Normal summer plant maintenance turnarounds throughout
the industry should reduce industry operating rates during the third quarter.
Additionally, since late-1992, phosphate fertilizer exports from the former
Soviet Union have declined by nearly 40 percent and are not likely to rebound.
From an FRP standpoint, the completion of spring planting contributed to IMC-
Agrico Company idling its Taft, Louisiana fertilizer plant and accelerating
the plant maintenance turnarounds at three of its fertilizer facilities.
FRP's proportionate share of the larger IMC-Agrico Company phosphate rock
operation caused second-quarter and six-month 1994 sales volumes to increase
24 percent and 20 percent from the 1993 periods, respectively.
Second Quarter Six Months
------------------- ---------------------
1994 1993 1994 1993
-------- -------- --------- ---------
Phosphate fertilizers (short tons)a
Diammonium phosphate
Sales:
Florida 277,900 494,500
Louisiana 184,700 456,400
Other 55,400 101,400
------- -------- --------- ---------
Total sales 518,000 844,000 1,052,300 1,339,300
Average realized price:b
Florida $145.10 $140.46
Louisiana 153.18 147.63
Monoammonium phosphate
Sales:
Granular 73,900 188,000 160,600 310,800
Powdered 40,400 - 83,200 -
Average realized price:b
Granular $160.55 $156.69
Powdered 127.08 123.73
Granular triple superphosphate
Sales 102,300 162,900 232,700 340,600
Average realized priceb $118.44 $111.49
Phosphate rock (short tons)a
Sales 1,004,100 807,600 2,010,600 1,682,200
Average realized priceb $23.24 $22.47
Sulphur (long tons)
Salesc 508,100 538,100 1,023,600 998,800
a. Certain information prior to the July 1, 1993 formation of IMC-Agrico
Company 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 assets of IMC-Agrico Company during 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 assets of IMC-Agrico Company during the
year ended June 30, 1995 is 45.1 percent, while it will receive 55.0
percent of the cash flow generated during such period.
b. Represents average realization f.o.b. plant/mine.
c. Includes 187,700 tons, 413,200 tons, 374,800 tons, and 750,600 tons for
the second-quarter and six-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.
Sulphur production for the 1994 periods increased over the 1993 period
levels with Main Pass operations averaging nearly 6,200 tons per day during
the current quarter (exceeding full design operating rates of 5,500 tons per
day or approximately 2 million tons per year), helping to lower unit
production costs. Production is expected to be near the 6,000 tons per day
level for the immediate future. Further efforts to optimize earnings and cash
flow are being made, including a "water load" management program which should
further improve unit costs. Due to the increased production from Main Pass,
FRP ceased operating the marginally profitable Caminada mine in January 1994,
with no material impact on FRP's earnings. Sulphur realizations for the 1994
periods were significantly lower, reflecting the decline in prices which
occurred throughout 1993. Improved phosphate fertilizer operating rates,
coupled with reduced imports from Canada and Mexico and lower sulphur
recoveries from oil refineries, resulted in a $6 to $8 per ton improvement in
Tampa, Florida sulphur prices early in the third quarter of 1994; however,
Canadian producers continue to increase inventories and FRP does not
anticipate a major increase in sulphur prices for at least the near term.
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 Company. IMC
Fertilizer, Inc., as operator of the joint venture, is assessing what actions
are necessary and appropriate in the circumstances. The joint venture accrued
as of June 30, 1994, estimated costs of $1.9 million to rectify the situation.
While there is no evidence that indicates the hole will result in significant
liability for the joint venture, the issue of possible underground water
contamination in areas away from the New Wales facility as a result of the
hole is being investigated by IMC-Agrico Company. 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 Company
considers unlikely, a determination would be necessary with respect to the
availability of insurance maintained by the joint venture and separately by
FRP and to the appropriate sharing of costs pursuant to the agreement between
the joint venture partners as it relates to environmental matters.
Oil And Gas Operations
- ----------------------
Prior to the distribution of McMoRan Oil & Gas Co. shares to FTX shareholders,
FTX's oil and gas operations (excluding the Main Pass oil operation) involved
exploring for new reserves. These activities generated losses of $2.8 million
and $11.1 million, including exploration expenses of $1.3 million and $5.4
million, for the second-quarter and six-month period of 1994, respectively,
compared with losses of $25.6 million and $31.1 million, including exploration
expenses of $6.2 million and $10.7 million, for the 1993 periods,
respectively. See Note 3 to the financial statements regarding the formation
of McMoRan Oil & Gas Co.
Main Pass's oil operations achieved the following:
Second Quarter Six Months
----------------- ----------------------
1994 1993 1994 1993
------- ------- --------- ---------
Sales (barrels) 611,900 925,700 1,435,100 1,359,200
Average realized price $14.52 $16.01 $12.88 $15.86
Operating income (in
millions) 1.0 .9 2.0 (.8)
Second-quarter 1994 oil production for the Main Pass joint venture (in
which FRP owns a 58.3 percent interest) was hampered by mechanical problems,
which have been corrected, at one of the two oil platforms and by the
anticipated increase in water encroachment into the producing oil wells. FRP
recently initiated the drilling of additional wells at an estimated cost to
FRP of approximately $4 million. As a result, FRP's 1994 net production is
currently expected to be slightly under 3 million barrels. Oil realizations
continue to reflect the significant price declines which occurred in late
1993; although prices have improved throughout 1994, and continued improving
into the third quarter of 1994.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operating activities increased to $164.0 million during the
first six months of 1994 from $7.2 million for the 1993 period, primarily due
to higher operating income and changes in working capital. Net cash used in
investing activities was $319.7 million compared with $260.1 million for the
1993 period. Increased metals capital expenditures associated with the PT-FI
and RTM expansions were partially offset by lower Main Pass expenditures and
the early receipt of proceeds from the geothermal notes receivable (reflected
in long-term receivables). Net cash provided by financing activities was
$143.4 million, whereas the 1993 period resulted in a use of $121.1 million.
The 1994 period includes proceeds totaling $420.9 million from the public
sales of FCX and FRP securities (Notes 4 and 6). Distributions to FCX
minority interests increased during 1994 as a result of increased FCX public
common shares outstanding and dividends paid on preferred stock issued during
the second half of 1993 and January 1994. Debt repayments include $142.9
million paid to purchase and defease FTX's 10 7/8% Senior Subordinated
Debentures (Note 2).
Through 1995, PT-FI's capital expenditures are expected to exceed cash
flow from its operations. Upon completion of the 115,000 MTPD expansion by
year-end 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 EIP, and ongoing capital maintenance expenditures are expected to
range from $600 million to $700 million and 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 PT-
FI/FTX credit facility (which had $242.0 million availability at July 22,
1994) and public and private issuances of securities. PT-FI's long-lived,
low-cost reserve base provides its 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 will 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 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 sale of the first group of assets to the
ALatieF Joint Venture was completed in December 1993 for $90 million. Debt
financing for the remaining sales, which are anticipated for 1994 and later,
was finalized through the issuance of $120 million of 9 3/4% Senior Notes,
which are guaranteed by FCX. The next sale (approximately $77 million) is
expected to be completed in the third quarter of 1994.
PT-FI has also entered into Letters of Intent to sell: (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 $315 million (net of
equity contributions) over the next two years. 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 deutsche marks and
pesetas, however RTM has hedging arrangements that fix the cost of the
expansion program at approximately $215 million. Project financing of $270
million, which is nonrecourse to FCX, has been arranged, which will also
provide funds for refinancing RTM's gold and silver loans and working capital
loans. The financing arrangement requires an additional equity contribution
of $30 million, which is being sought from third parties. 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 (a one
peseta change in the exchange rate has an approximately $1 million impact on
RTM's cash flow and net income), 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.
PT-FI's COW calls for it to conduct a feasibility study for the
construction of a copper smelting facility in Indonesia and for the eventual
construction of such a facility by PT-FI, if it is deemed to be economically
viable by PT-FI and the Government of Indonesia. FCX recently announced that
PT-FI and RTM have now 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 approximately 50 percent of the
annual concentrate requirements of the Gresik smelter. Preliminary
engineering on the proposed smelter has been completed and management is
currently reviewing possible alternatives for financing the estimated $650
million to $700 million construction cost. The smelter could be operational
as early as 1998.
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 July 19, 1994, FRP
declared a distribution of 60 cents per publicly held unit ($30.3 million),
payable August 15, 1994, bringing the total unpaid distribution to FTX to
$303.1 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 July 1994 distributable cash included $34.4 million from IMC-
Agrico Company. FRP will receive a total of $55.2 million of distributions
from IMC-Agrico Company, including $12.9 million from working capital
reductions and $7.9 million from the sale of an asset which will be used to
reduce FRP's long-term debt. FRP's future distributions will be dependent on
the distributions received from IMC-Agrico Company, which will primarily be
determined by prices and sales volumes of its commodities and cost reductions
achieved by its combined operations, and the future cash flow of FRP's sulphur
and oil operations.
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, 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
quarter, in lieu of paying a $.3125 quarterly cash dividend to its
shareholders, FTX distributed one share of FCX Class A common stock for each
80 FTX common shares to shareholders of record on May 16, 1994. Subsequent to
the distribution of FCX shares to FTX shareholders under the proposed
restructuring plan (Note 1), the FTX Board of Directors will determine a new
dividend policy appropriate for FTX.
------------------------
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
FREEPORT-McMoRan INC.
PART II--OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
(a) The annual meeting of the security holders of the registrant was
held on May 3, 1994, and proxies for such meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
(c) At the annual meeting six of the sixteen directors of the registrant
were elected to a three-year term. Each of management's nominees was elected,
and there was no solicitation in opposition to management's nominees. Set
forth immediately below is the name of each such nominee, the number of shares
voted for each such nominee, and the number of shares voted withheld from each
such nominee. There were no abstentions or broker non-votes with respect to
the election of directors.
Number of Shares
Number of Shares Voted Voted Withheld From
Name of Nominee For Nominee Nominee
--------------------- ---------------------- -------------------
Thomas B. Coleman 115,249,525 804,177
William B. Harrison, Jr. 115,233,439 820,263
Henry A. Kissinger 114,972,683 1,081,019
Rene L. Latiolais 115,242,525 811,177
J. Taylor Wharton 115,176,902 876,800
Ward W. Woods, Jr. 115,237,460 816,242
At the annual meeting, the board of directors of the registrant submitted
to a vote of the security holders a proposal to ratify the appointment of
Arthur Andersen & Co. as the independent auditors to audit the financial
statements of the registrant and its subsidiaries for the year 1994. The
security holders approved such proposal by an affirmative vote of 115,280,651
shares. There were 361,087 shares voted against such proposal, and holders of
411,964 shares abstained from voting with respect to such proposal. There
were no broker non-votes with respect to such proposal.
The board of directors of the registrant also submitted to a vote of the
security holders at such meeting a proposal to amend the Annual Incentive Plan
of the registrant in several respects so as to qualify compensation payable
thereunder for deductibility in accordance with Section 162(m) of the Internal
Revenue Code of 1986, as amended. The security holders approved such proposal
by an affirmative vote of 91,217,012 shares. There were 21,439,469 shares
voted against such proposal, and holders of 3,397,221 shares abstained from
voting with respect to such proposal. There were no broker non-votes with
respect to such proposal.
The board of directors of the registrant also submitted to a vote of the
security holders at such meeting a proposal to approve the 1992 Long-Term
Performance Incentive Plan of the registrant, as amended. The security
holders approved such proposal by an affirmative vote of 98,720,817 shares.
There were 13,763,113 shares voted against such proposal, and holders of
3,569,772 shares abstained from voting with respect to such proposal. There
were no broker non-votes with respect to such proposal.
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: August 5, 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
EXHIBIT 11.1
FREEPORT-McMoRan INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ---------------------
1994 1993 1994 1993
------- --------- ------- ---------
(In Thousands, Except Per Share Amounts)
Primary:
Net income (loss)
applicable to
common stock $ 4,634 $(77,379) $17,007 $(132,725)
======= ======== ======= =========
Average common
shares outstanding 138,860 141,136 139,360 141,035
Common stock
equivalents:
Stock options 1,000 1,094 1,000 1,004
------- -------- ------- ---------
Common and common
equivalent shares 139,860 142,230 140,360 142,039
======= ======== ======= =========
Net income (loss)
per common and
common equivalent
share $.03 $(.54) $.12 $(.93)
==== ===== ==== =====
Fully diluted:
Net income (loss) applicable to common stock:
Net income (loss) $ 4,634 $(77,379) $17,007 $(132,725)
Plus preferred
dividends - - - -
Plus interest, net
of tax effect, on
convertible
subordinated
debentures - - - -
------- -------- ------- ---------
Net income (loss)
applicable to
common stock $ 4,634 $(77,379) $17,007 $(132,725)
======= ======== ======= =========
Average common
shares
outstanding 138,860 141,136 139,360 141,035
Common stock
equivalents:
Stock options 1,000 1,094 1,000 1,525
Convertible
securities:
Preferred stock - - - -
Convertible
subordinated
debentures - - - -
------- ------- ------- -------
Common and common
equivalent shares 139,860 142,230 140,360 142,560
======= ======= ======= =======
Net income (loss)
per common and
common equivalent
share $.03 $(.54) $.12 $(.93)
==== ===== ==== =====
