SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 5, 1995
FREEPORT-McMoRan INC.
Delaware 1-8124 13-3051048
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Freeport-McMoRan Inc.
Item 2. Acquisition or Disposition of Assets.
------------------------------------
In May 1994, Freeport-McMoRan Inc. (FTX) announced that it was
taking steps to effect the tax-free distribution to its common
stockholders of all the Class B common stock of Freeport-McMoRan Copper
& Gold Inc. (FCX) which FTX owns at the time of such distribution. This
distribution would separate its two principal businesses, copper/gold
and agricultural minerals, into two independent financial and operating
entities. FTX recently completed the restructuring of its long-term
debt and preferred stock through a series of transactions. On July 5,
1995, the FTX Board of Directors declared a distribution of the Class B
common stock of FCX to FTX common stockholders of record on July 17,
1995, representing approximately 0.702 shares of FCX Class B common
stock per FTX common share.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial statements of business acquired. Not applicable.
(b) Pro forma financial information. The pro forma financial
statements of FTX filed as part of this report are listed in
the Financial Information Table of Contents appearing on
page F-1 hereof.
(c) Exhibits. The exhibits to this report are listed in the
Exhibit Index appearing on page E-1 hereof.
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
Assistant Vice President &
Controller - Financial Reporting
Date: July 11, 1995
Freeport-McMoRan Inc.
Financial Information
Table of Contents
Freeport-McMoRan Inc.
Unaudited Pro Forma Statement of Income for the Year
Ended December 31, 1994 F-2
Unaudited Pro Forma Statement of Income for the Three
Months Ended March 31, 1995 F-3
Unaudited Pro Forma Condensed Balance Sheet as of
March 31, 1995 F-4
Notes to Pro Forma Financial Statements F-5
Freeport-McMoRan Inc.
Unaudited Pro Forma Statement of Income
Year Ended December 31, 1994
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------
FCX
Spinoff Other
Historical (Note 1) (Note 2) Pro Forma
---------- ----------- ------- ---------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Revenues $1,982,396 $(1,212,284) $62,070 $832,182
Cost of sales:
Production and delivery 1,297,007 (740,261) 64,126 620,872
Depreciation and amortization 132,713 (76,302) 1,741 58,152
---------- ----------- ------- --------
Total cost of sales 1,429,720 (816,563) 65,867 679,024
Exploration expenses 47,052 (40,380) (5,427) 1,245
Gain on insurance settlement (32,602) 32,602 - -
General and administrative 167,390 (109,011) 2,581 60,960
---------- ----------- ------- --------
Total costs and expenses 1,611,560 (933,352) 63,021 741,229
---------- ----------- ------- --------
Operating income 370,836 (278,932) (951) 90,953
Interest expense, net (91,834) - 66,737 (25,097)
Gain on conversion/distribution
of FCX securities 114,750 (114,750) - -
Other expense, net (3,830) 1,042 542 (2,246)
---------- ----------- ------- --------
Income before income taxes and
minority interests 389,922 (392,640) 66,328 63,610
Provision for income taxes (148,388) 168,194 (25,169) (5,363)
Minority interests in net income of
consolidated subsidiaries (168,951) 110,717 (3,537) (61,771)
---------- ----------- ------- --------
Income (loss) before extraordinary
item 72,583 (113,729) 37,622 (3,524)
Extraordinary loss on early
extinguishment of debt, net (9,108) - 9,108 -
---------- ----------- ------- --------
Net income (loss) 63,475 (113,729) 46,730 (3,524)
Preferred dividends (22,032) - 17,650 (4,382)
---------- ----------- ------- --------
Net income (loss) applicable to
common stock $ 41,443 $ (113,729) $64,380 $ (7,906)
========== =========== ======= ========
Net income (loss) per primary share:
Before extraordinary item $.37 $(.05)
Extraordinary loss on early
extinguishment of debt, net (.07) -
---- -----
$.30 $(.05)
==== =====
Average shares outstanding (Note 2) 139,223 171,163
======= =======
The accompanying notes are an integral part of these pro forma financial statements.
</TABLE>
Freeport-McMoRan Inc.
Unaudited Pro Forma Statement of Income
Three Months Ended March 31, 1995
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------
FCX
Spinoff Other
Historical (Note 1) (Note 2) Pro Forma
---------- --------- ------- ---------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Revenues $663,285 $(408,806) $ - $254,479
Cost of sales:
Production and delivery 396,704 (224,202) - 172,502
Depreciation and amortization 36,642 (22,303) - 14,339
-------- --------- ------- --------
Total cost of sales 433,346 (246,505) - 186,841
Exploration expenses 8,125 (7,956) - 169
General and administrative 50,445 (32,850) - 17,595
-------- --------- ------- --------
Total costs and expenses 491,916 (287,311) - 204,605
-------- --------- ------- --------
Operating income 171,369 (121,495) - 49,874
Interest expense, net (25,059) - 17,709 (7,350)
Other expense, net (583) 718 - 135
-------- --------- ------- --------
Income before income taxes
and minority interests 145,727 (120,777) 17,709 42,659
Provision for income taxes (50,127) 52,513 (6,198) (3,812)
Minority interests in net income
of consolidated subsidiaries (70,740) 44,569 (5,112) (31,283)
-------- --------- ------- --------
Net income 24,860 (23,695) 6,399 7,564
Preferred dividends (5,469) - 4,373 (1,096)
-------- --------- ------- --------
Net income applicable to
common stock $ 19,391 $ (23,695) $10,772 $ 6,468
======== ========= ======= ========
Net income per primary share $.14 $.04
==== ====
Average shares outstanding (Note 2) 137,326 168,673
======= =======
The accompanying notes are an integral part of these pro forma financial statements.
</TABLE>
Freeport-McMoRan Inc.
Unaudited Pro Forma Condensed Balance Sheet
March 31, 1995
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------
FCX
Spinoff Other
Historical (Note 1) (Note 2) Pro Forma
---------- ----------- -------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
Cash and short-term investments $ 57,597 $ (34,308) $ - $ 23,289
Accounts receivable 279,601 (196,344) - 83,257
Inventories 451,513 (343,175) - 108,338
Prepaid expenses and other 18,002 (12,226) - 5,776
---------- ----------- -------- ----------
Total current assets 806,713 (586,053) - 220,660
Property, plant and equipment, net 3,581,421 (2,575,752) - 1,005,669
Other assets 217,901 (70,366) (75,263) 72,272
---------- ----------- -------- ----------
Total assets $4,606,035 $(3,232,171) $(75,263) $1,298,601
========== =========== ======== ==========
Accounts payable and accrued
liabilities $ 551,560 $ (394,726) $ 21,842 $ 178,676
Current portion of long-term debt
and short-term borrowings 34,916 (34,602) - 314
---------- ----------- -------- ----------
Total current liabilities 586,476 (429,328) 21,842 178,990
Long-term debt, less current
portion 1,830,212 (640,401) (804,744) 385,067
Reclamation and mine shutdown
reserves 140,837 (7,580) - 133,257
Accrued postretirement benefits and
other liabilities 482,840 (195,073) - 287,767
Deferred income taxes 306,432 (380,948) 74,516 -
Minority interests in consolidated
subsidiaries 1,515,781 (1,346,127) 47,862 217,516
Stockholders' equity (deficit) (256,543) (232,714) 585,261 96,004
---------- ----------- -------- ----------
Total liabilities and
stockholders' equity $4,606,035 $(3,232,171) $(75,263) $1,298,601
========== =========== ======== ==========
The accompanying notes are an integral part of these pro forma financial statements.
</TABLE>
Freeport-McMoRan Inc.
Notes to Unaudited Pro Forma Financial Statements
The accompanying Unaudited Pro Forma Statements of Income have been
prepared assuming the transactions discussed below occurred on January 1,
1994, whereas the Unaudited Pro Forma Condensed Balance Sheet assumes the
transactions occurred on March 31, 1995. The pro forma financial statements
are not necessarily indicative of the actual results that would have been
achieved nor are they indicative of future results.
1. FCX SPINOFF
In May 1994, Freeport-McMoRan Inc. (FTX) announced that it was taking
steps to effect the tax-free distribution to its common stockholders of
all the Class B common stock of Freeport-McMoRan Copper & Gold Inc. (FCX)
which FTX owns at the time of such distribution. This distribution would
separate its two principal businesses, copper/gold and agricultural
minerals, into two independent financial and operating entities. FTX
recently completed the restructuring of its long-term debt and preferred
stock through a series of transactions discussed below. On July 5, 1995,
the FTX Board of Directors declared a distribution of the Class B common
stock of FCX to FTX common stockholders of record on July 17, 1995,
representing approximately 0.702 shares of FCX Class B common stock per
FTX common share. As a result of this distribution, FTX will no longer
own any interest in FCX, and the financial results related to FCX have
been eliminated from the pro forma financial statements.
2. OTHER TRANSACTIONS
FTX has completed the following other financial transactions:
a) FCX STOCK SALES
In May 1995, FTX sold 21.5 million shares of FCX Class A common stock
for $450 million to a subsidiary of The RTZ Corporation PLC (RTZ) in
accordance with the previously announced definitive agreements. On
July 5, 1995, FTX sold an additional 2.4 million shares of FCX Class
A common stock for $50.2 million to a subsidiary of RTZ.
Pro forma balance sheet adjustments for these transactions include:
- Sales proceeds as a reduction to long-term bank debt.
- Recognition of the additional minority interest in FCX.
- The estimated income tax effect arising from the sales (including
$27 million of taxes included in accounts payable).
- The estimated after-tax gain from the sales, representing the
excess of sales proceeds over FTX's book basis in the FCX shares
sold. These gains are not included in the pro forma statement of
income in accordance with Securities and Exchange Commission
requirements concerning pro forma financial statements; however,
the gains will be reflected in FTX's statement of income for the
appropriate period.
Pro forma statement of income adjustments for these transactions
include:
- Interest savings caused by a reduction in long-term debt.
- The related tax impact, using statutory income tax rates.
- The additional minority interest ownership in FCX's earnings.
b) Debt and Preferred Stock Restructuring
- In early 1994, FTX defeased its 10 7/8% Subordinated Debentures
(10 7/8% Debentures), recognizing an extraordinary after-tax loss
of $9.1 million.
- In April 1995, FTX exchanged 11.4 million FTX common shares for 4
million shares of its $4.375 Convertible Exchangeable Preferred
Stock ($4.375 Preferred Stock) in accordance with an exchange
offer. The exchange offer allowed each share of $4.375 Preferred
Stock to be exchanged for 2.85 shares of FTX common stock, versus
the applicable conversion rate of 2.35 shares per each share of
$4.375 Preferred Stock. As a result of the exchange offer, FTX
will recognize a $34 million noncash charge (to be reflected as
additional preferred dividends) in its statement of income for the
three months ended June 30, 1995. In accordance with Securities
and Exchange Commission requirements concerning pro forma
financial statements, this charge is not included in the pro forma
statement of income.
- On June 12, 1995, FTX redeemed its Zero Coupon Convertible
Subordinated Debentures Due 2006 (ABC Debentures) for cash at a
redemption price equal to book value. Prior to the redemption,
holders of $0.5 million of ABC Debentures converted their
debentures into 7,040 FTX common shares.
- On June 30, 1995, FTX redeemed its remaining $16.4 million face
amount of 6.55% Convertible Subordinated Notes Due 2001 (6.55%
Notes), with a book value of $14.1 million, for $15 million of
cash. Prior to the redemption, FTX increased the number of FTX
common shares that would be receivable upon conversion of the
6.55% Notes to 55.95 shares per $1,000 principal amount. Holders
of $356.6 million face amount of 6.55% Notes converted their notes
at the enhanced rate into 19.9 million FTX common shares. As a
result of the enhanced conversion rate and the redemption premium,
FTX will recognize a $44 million charge in its statement of income
for the three months ended June 30, 1995. In accordance with
Securities and Exchange Commission requirements concerning pro
forma financial statements, this charge is not included in the pro
forma statement of income.
Pro forma balance sheet adjustments for these transactions include:
- The write-off of deferred charges and accrued interest associated
with the ABC Debentures and 6.55% Notes.
- A reduction in debt associated with the conversions of 6.55%
Notes, with a corresponding increase in stockholders' equity.
Pro forma statement of income adjustments for these transactions
include:
- A reduction in interest expense caused by reduced debt levels and
by replacing fixed-rate note borrowings with lower variable-rate
borrowings under FTX's bank credit facility.
- The related tax impact, using statutory income tax rates.
- The elimination of the extraordinary loss associated with the
defeasance of the 10 7/8% Debentures.
- The reduction in preferred stock dividends reflecting fewer $4.375
Preferred Stock shares outstanding, with a related increase to
FTX's average common shares outstanding.
c) MOXY Dividend - In May 1994, FTX distributed the common shares of
McMoRan Oil & Gas Co. (MOXY), a wholly owned subsidiary, to FTX's
common stockholders. The pro forma statement of income adjustments
include the elimination of the historical results attributable to the
MOXY oil and gas operations during the 1994 period prior to this
distribution. No pro forma adjustment for this transaction is
required for the first-quarter 1995 financial statements.
d) Sulphur Assets - In January 1995, Freeport-McMoRan Resource Partners,
Limited Partnership (FRP), a 51.4 percent owned subsidiary of FTX,
acquired essentially all of the domestic assets of Pennzoil Co.'s
sulphur division. The pro forma statement of income adjustments for
1994 represent the historical results of operations attributable to
the acquired assets, using FRP's purchase price for depreciation and
amortization. No pro forma adjustment for this transaction is
required for the first-quarter 1995 financial statements.
A summary of the pro forma statement of income adjustments associated
with the "other transactions" follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1994
------------------------------------------------------------
Debt and
FCX Preferred Stock
Stock Restructuring MOXY Sulphur
Sales Dividend Assets Total
------ ------------- -------- ------- -------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Revenues $ - $ - $ (418) $62,488 $62,070
Cost of sales:
Production and delivery - - (684) 64,810 64,126
Depreciation and - - (1,895) 3,636 1,741
amortization
------ ------- ------ ------- -------
Total cost of sales - - (2,579) 68,446 65,867
Exploration expenses - - (5,427) - (5,427)
General and administrative - - (3,466) 6,047 2,581
------ ------- ------- ------- -------
Total costs and expenses - - (11,472) 74,493 63,021
------ ------- ------- ------- -------
Operating income - - 11,054 (12,005) (951)
Interest expense, net 27,114 40,345 (722) - 66,737
Other expense, net - - - 542 542
------ ------- ------- ------- -------
Income before income taxes
and minority interests 27,114 40,345 10,332 (11,463) 66,328
Provision for income taxes (9,490) (14,121) (3,616) 2,058 (25,169)
Minority interests (9,119) - - 5,582 (3,537)
------ ------- ------- ------- -------
Income before extraordinary
item 8,505 26,224 6,716 (3,823) 37,622
Extraordinary loss - 9,108 - - 9,108
------ ------- ------- ------- -------
Net income 8,505 35,332 6,716 (3,823) 46,730
Preferred dividends - 17,650 - - 17,650
------ ------- ------- ------- -------
Net income applicable to
common stock $8,505 $52,982 $ 6,716 $(3,823) $64,380
====== ======= ======= ======= =======
Change in average shares
outstanding - 31,940 - - 31,940
====== ======= ======= ======= =======
</TABLE>
Three Months Ended March 31, 1995
----------------------------------------
FCX Debt and
Stock Preferred Stock
Sales Restructuring Total
------- --------------- -------
(In Thousands)
Revenues $ - $ - $ -
Cost of sales:
Production and delivery - - -
Depreciation and amortization - - -
------- ------- -------
Total cost of sales - - -
Exploration expenses - - -
General and administrative - - -
------- ------- -------
Total costs and expenses - - -
------- ------- -------
Operating income - - -
Interest expense, net 8,884 8,825 17,709
Other expense, net - - -
------- ------- -------
Income before income taxes
and minority interests 8,884 8,825 17,709
Provision for income taxes (3,110) (3,088) (6,198)
Minority interests (5,112) - (5,112)
------- ------- -------
Net income 662 5,737 6,399
Preferred dividends - 4,373 4,373
------- ------- -------
Net income applicable to
common stock $ 662 $10,110 $10,772
======= ======= =======
Change in average shares
outstanding - 31,347 31,347
======= ======= =======
As of March 31, 1995
-------------------------------------
Debt and
FCX Preferred
Stock Stock
Sales Restructuring Total
-------- ------------- --------
(In Thousands)
Cash and short-term investments $ - $ - $ -
Accounts receivable - - -
Inventories - - -
Prepaid expenses and other - - -
-------- ------- --------
Total current assets - - -
Property, plant and
equipment, net - - -
Other assets (67,046) (8,217) (75,263)
-------- ------- --------
Total assets $(67,046) $(8,217) $(75,263)
======== ======= ========
Accounts payable and accrued
liabilities $ 27,000 $(5,158) $ 21,842
Current portion of long-term debt
and short-term borrowings - - -
-------- ------- -------
Total current liabilities 27,000 (5,158) 21,842
Long-term debt, less
current portion (500,160) (304,584) (804,744)
Reclamation and mine
shutdown reserves - - -
Accrued postretirement
benefits and other liabilities - - -
Deferred income taxes 76,018 (1,502) 74,516
Minority interests in consolidated
subsidiaries 47,862 - 47,862
Stockholders' equity (deficit) 282,234 303,027 585,261
-------- ------- --------
Total liabilities and
stockholders' equity $(67,046) $(8,217) $(75,263)
======== ======= ========
Exhibit Index
-------------
Sequentially
Numbered
Number Exhibit Page
- ------ ------- ------------
99.1 News Release dated July 5, 1995.
99.2 News Release dated July 11, 1995.
Exhibit 99.1
FREEPORT-McMoRan INC. ANNOUNCES:
- SPECIAL DIVIDEND OF FREEPORT-McMoRan COPPER & GOLD INC. CLASS B
COMMON SHARES TO FREEPORT-McMoRan INC. COMMON SHAREHOLDERS
- RESULTS OF REDEMPTIONS AND CONVERSIONS OF 6.55% CONVERTIBLE
SUBORDINATED NOTES DUE JANUARY 15, 2001
NEW ORLEANS, LA., July 5, 1995 -- Freeport-McMoRan Inc. (NYSE:FTX)
announced today that its Board of Directors has declared a special tax-free
dividend whereby all of the 117,909,323 Class B common shares of Freeport-
McMoRan Copper & Gold Inc. (FCX) owned by FTX will be distributed to holders
of FTX common stock of record at the close of business on July 17, 1995. At
July 3, 1995, there were approximately 167.9 million FTX common shares
outstanding and the dividend distribution ratio will be approximately 0.702 of
a share of FCX Class B common stock for each common share of FTX. The FCX
Class B stock certificates are expected to be mailed on July 28, 1995 to FTX
common shareholders. This special tax-free dividend completes FTX's
restructuring transaction announced May 3, 1994.
Fractional shares of FCX Class B common stock will not be issued in
connection with this distribution. Each FTX shareholder entitled to receive a
fractional share of FCX Class B common stock will receive cash in lieu of the
fractional share. All fractional shares will be aggregated and sold by the
distribution agent, Mellon Securities Trust Company, after the record date in
an orderly manner through either a single or multiple transactions in the
public market. No action on the part of FTX shareholders is necessary.
FTX also announced today the results of the redemption of its 6.55%
Convertible Subordinated Notes due January 15, 2001 (Notes). Of the
approximately $373 million principal amount of the Notes outstanding at the
time of the call, approximately $16.4 million principal amount were redeemed
for $15.0 million cash on June 30, 1995. The remaining approximately $356.6
million principal amount of the Notes were converted into 19.9 million shares
of FTX common stock and are included in the approximately 167.9 million FTX
common shares outstanding on July 3, 1995 entitled to receive the distribution
of FCX Class B common shares by FTX.
As previously announced, The RTZ Corporation PLC (RTZ) committed to
purchase certain additional FCX Class A common stock from FTX equal to the
funding requirements for the redemption of the Notes and had an option to
purchase an additional 3.5 million shares of FCX Class A common stock. In
satisfaction and cancellation of this commitment and option, FTX is selling
today 2.4 million shares of FCX Class A common stock to RTZ for approximately
$50 million ($20.90 per share). FTX will use the proceeds for general
corporate purposes including the repayment of its bank debt.
It is expected that "when issued" trading of the FCX Class B common
stock and "ex-distribution when issued" trading of FTX common stock (without
the right to receive the FCX Class B special dividend) will commence no later
than July 13, 1995. Furthermore, it is expected that FTX will begin trading
with a "due bill", representing the right to receive FCX Class B shares
pursuant to this distribution, on July 13, 1995.
FCX has 84,680,708 Class A shares outstanding including all Class A
shares sold to RTZ. Since the company's inception, the Class A shares have
been traded on the New York Stock Exchange (NYSE) under the symbol "FCX". The
only difference between the FCX Class A shares and the Class B shares being
distributed relates to voting rights with regard to the election of Directors,
as approved by the FCX Class A shareholders in March 1995. FCX Class B common
shareholders will have the right to elect 80 percent of the members of the
Board of Directors and FCX Class A common shareholders and preferred
shareholders, voting together as a single class, will elect the balance.
Consistent with NYSE convention, the trading symbol for FCX Class A
shares will change to "FCX.A" when FCX Class B common shares begin trading on
the NYSE on a "when issued" basis. FCX Class B shares will initiate trading
on the NYSE under the symbol FCX.B. Subsequently, FCX may consider changing
the trading symbol for the FCX Class B common shares to "FCX". Termination
of "when issued" trading in the FCX Class B common shares, "ex-distribution
when issued" trading of FTX common stock and trading of FTX with a "due bill"
is expected to occur at the close of business on July 28, 1995. The FTX
common stock and FCX Class B common stock are expected to begin trading on a
"regular way" basis on July 31, 1995.
As a result of this special dividend, FTX will no longer own any
interest in FCX and FTX's business activity will essentially consist of the
company's approximate 51 percent ownership in its agricultural minerals
affiliate, Freeport-McMoRan Resource Partners, Limited Partnership (NYSE:FRP).
Subsequent to the distribution of FCX Class B common shares to FTX
shareholders, the FTX Board of Directors will determine the appropriate uses
of FTX cash flow. Alternative uses of cash could include the establishment of
a new dividend policy for FTX, the purchase of FTX shares, the purchase of FRP
units and/or growth activities.
Mr. James R. Moffett, Chairman and CEO of FTX, said: "With the steps
being announced today, FTX's restructuring initiated over a year ago is now
complete. The separation of the copper/gold and agricultural minerals
businesses into independent financial and operating entities provides a
focused structure for these two world-class operations. We are excited about
this new beginning and will continue to move forward with great momentum to
enhance and grow our low cost operations."
Exhibit 99.2
FREEPORT-McMoRan INC. AND FREEPORT-McMoRan COPPER & GOLD INC. ANNOUNCE
PRELIMINARY SECOND QUARTER FINANCIAL AND OPERATIONAL RESULTS
NEW ORLEANS, LA., July 11, 1995 -- With the previously announced
completion of restructuring activities, Freeport-McMoRan Inc. (FTX) and
Freeport-McMoRan Copper & Gold Inc. (FCX) today announced preliminary
financial and operational results for the second quarter of 1995.
In this connection, FCX announced that, based on review of preliminary
second quarter financial and operating data, its financial results are
expected to approximate securities analysts' consensus earnings estimates of
$0.20 per share. FCX's second quarter preliminary financial results are based
on mine and mill operating levels at P.T. Freeport Indonesia Company (PT-FI),
FCX's Indonesian mining affiliate, of approximately 113,000 metric tons of ore
per day (MTPD). The mine/mill expansion project is now substantially complete
and achieved an average throughput rate of approximately 119,000 MTPD during
June. For approximately half of the second quarter, FCX's Spanish copper
smelter operated by its subsidiary, Rio Tinto Minera S.A. (RTM), was shutdown
to tie-in expansion equipment and for maintenance turnarounds which
contributed to a loss for the quarter for RTM. Expansion activities are
progressing at RTM as is the feasibility study for the development of FCX's
Indonesian copper smelter/refinery complex. FCX also sold in two transactions
certain of its power generation and aviation assets for approximately $148
million which was used to reduce debt.
FTX announced that its second quarter financial results will reflect its
ownership of FCX and its approximate 51 percent ownership of Freeport-McMoRan
Resource Partners, Limited Partnership (FRP), the substantial gain resulting
from the May 12, 1995 sale of FCX Class A common shares to The RTZ Corporation
PLC (RTZ), and charges resulting from FTX's redemption/conversions of debt
securities and the exchange of common stock for its preferred stock. Because
FTX is distributing its ownership in FCX to its shareholders of record on July
17, 1995, FTX's share of FCX financial results will be reflected as
discontinued operations. Based on the company's review of preliminary
financial data, FTX estimates that second quarter earnings will approximate
$1.80 per share including approximately $0.05 per share income from ongoing
operations, $0.65 per share income from discontinued operations, $1.65 per
share gain on the May 12, 1995 sale of FCX stock to RTZ and $0.55 per share
charges to earnings associated with the redemption/conversions of debt
securities and the exchange of common stock for FTX's preferred stock.
FTX's second quarter preliminary ongoing financial results primarily
reflect its agricultural minerals operations. FTX expects to report lower
phosphate fertilizer production levels than in the first quarter because of
the temporary closure of one facility and maintenance turnarounds at three
other facilities. Foreign demand for phosphate products has remained strong
while domestic demand has slackened due to wet conditions in the farm belt.
Also, phosphate fertilizer per unit costs were slightly higher than in the
first quarter primarily because of higher raw material costs for ammonia and
increased maintenance costs. Furthermore, sulphur production at the Main Pass
and Culberson mines and oil revenues at Main Pass continued at levels
consistent with that of the first quarter. During the second half of 1995,
FTX expects to benefit from a substantial phosphate product sales agreement
reached by the export marketing association of FRP's joint venture operating
company, IMC-Agrico Company, and Sinochem, the purchasing organization in
China.
Attached is selected unaudited pro forma financial information for FTX
as of December 31, 1994 and March 31, 1995 reflecting the distribution of FCX
Class B common shares to FTX shareholders and related transactions leading up
to the distribution.
FREEPORT-McMoRan Inc.
SELECTED FINANCIAL INFORMATION
The following selected unaudited pro forma financial information was prepared
assuming 1) the spin-off of FCX Class B shares to FTX common shareholders, 2)
the sales of FCX Class A shares to RTZ, 3) the debt and preferred stock
restructuring, 4) the Pennzoil transaction and 5) the MOXY spin-off occurred
on January 1, 1994 for the income statement information and on March 31,1995,
if not already reflected,for the balance sheet information,as detailed further
in FTX's Form 8-K filed on July 11, 1995. The pro forma financial information
is not necessarily indicative of the actual results that would have been
achieved nor is it indicative of future results.
HISTORICAL
AS PRESENTED PRO FORMA
------------ ---------
(In Thousands,
Except Per Share Amounts)
YEAR ENDED DECEMBER 31, 1994
Income statement data:
Revenues $1,982,396 $832,182
Operating income 370,836 90,953
Income before income taxes and minority
interests 389,922 63,610
Net income (loss) applicable to common
stock 41,443 (7,906)
Net income (loss) per primary share 0.30 (0.05)
Average common shares outstanding 139,223 171,163
THREE MONTHS ENDED MARCH 31, 1995
Income statement data:
Revenues $663,285 $254,479
Operating income 171,369 49,874
Income before income taxes and minority
interests 145,727 42,659
Net income applicable to common stock 19,391 6,468
Net income per primary share 0.14 0.04
Average common shares outstanding 137,326 168,673
Balance sheet data (as of March 31, 1995):
Property, plant and equipment, net $3,581,421 $1,005,669
Long-term debt, including current
borrowings 1,865,128 385,381
Minority interests' ownership of
subsidiaries equity 1,515,781 217,516
Stockholders' equity (256,543) 96,004
Total assets 4,606,035 1,298,601 <PAGE>
