SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the plan year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ___________________
Commission File Number 0-10122
Employees Savings Plan
(Full title of the plan and the address of the plan, if different from that
of the issuer named below)
Magma Copper Company
7400 North Oracle Road, Suite 200
Tucson, Arizona 85704
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
<PAGE>
MAGMA COPPER COMPANY
EMPLOYEES SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1993 AND 1992
(prepared in accordance with the financial reporting
requirements of the Employee Retirement Income
Security Act of 1974, as amended),
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1993 AND 1992
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1993 AND 1992
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits
as of December 31, 1993 and 1992
Statement of Changes in Net Assets Available for
Plan Benefits for the year ended December 31, 1993
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES
I. Item 27a - Schedule of Assets Held for Investment Purposes as of
December 31, 1993
II. Item 27d - Schedule of Reportable Transactions for the year ended
December 31, 1993
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administration Committee of the
Employee Savings Plan of Magma Copper Company:
We have audited the accompanying statements of net assets available for
plan benefits of the EMPLOYEE SAVINGS PLAN OF MAGMA COPPER COMPANY as of
December 31, 1993 and 1992, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1993.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
EMPLOYEE SAVINGS PLAN OF MAGMA COPPER COMPANY as of December 31, 1993 and
1992, and the changes in net assets available for plan benefits for the
year ended December 31, 1993, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable transactions are
presented for the purpose of additional analysis and are not a required
part of the basic financial statements but are supplementary information
required by the Department of Labor Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Tucson, Arizona,
May 17, 1994.
<PAGE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
1993 1992
----------- ------------
<S> <C> <C>
INVESTMENT FUNDS, at market value
(Notes 1 and 2):
Retirement Preservation Trust $ 9,535,181 $ --
Capital Fund 7,906,821 6,099,795
Federal Securities Trust 1,408,072 856,101
Phoenix Fund 1,303,978 406,147
Basic Value Fund 1,127,665 471,122
Global Allocation Fund 573,661 --
Ready Assets Trust -- 9,277,371
---------- ----------
21,855,378 17,110,536
COMPANY STOCK 154,755 88,515
PARTICIPANT LOANS 959,328 793,223
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $22,969,461 $17,992,274
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Retirement Federal
Preservation Capital Securities
Trust Fund Trust
------------ ---------- ----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income -
Interest and dividends $ 243,322 $ 531,005 $ 69,527
Realized gain on sale
of assets -- 59,961 3,865
Unrealized gain on
assets -- 340,126 10,544
--------- --------- ---------
243,322 931,092 83,936
--------- --------- ---------
Contributions (Note 1)
Employee 513,491 1,134,390 286,751
Employer 179,452 360,522 82,213
--------- --------- ---------
692,943 1,494,912 368,964
--------- --------- ---------
Total additions 936,265 2,426,004 452,900
--------- --------- ---------
Transfers to/(from)
investment options
including participant
loan transactions 8,909,300 (447,592) 176,228
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (310,384) (171,386) (77,157)
--------- --------- ---------
Net increase (decrease) 9,535,181 1,807,026 551,971
NET ASSETS, beginning
of year -- 6,099,795 856,101
--------- --------- ---------
NET ASSETS, end of year $9,535,181 $7,906,821 $1,408,072
========= ========= =========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Basic Global
Phoenix Value Allocation
Fund Fund Fund
------------ ---------- ----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income -
Interest and dividends $ 133,616 $ 60,233 $ 19,890
Realized gain on sale
of assets 6,294 5,750 294
Unrealized gain on
assets 60,335 78,372 4,268
--------- --------- -------
200,245 144,355 24,452
--------- --------- -------
Contributions (Note 1)
Employee 211,191 217,778 27,470
Employer 70,505 73,665 8,557
--------- --------- -------
281,696 291,443 36,027
--------- --------- -------
Total additions 481,941 435,798 60,479
--------- --------- -------
Transfers to/(from)
investment options
including participant
loan transactions 436,777 229,758 513,269
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (20,887) (9,013) (87)
--------- --------- -------
Net increase (decrease) 897,831 656,543 573,661
NET ASSETS, beginning
of year 406,147 471,122 --
--------- --------- -------
NET ASSETS, end of year $1,303,978 $1,127,665 $573,661
========= ========= =======
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Ready
Assets Company Participant
Trust Stock Loans Totals
------------ ---------- ----------- --------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income -
Interest and dividends $ 163,026 $ 61 $ -- $ 1,220,680
Realized gain on sale
of assets -- 3,462 -- 79,626
Unrealized gain on
assets -- 17,326 -- 510,971
----------- ------- ------- ----------
163,026 20,849 -- 1,811,277
----------- ------- ------- ----------
Contributions (Note 1)
Employee 652,354 6,239 -- 3,049,664
Employer 200,532 1,915 -- 977,361
---------- ------- ------- ----------
852,886 8,154 -- 4,027,025
---------- ------- ------- ----------
Total additions 1,015,912 29,003 -- 5,838,302
---------- ------- ------- ----------
Transfers to/(from)
investment options
including participant
loan transactions (10,048,065) 39,903 190,422 --
---------- ------- ------- ----------
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (245,218) (2,666) (24,317) (861,115)
---------- ------- ------- ----------
Net increase (decrease) (9,277,371) 66,240 166,105 4,977,187
NET ASSETS, beginning
of year 9,277,371 88,515 793,223 17,992,274
---------- ------- ------- ----------
NET ASSETS, end of year $ -- $154,755 $959,328 $22,969,461
========== ======= ======= ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1993 AND 1992
(1) DESCRIPTION OF PLAN:
The following description of the Employee Savings Plan of Magma Copper
Company (the Plan) provides only general information. More complete
information regarding the Plan's provisions may be found in the plan
document.
General
The Plan was established on October 1, 1986 by Magma Copper Company (the
Company). The Plan is a defined contribution plan subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
Tax Status
The Plan obtained its latest determination letter on July 27, 1988, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code
(the Code). The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel believe
that the Plan is currently designed and being operated in compliance with
the applicable requirements of the Code. Therefore, they believe that the
Plan was qualified and the related trust was tax-exempt as of the financial
statement date.
The Plan has not been restated in accordance with the Tax Reform Act of 1986
(TRA '86); however, the Plan administrator and the Plan's tax counsel
believe the Plan, as currently designed and operated, is in compliance with
the applicable requirements of the Code. The Plan must be amended by
December 31, 1994 to comply with TRA '86. It is the Plan Administrator's
intent to do so and to request an updated tax determination letter at that
time.
Trust
The assets of the Plan are held under the MAGMA COPPER COMPANY TRUST FOR
SAVINGS PLANS (the Trust). However, the records of each Plan within the
Trust are maintained separately and certified by Merrill Lynch Trust Company
(the Trustee) as being accurate and complete as reported therein. Expenses
incurred by the Trustee in the performance of its duties, including fees for
its services, are paid by the Company.
<PAGE>
Eligibility, Contributions and Vesting
Salaried employees are eligible to participate in the Plan after six months
of continuous service. Participants may elect to contribute up to 12
percent of their annual compensation to the Plan. A participant's
contribution is matched by the Company (Company's contribution) in an amount
equal to 50 percent of the contribution made by the participant, not to
exceed 3 percent of the participant's compensation for that month. Total
matching contributions are limited to $9,000 annually per participant.
Participants' contributions are fully vested. Participants vest in
Company's contribution at 20 percent for each year of participation in the
Plan. Participants may become fully vested in the matching Company
contributions under certain other circumstances, including Plan termination
or five years or more of service to the Company.
The Plan provides that the Trustee may accept from a participant a
contribution representing distributions from another plan which meets the
requirements of Section 401(a) of the Code. Such "rollover contributions"
shall be fully vested and shall not be subject to, or affect in any way, the
maximum annual contribution limitation.
For both employer and employee contributions, participants elect to have
their accounts invested in various Merrill Lynch funds or in the common
stock of the Company. Company contributions to the employees' accounts will
be invested in the Federal Securities Trust unless the participant directs
otherwise. A description of each Merrill Lynch fund is as follows:
Retirement Preservation Trust
This trust invests primarily in a broadly diversified portfolio of
guaranteed investment contracts, U.S. government securities and high quality
money market funds. It seeks to provide preservation of participants'
investments and liquidity with income typically higher than money market
funds.
Capital Fund
The options in this fund are invested primarily in stock or convertible
securities of corporations. Total investment return is the aggregate of
income and capital value changes.
Federal Securities Trust
The investments in this fund include U.S. Treasury and Government agency
securities, mortgage backed securities and options and futures transactions.
This fund seeks high current return on investments.
<PAGE>
Phoenix Fund
The options in this fund are invested in a diversified portfolio of equity
and fixed income securities of issuers in weak financial condition which are
believed to be undervalued. Investment in this fund is speculative and
involves a high degree of risk and is designed for investors who do not
require current income and who can afford the accompanying risk.
Basic Value Fund
The investments in this fund consist of securities, primarily equities,
which are believed to be undervalued. Total investment return is the
aggregate of income and capital value changes.
Global Allocation Fund
This fund includes United States and foreign equity, debt and money market
securities. Total investment return is the aggregate of income and capital
value changes.
Ready Assets Trust
This fund is a money market fund and consists of short-term financial
instruments, including U.S. Treasury bills, bank certificates of deposit,
securities and commercial paper. The security of these investments rests in
the soundness of the underlying institutions.
Forfeitures
Forfeitures of terminated participants and nonvested matching Company
contributions are held by the fund for twelve months following termination.
If the terminated participant does not return to employment and active
participation within the twelve months following termination of employment,
forfeitures are used to reduce future matching Company contributions.
Upon re-employment of a former participant, any forfeitures of nonvested
matching Company contributions must be restored if the period of absence is
less than five years and the initial distribution is repaid within two years
of re-employment.
Participant Accounts
Each participant's account is credited with the participant's contribution,
matching Company contribution and an allocation of Plan earnings on a
monthly basis. Allocations are based on participant's relative account
balances within an investment option.
<PAGE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The financial statements of the Plan are prepared using the accrual method
of accounting. The Plan's investment funds are stated at market value, as
established by the Trustee at December 31, 1993 and 1992. Investments are
recorded on the trade date.
(3) PLAN TERMINATION:
Although the Company intends to continue the Plan, the Company has the right
to terminate the Plan at any time. In the event of termination of the Plan
with respect to a group or class of participants or partial discontinuance
of contributions, the balance credited to the matching Company contributions
accounts of all participants subject to such partial termination or partial
discontinuance of contributions will become fully vested and nonforfeitable.
(4) PLAN AMENDMENTS:
The Plan was amended effective July 15, 1993, to provide an additional
investment option to participants. This option consists of the common stock
of the Company. Such Company stock shall be acquired on the open market by
the Trustee.
(5) OMITTED SCHEDULES:
Based on the information provided by the Trustee, the Plan had no lease
commitments, obligations or leases in default, or party-in-interest
transactions, as defined by ERISA, during the year ended December 31, 1993.
(6) RECONCILIATION TO FORM 5500:
Prior to January 1, 1992, distributions payable to participants were
recognized as liabilities in the accompanying statements of net assets
available for plan benefits. In accordance with the AICPA Audit and
Accounting Guide, Audits of Employee Benefit Plans, these amounts were
reclassified as part of net assets available for plan benefits and totaled
$70,500 and $24,900 as of December 31, 1993 and 1992, respectively. The
Form 5500 requires that these amounts be recorded as liabilities of the
Plan. Therefore, the beginning and ending year net assets amounts and the
current year benefit payments do not agree with the audited financial
statements.
<PAGE>
<TABLE>
SCHEDULE I
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
EIN# 86-0219794
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1993
<CAPTION>
Number of
Identify Description Shares or
of Issuer, of Due Principal Market
Borrower Investments Date Amount Rate Cost Value
- - - - - --------- ------------- ---- --------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Merrill Merrill Lynch
Lynch Retirement
Trust Preservation
Company Trust N/A 9,535,181 Various $ 9,535,181 $ 9,535,181
Merrill Lynch
Capital Fund
Class A shares N/A 282,689 Various 7,253,953 7,906,821
Merrill Lynch
Federal
Securities
Trust Class A
shares N/A 141,089 Various 1,396,031 1,408,072
Merrill Lynch
Phoenix Fund
Class A shares N/A 96,950 Various 1,210,388 1,303,978
Merrill Lynch
Basic Value
Fund Class A
shares N/A 48,253 Various 1,034,604 1,127,665
Merrill Lynch
Global
Allocation
Fund Class A
shares N/A 43,361 Various 569,493 573,661
---------- ----------
$20,999,650 $21,855,378
========== ==========
Magma Common stock N/A 11,680 N/A $ 93,288 $ 154,755
Copper ========== ==========
Company
Partici- Participant
pants loans secured
by vested
benefits 11/30/95* 959,328 6-6.5% $ 959,328 $ 959,328
========== ==========
* There are several different maturity dates for the various participant
loans. This date only represents one maturity date for one
participant loan.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE>
SCHEDULE II
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
EIN# 86-0219794
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
The following Schedules of Reportable Transactions of the Plan have been
taken directly from the annual trustee reports of Merrill Lynch Trust
Company. The transactions listed are those transactions or series of
transactions in excess of 5% of the current value of beginning Plan assets.
The accompanying notes are an integral part of this schedule.
<PAGE>
<TABLE>
Merrill Lynch
Schedule of Transactions in Excess of 5%
Magma Copper Company
Salaried Employee Savings Plan
Consolidation
For the Period 1/1/93 - 12/31/93
<CAPTION>
No.
Tran Security of Shares Cost/Book
Type Description Trans Par Value Value
- - - - - ---- --------------- ----- ------------ -------------
<S> <C> <C> <C> <C>
Opening Balance 17,992,493.04
MUTUAL FUNDS
Buy ML Phoenix Fund
CL A 125 69,170.24 921,476.85
Sell ML Phoenix Fund
CL A 41 6,844.88 84,846.07
Buy ML Fed Securities
Trust CL A 108 82,444.51 824,122.87
Sell ML Fed Securities
Trust CL A 60 28,604.51 281,522.81
Buy ML Capital Fund
Class A 125 94,571.04 2,623,692.65
Sell ML Capital Fund
Class A 100 43,221.80 1,114,100.92
MONEY MARKET
Buy ML Ret Preservation
Trust 91 10,486,775.03 10,486,775.03
Sell ML Ret Preservation
Trust 57 951,871.61 951,871.68
Buy ML Ready Assets
Trust 94 1,175,423.36 1,175,423.35
Sell ML Ready Assets
Trust 66 10,452,794.61 10,452,794.61
</TABLE>
<PAGE>
<TABLE>
Merrill Lynch
Schedule of Transactions in Excess of 5%
Magma Copper Company
Salaried Employee Savings Plan
Consolidation
For the Period 1/1/93 - 12/31/93
<CAPTION>
Tran Security Proceeds Realized
Type Description of Sale Gain/Loss
- - - - - ---- --------------- ------------ -------------
<S> <C> <C> <C>
Opening Balance
MUTUAL FUNDS
Buy ML Phoenix Fund
CL A 0.00 0.00
Sell ML Phoenix Fund
CL A 90,274.90 5,428.83
Buy ML Fed Securities
Trust CL A 0.00 0.00
Sell ML Fed Securities
Trust CL A 286,526.60 5,003.79
Buy ML Capital Fund
Class A 0.00 0.00
Sell ML Capital Fund
Class A 1,208,020.91 93,919.99
MONEY MARKET
Buy ML Ret Preservation
Trust 0.00 0.00
Sell ML Ret Preservation
Trust 951,871.68 0.00
Buy ML Ready Assets
Trust 0.00 0.00
Sell ML Ready Assets
Trust 10,452,794.64 0.03
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Employees Savings Plan
DATE June 23, 1994 /s/ Douglas J. Purdom
---------------------------
Douglas J. Purdom
On behalf of the Administration
Committee, Administrator of the
Employees Savings Plan of Magma
Copper Company
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we herby consent to the
incorporation by reference of our report dated May 17, 1994 included
with this Form 11-K for the year ended December 31, 1993, relating to the
Employee Savings Plan of Magma Copper Company, into the Company's
previously filed Registration Statement No. 33-66500 (Employee Savings
Plan).
ARTHUR ANDERSEN & CO.
Tucson, Arizona,
June 22, 1994.
