SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 1994
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
Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Savings Plan for Hourly-Rated Employees of
Magma Copper Company, Magma Metals Company,
San Manuel Arizona Railroad Company
and Magma Arizona Railroad Company
Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Magma Copper Company
7400 North Oracle Road, Suite 200
Tucson, Arizona 85704
<PAGE>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY,
MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1994 AND 1993
(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>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1994 AND 1993
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits
as of December 31, 1994 and 1993
Statement of Changes in Net Assets Available for
Plan Benefits for the year ended December 31, 1994
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES
I Item 27a - Schedule of Assets Held for Investment Purposes as
of December 31, 1994
II Item 27d - Schedule of Reportable Transactions for the year
ended December 31, 1994
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administration Committee of the
Savings Plan For Hourly-Rated Employees
of Magma Copper Company, Magma Metals Company,
San Manuel Railroad Company and
Magma Arizona Railroad Company:
We have audited the accompanying statements of net assets available
for plan benefits of the SAVINGS PLAN FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY, SAN MANUEL RAILROAD
COMPANY AND MAGMA ARIZONA RAILROAD COMPANY as of December 31, 1994
and 1993, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1994.
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 SAVINGS PLAN FOR HOURLY-RATED EMPLOYEES OF MAGMA
COPPER COMPANY, MAGMA METALS COMPANY, SAN MANUEL RAILROAD COMPANY
AND MAGMA ARIZONA RAILROAD COMPANY as of December 31, 1994 and 1993,
and the changes in net assets available for plan benefits for the
year ended December 31, 1994, 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 LLP
Tucson, Arizona,
June 16, 1995.
<PAGE>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
----------- ------------
<S> <C> <C>
INVESTMENT FUNDS, at market value
(Notes 1 and 2):
Retirement Preservation Trust $ 5,814,068 $ 4,502,744
Capital Fund 5,264,496 4,249,721
Federal Securities Trust 3,529,134 2,903,372
Phoenix Fund 1,328,945 872,233
Basic Value Fund 868,739 609,514
Global Allocation Fund 229,111 90,330
---------- ----------
17,034,493 13,227,914
COMPANY STOCK, at market value 311,466 81,804
PARTICIPANT LOANS 1,401,256 936,985
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $18,747,215 $14,246,703
========== ==========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS FOR THE
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Retirement Federal
Preservation Capital Securities
Trust Fund Trust
------------ ---------- ----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income -
Interest and dividends $ 318,868 $ 471,250 $ 208,555
Realized gain (loss) on
sale of assets -- (10,925) (27,965)
Unrealized gain (loss)on
assets -- (405,048) (287,688)
--------- --------- ---------
Total investment income 318,868 55,277 (107,098)
--------- --------- ---------
Contributions (Note 1)
Employee 1,384,853 1,413,340 669,089
Employer 212,179 147,663 560,031
--------- --------- ---------
Total Contributions 1,597,032 1,561,003 1,229,120
--------- --------- ---------
Total additions 1,915,900 1,616,280 1,122,022
--------- --------- ---------
Transfers to/(from)
investment options
including participant
loan transactions (279,375) (378,685) (219,265)
--------- --------- ----------
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (325,201) (222,820) (276,995)
--------- --------- ---------
Net increase (decrease) 1,311,324 1,014,775 625,762
NET ASSETS, beginning
of year 4,502,744 4,249,721 2,903,372
--------- --------- ---------
NET ASSETS, end of year $ 5,814,068 $5,264,496 $3,529,134
========= ========= =========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS FOR THE
YEAR ENDED DECEMBER 31, 1994
<CAPTION>
Basic Global
Phoenix Value Allocation
Fund Fund Fund
------------ ---------- ----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income -
Interest and dividends $ 158,667 $ 53,823 $ 13,493
Realized gain (loss) on
sale of assets (12,040) (359) (620)
Unrealized gain (loss) on
assets, (232,379) (37,837) (17,966)
--------- --------- --------
Total investment income (85,752) 15,627 (5,093)
--------- --------- --------
Contributions (Note 1)
Employee 441,576 278,664 80,328
Employer -- -- --
--------- --------- --------
Total contributions 441,576 278,664 80,328
--------- --------- --------
Total additions 355,824 294,291 75,235
--------- --------- --------
Transfers to/(from)
investment options
including participant
loan transactions 134,167 (18,449) 63,778
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (33,279) (16,617) (232)
--------- --------- --------
Net increase (decrease) 456,712 259,225 138,781
NET ASSETS, beginning
of year 872,233 609,514 90,330
--------- --------- --------
NET ASSETS, end of year $1,328,945 $ 868,739 $ 229,111
========= ========= ========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS FOR THE
YEAR ENDED DECEMBER 31, 1994
<CAPTION>
Company Participant
Stock Loans Totals
------------ ---------- -----------
<S> <C> <C> <C>
Investment income -
Interest and dividends $ 905 $ -- $ 1,225,561
Realized gain (loss) on
sale of assets 14,994 -- (36,915)
Unrealized gain (loss)on
assets 19,393 -- (961,525)
---------- --------- ----------
Total investment income 35,292 -- 227,121
---------- --------- ----------
Contributions (Note 1)
Employee 33,750 -- 4,301,600
Employer -- -- 919,873
--------- --------- ----------
33,750 -- 5,221,473
---------- --------- ----------
Total additions 69,042 -- 5,448,594
---------- --------- ----------
Transfers to/(from)
investment options
including participant
loan transactions 166,558 531,271 --
---------- --------- ---------
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (5,938) (67,000) (948,082)
---------- --------- ----------
Net increase (decrease) 229,662 464,271 4,500,512
NET ASSETS, beginning
of year 81,804 936,985 14,246,703
---------- --------- -----------
NET ASSETS, end of year $ 311,466 $1,401,256 $18,747,215
========== ========= ===========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1994 AND 1993
(1) DESCRIPTION OF PLAN:
The following description of the Savings Plan for Hourly-Rated Employees of
Magma Copper Company, Magma Metals Company, San Manuel Railroad Company and
Magma Arizona Railroad 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 January 1, 1987 by Magma Copper Company (the
Company) and 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 14, 1988, and was
most recently restated in accordance with the Tax Reform Act of 1986. The Plan
administrator has filed a request for a new determination letter, however, no
response has been received to date. 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 Internal Revenue Code of
1986, as amended (the "Code"). Therefore, they believe that the Plan was
qualified and the related trust was tax-exempt as of the financial statement
date.
Trust
The assets of the Plan are held by 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.
Eligibility, Contributions and Vesting
Hourly-rated employees are eligible to participate in the Plan
after having completed sixty (60) working days from the date of
employment with the Company. Participants can elect to contribute
up to 12 percent of their annual compensation to the Plan.
Participants may also elect to have all or a portion of their
quarterly bonus credited to their account. Participants'
contributions and deferred bonus contributions are fully vested at
all times.
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 contribution
limitation.
The annual Company contribution amount depends on the age of the
employee, with contributions ranging from $100 to $8,000 per
employee. No further employer contributions shall be made on
behalf of a participant after the Company has contributed $8,000
cumulatively. Company contributions vest in accordance with the
following schedule. Continuous service begins on the employee's
date of hire.
Months of
Continuous Service Vesting %
0-35 0%
36-47 40%
48-59 60%
60 or more 100%
Each participant's account is credited with the participant's
contribution and an allocation of Plan earnings on a monthly basis.
Allocations are based on participant account balances.
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. Cost equals market value as income is declared and
reinvested each day.
Capital Fund
Investments 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
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.
Phoenix Fund
Investments 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
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.
Company Stock
Beginning in July 1993, participants could also elect to
invest in common stock of the Company.
Forfeitures
Forfeitures of terminated participants and nonvested 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 Company contributions.
Upon re-employment of a former participant, any forfeitures of
nonvested 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.
(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, 1994
and 1993. 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. If the Plan were
terminated, all benefits would become payable to the participants
after the payment of expenses incurred before the termination date.
(4) 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, 1994.
(5) RECONCILIATION TO FORM 5500:
Distributions payable to participants are recorded as part of net
assets available for plan benefits and totaled $53,327 and $104,946
as of December 31, 1994 and 1993, 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.
(6) VOLUNTARY COMPLIANCE RESOLUTION PROGRAM:
The Company has identified certain operational defects with respect
to the Plan and has filed an application for relief pursuant to
Revenue Procedures 92-89, as modified by Revenue Procedure 93-36.
A method of correction for each defect has been implemented which
has not had a material effect on net assets of the Plan. The
Company has requested the Internal Revenue Service to issue a
compliance statement under the Voluntary Compliance Resolution
(VCR) Program for these defects.
<PAGE>
<TABLE>
SCHEDULE I
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
EIN #86-0219794
ITEM 27a - SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
AS OF DECEMBER 31 1994
<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 5,814,068 N/A $ 5,814,068 $5,814,068
Merrill Lynch
Capital Fund
Class A shares N/A 204,844 N/A 5,514,868 5,264,496
Merrill Lynch
Federal
Securities
Trust Class A
shares N/A 388,671 N/A 3,799,018 3,529,134
Merrill Lynch
Phoenix Fund
Class A shares N/A 119,187 N/A 1,503,719 1,328,945
Merrill Lynch
Basic Value
Fund Class A
shares N/A 38,869 N/A 863,057 868,739
Merrill Lynch
Global
Allocation
Fund Class A
shares N/A 18,733 N/A 246,594 229,111
---------- ----------
$17,741,324 $17,034,493
========== ==========
Magma Common stock N/A 18,594 N/A $ 258,787 $ 311,466
Copper ========== ==========
Company
Partici- Participant
pants loans secured
by vested
benefits 11/30/95* 1,401,256 6-10.5% $ 1,401,256 $ 1,401,256
---------- ----------
* 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
SAVINGS PLAN
FOR HOURLY-RATED EMPLOYEES OF
MAGMA COPPER COMPANY, MAGMA METALS COMPANY,
SAN MANUEL RAILROAD COMPANY AND
MAGMA ARIZONA RAILROAD COMPANY
EIN#86-0219794
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
The following Schedules of Reportable Transactions of the Plan have been taken
directly from the annual trustee report 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
Hourly Rated Employee Savings Plan
Consolidation
For the Period 1/1/94 - 12/31/94
<CAPTION>
No.
Tran Security of Shares Cost/Book
Type Description Trans Par Value Value
- ---- --------------- ----- ------------ -------------
<S> <C> <C> <C> <C>
Opening Balance 14,246,704.42
------------
MUTUAL FUNDS
------------
Buy ML Phoenix Fund
CL A 127 76,838.88 991,142.81
Sell ML Phoenix Fund
CL A 73 22,501.07 286,852.96
Buy ML Fed Securities
Trust CL A 122 166,438.60 1,596,549.36
Sell ML Fed Securities
Trust CL A 151 67,903.97 670,544.49
Buy ML Capital Fund
Class A 119 87,183.79 2,378,244.31
Sell ML Capital Fund
Class A 145 33,322.12 901,666.11
------------
MONEY MARKET
------------
Buy ML Ret Preservation
Trust 176 2,310,438.11 2,310,438.11
Sell ML Ret Preservation
Trust 132 1,005,991.62 1,005,991.62
</TABLE>
<PAGE>
<TABLE>
Merrill Lynch
Schedule of Transactions in Excess of 5%
Magma Copper Company
Salaried Employee Savings Plan
Consolidation
For the Period 1/1/94 - 12/31/94
<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 290,011.87 3,158.91
Buy ML Fed Securities
Trust CL A 0.00 0.00
Sell ML Fed Securities
Trust CL A 647,708.54 (22,835.95)
Buy ML Capital Fund
Class A 0.00 0.00
Sell ML Capital Fund
Class A 920,724.00 19,057.89
------------
MONEY MARKET
------------
Buy ML Ret Preservation
Trust 0.00 0.00
Sell ML Ret Preservation
Trust 1,005,993.62 0.00
</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 28, 1995 /s/ Douglas J. Purdom
-------------------------
Douglas J. Purdom
On behalf of the Administration
Committee, Administrator of the
Employees Savings Plan for Hourly-
rated employees of Magma Copper
Company, Magma Metals Company, San
Manuel Arizona Railroad Company
and Magma Arizona Railroad
Company.
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Page or
Number Description Method of Filing
- ------- ------------------ ----------------
<S><C> <C> <C>
23 Consent of Accountants File herewith
</TABLE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report dated June 16, 1995,
included with this Form 11-K for the year ended December 31, 1994,
relating to the Savings Plan for Hourly-Rated Employees of Magma
Copper Company, Magma Metals Company, San Manuel, Railroad Company
and Magma Arizona Railroad Company, into the Company s previously
filed Registration Statement No. 33-66498 (Savings Plan for Hourly-
Rated Employees).
ARTHUR ANDERSEN LLP
Tucson, Arizona,
June 16, 1995.
