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:
Employees Savings Plan
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>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER 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>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER 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
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, 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 EMPLOYEE SAVINGS PLAN OF MAGMA COPPER 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>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
STATEMENTS 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 $11,523,243 $ 9,535,181
Capital Fund 8,293,301 7,906,821
Federal Securities Trust 1,222,885 1,408,072
Phoenix Fund 1,677,514 1,303,978
Basic Value Fund 1,453,152 1,127,665
Global Allocation Fund 1,079,282 573,661
---------- ----------
25,249,377 21,855,378
COMPANY STOCK 571,962 154,755
PARTICIPANT LOANS 1,113,009 959,328
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $26,934,348 $22,969,461
========== ==========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER 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 $ 639,210 $ 760,056 $ 77,699
Realized gain (loss) on
sale of assets, net -- (11,183) (34,696)
Unrealized gain (loss)on
assets, net -- (647,103) (92,047)
--------- --------- ---------
Total Investment income 639,210 101,770 (49,044)
--------- --------- ---------
Contributions (Note 1)
Employee 1,219,044 1,058,026 294,426
Employer 339,887 331,070 80,657
--------- --------- ---------
Total Contributions 1,558,931 1,389,096 375,083
--------- --------- ---------
Total additions 2,198,141 1,490,866 326,039
--------- --------- ---------
Transfers to/(from)
investment options
including participant
loan transactions 401,405 (638,378) (445,398)
--------- --------- ----------
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (611,484) (466,008) (65,828)
--------- --------- ---------
Net increase (decrease) 1,988,062 386,480 (185,187)
NET ASSETS, beginning
of year 9,535,181 7,906,821 1,408,072
--------- --------- ---------
NET ASSETS, end of year $11,523,243 $8,293,301 $1,222,885
========= ========= =========
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, 1994
<CAPTION>
Basic Global
Phoenix Value Allocation
Fund Fund Fund
------------ ---------- ----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Investment income -
Interest and dividends $ 203,168 $ 92,307 $ 61,675
Realized gain (loss) on
sale of assets, net (13,979) (4,893) (936)
Unrealized gain (loss) on
assets, net (293,445) (61,263) (85,621)
--------- --------- ---------
Total investment income (104,256) 26,151 (24,882)
--------- --------- ---------
Contributions (Note 1)
Employee 425,361 312,079 202,046
Employer 115,115 94,182 49,316
--------- --------- ---------
Total contributions 540,476 406,261 251,362
--------- --------- ---------
Total additions 436,220 432,412 226,480
--------- --------- ---------
Transfers to/(from)
investment options
including participant
loan transactions (1,722) (69,941) 290,126
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (60,962) (36,984) (10,985)
--------- --------- ---------
Net increase (decrease) 373,536 325,487 505,621
NET ASSETS, beginning
of year 1,303,978 1,127,665 573,661
--------- --------- ---------
NET ASSETS, end of year $1,677,514 $1,453,152 $1,079,282
========= ========= =========
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, 1994
<CAPTION>
Company Participant
Stock Loans Totals
------------ ---------- -----------
<S> <C> <C> <C>
Investment income -
Interest and dividends $ 1,227 $ -- $ 1,835,342
Realized gain (loss) on
sale of assets, net 25,681 -- (40,006)
Unrealized gain (loss)on
assets, net 41,049 -- (1,135,430)
---------- --------- ----------
Total investment income 67,957 -- 656,906
---------- --------- ----------
Contributions (Note 1)
Employee 50,540 -- 3,561,522
Employer 14,961 -- 1,025,188
--------- --------- ----------
65,501 -- 4,586,710
---------- --------- ----------
Total additions 133,458 -- 5,243,616
---------- --------- ----------
Transfers to/(from)
investment options
including participant
loan transactions 284,995 178,913 --
---------- --------- ---------
DEDUCTIONS FROM NET ASSETS:
Distributions to
participants (1,246) (25,232) (1,278,729)
---------- --------- ----------
Net increase (decrease) 417,207 153,681 3,964,887
NET ASSETS, beginning
of year 154,755 959,328 22,969,461
---------- --------- -----------
NET ASSETS, end of year $ 571,962 $1,113,009 $26,934,348
========== ========= ===========
The accompanying notes are an integral part of this statement.
</TABLE>
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER COMPANY
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1994 AND 1993
(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, 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 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.
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 the
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. 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 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 the participant's relative account balance
within an investment option.
(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. 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) OMITTED SCHEDULES:
Based on the information provided by the Trustee, the Plan had no lease
commitments, obligations or leases in default, or prohibited 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 $151,916 and $70,500 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 asset 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
EMPLOYEE SAVINGS PLAN OF
MAGMA COPPER 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 11,523,243 N/A $11,523,243 $11,523,243
Merrill Lynch
Capital Fund
Class A shares N/A 322,697 N/A 8,390,338 8,293,301
Merrill Lynch
Federal
Securities
Trust Class A
shares N/A 134,679 N/A 1,306,122 1,222,885
Merrill Lynch
Phoenix Fund
Class A shares N/A 150,449 N/A 1,900,223 1,677,514
Merrill Lynch
Basic Value
Fund Class A
shares N/A 65,018 N/A 1,439,595 1,453,152
Merrill Lynch
Global
Allocation
Fund Class A
shares N/A 88,249 N/A 1,161,003 1,079,282
---------- ----------
$25,720,524 $25,249,377
========== ==========
Magma Common stock N/A 34,147 N/A $ 473,082 $ 571,962
Copper ========== ==========
Company
Partici- Participant
pants loans secured
by vested
benefits 11/30/95* 1,113,009 6-10.5% $ 1,113,009 $ 1,113,009
---------- ----------
* 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, 1994
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 1/1/94 - 12/31/94
<CAPTION>
No.
Tran Security of Shares Cost/Book
Type Description Trans Par Value Value
- ---- --------------- ----- ------------ -------------
<S> <C> <C> <C> <C>
Opening Balance 22,969,461.42
------------
MUTUAL FUNDS
------------
Buy ML Phoenix Fund
CL A 114 84,602,24 1,083,499.03
Sell ML Phoenix Fund
CL A 81 29,507.55 375,564.86
Buy ML Fed Securities
Trust CL A 107 58,591.06 552,200.16
Sell ML Fed Securities
Trust CL A 77 64,555.33 637,876.87
Buy ML Capital Fund
Class A 119 97,283.80 2,633,988.41
Sell ML Capital Fund
Class A 122 49,590.61 1,298,033.79
------------
MONEY MARKET
------------
Buy ML Ret Preservation
Trust 195 3,742,038.64 3,742,038.64
Sell ML Ret Preservation
Trust 115 1,759,239.87 1,759,239.86
</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 381,129.15 5,564.29
Buy ML Fed Securities
Trust CL A 0.00 0.00
Sell ML Fed Securities
Trust CL A 606,364.31 (31,512.56)
Buy ML Capital Fund
Class A 0.00 0.00
Sell ML Capital Fund
Class A 1,374,761.73 76,727.94
------------
MONEY MARKET
------------
Buy ML Ret Preservation
Trust 0.00 0.00
Sell ML Ret Preservation
Trust 1,759,239.88 0.02
</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 of Magma
Copper Company
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Page or
Number Description Method of Filing
------- --------------------- ----------------
<S> <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 Employee Savings Plan of Magma Copper Company, into
the Company s previously filed Registration Statement No. 33-66500
(Employee Savings Plan).
ARTHUR ANDERSEN LLP
Tucson, Arizona,
June 16, 1995.
