ASARCO Incorporated
FORM 10-K/A
December 31, 1995
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
FORM 10-K/A i
ITEM 14 ii
EXHIBIT INDEX C1-C4
FORM 11-K C22-C35
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
1995 FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 1-164
ASARCO Incorporated
-------------------
(Exact name of registrant as specified in its charter)
New Jersey 13-4924440
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 Maiden Lane, New York, N. Y. 10038
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 510-2000
--------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
-----------------------------------------------------------
Name of each exchange on
Title of each class which registered
- ------------------------------- ------------------------
Common Stock, without par value New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of February 29, 1996, there were of record 42,630,720 shares of Common Stock,
without par value, outstanding, and the aggregate market value of the shares of
Common Stock (based upon the closing price of Asarco Common Stock on the New
York Stock Exchange - Composite Transactions) of ASARCO Incorporated held by
nonaffiliates was approximately $1.3 billion.
PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE:
- ------------------------------------------------------------------
Part III: Proxy statement in connection with the Annual Meeting to be held on
April 24, 1996.
Part IV: Exhibit index is on pages C1 through C4.
<PAGE>
ASARCO Incorporated and Subsidiaries
FORM 10-K/A
December 31, 1995
The undersigned registrant hereby amends the 1995 Annual Report on Form 10-K as
set forth in the pages attached hereto to add the information, financial
statements and exhibits required by Form 11-K filed with respect to the Savings
Plan of ASARCO Incorporated and Participating Subsidiaries pursuant to Rule
15d-21.
The following item has been refiled to reflect such amendments:
Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K.
As the Exhibits are considered a "discrete filing item", the Exhibits and
Exhibit Index as amended have been refiled.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
ASARCO Incorporated
By /s/ K. R. Morano
------------
K. R. Morano
Vice President and
Chief Financial Officer
Date: June 26, 1996
i
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
ii
<PAGE>
ASARCO Incorporated
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Indexed
No. Description on Page
<S> <C> <C>
3. Certificate of Incorporation and By-Laws
(a) Certificate of Incorporation - restated, filed May 4, 1970
(Filed as an Exhibit to the Company's 1980 Annual Report on
Form 10-K and incorporated herein by reference)
(b) Certificate of Amendment to the Certificate of
Incorporation effective April 23, 1975 (Filed as an Exhibit
to the Company's 1980 Annual Report on Form 10-K and
incorporated herein by reference)
(c) Certificate of Amendment of Certificate of Incorporation
executed April 14, 1981 (Filed as an Exhibit to the
Post-Effective Amendment No. 8 to Registration Statement
No. 2-47616, filed April 30, 1981 and incorporated herein
by reference)
(d) Certificate of Amendment of Restated Certificate of
Incorporation filed on May 6, 1985 (Filed as an Exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1985 and incorporated herein by reference)
(e) Certificate of Amendment of Certificate of Incorporation
filed July 21, 1986 (Filed as an Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1986 and incorporated herein by reference)
(f) Certificate of Amendment of Restated Certificate of
Incorporation, as amended filed April 22, 1987 (Filed as an
Exhibit to the Company's 1987 Annual Report on Form 10-K
and incorporated herein by reference)
(g) Statement of Cancellation filed July 31, 1987 whereby
155,000 shares of Series A Cumulative Preferred Stock and
862,500 shares of $9.00 Convertible Exchangeable Preferred
Stock were cancelled (Filed as an Exhibit to the Company's
1987 Annual Report on Form 10-K and incorporated herein by
reference)
(h) Statement of Cancellation filed November 20, 1987 whereby
1,026,900 shares of Series A Cumulative Preferred Stock
were cancelled (Filed as an Exhibit to the Company's 1987
Annual Report on Form 10-K and incorporated herein by
reference)
(i) Statement of Cancellation filed December 18, 1987 whereby
1,250,000 shares of Series B Cumulative Convertible
Preferred Stock were cancelled (Filed as an Exhibit to the
Company's 1987 Annual Report on Form 10-K and incorporated
herein by reference)
</TABLE>
C1
<PAGE>
ASARCO Incorporated
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Indexed
No. Description on Page
<S> <C> <C>
(j) Statement of Cancellation filed March 3, 1988 whereby
27,000 shares of Series A Cumulative Preferred Stock were
cancelled (Filed as an Exhibit to the Company's 1987 Annual
Report on Form 10-K and incorporated herein by reference)
(k) Certificate of Amendment of Restated Certificate of
Incorporation, as amended, filed August 7, 1989 (Filed as
an Exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1989 and incorporated herein
by reference)
(l) By-Laws as last amended on June 26, 1991
(Filed as an Exhibit to the Company's 1991 Annual Report on
Form 10-K and incorporated herein by reference.)
4. Instruments defining the rights of security holders, including
indentures
(a) There are currently various separate indentures, agreements
or similar instruments under which long-term debt of Asarco
is currently outstanding. The Registrant hereby agrees to
furnish to the Commission, upon request, a copy of any of
the instruments which define the rights of holders of
long-term debt securities. None of the outstanding
instruments represent long-term debt securities in excess
of 10% of the total assets of Asarco as of December 31,
1995
(b) Form of Rights Agreement dated as of July 26, 1989, between
the Company and First Chicago Trust Company of New York, as
Rights Agent, defining the rights of shareholders under a
July 1989 Shareholders' Rights plan and dividend
declaration (Filed as an Exhibit to the Company's report on
Form 8-K filed on July 28, 1989 and incorporated herein by
reference)
(c) Rights Agreement Amendment dated as of September 24, 1992,
between the Company and The Bank of New York, as Successor
Rights Agent under the Rights Agreement listed above (Filed
as an Exhibit to the Company's 1992 Annual Report on Form
10-K and incorporated herein by reference)
(d) Second Rights Agreement Amendment dated as of February 23,
1995, between the Company and The Bank of New York (Filed
as an Exhibit to the Company's report on Form 8-K filed on
February 24, 1995, and incorporated herein by reference)
(e) Indenture Agreement dated as of February 1, 1993 between
the Company and Bankers Trust Company, as Trustee, covering
the issuance of debt securities registered by the Company
in April 1992, not to exceed $250 million (Filed as an
Exhibit to the Company's 1992 Annual Report on form 10-K
and incorporated herein by reference)
</TABLE>
C2
<PAGE>
ASARCO Incorporated
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Indexed
No. Description on Page
<S> <C> <C>
(f) Indenture agreement dated as of October 1, 1994 between the
Company and Chemical Bank, as Trustee covering the issuance
of debt securities registered by the Company in October
1994, not to exceed $300 million (Filed as an Exhibit to
the Company's registration statement on Form S-3 filed on
October 12, 1994, and incorporated herein by reference)
10. Material Contracts
(a) Stock Option Plan as last amended on November 30, 1994
(Filed as an Exhibit to the Company's 1994 Annual Report on
Form 10-K and incorporated herein by reference)
(b) Form of Employment Agreement entered into in 1985, as
amended in March and April 1989, among the Company and
currently 12 of its executive officers, including Messrs.
R. de J. Osborne, F.R. McAllister, K.R. Morano, R.M.
Novotny and R.J. Muth (Filed as an Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1989 and incorporated herein by reference)
(c) Deferred Fee Plan for Directors, as amended through January
26, 1994 (Filed as an Exhibit to the Company's 1993 Annual
Report on Form 10-K and incorporated herein by reference)
(d) Supplemental Pension Plan for Designated Mid-Career
Officers, as amended through January 25, 1995 (Filed as an
Exhibit to the Company's 1994 Annual Report on Form 10-K
and incorporated herein by reference)
(e) Retirement Plan for Non-Employee Directors, as amended
through January 25, 1995. Effective December 31, 1995, the
Company terminated the plan for current and future
directors. (Filed as an Exhibit to the Company's 1994
Annual Report on Form 10-K and incorporated herein by
reference)
(f) Directors' Stock Award Plan, as amended through January 27,
1993 (Filed as an Exhibit to the Company's 1992 Annual
Report on Form 10-K and incorporated herein by reference)
(g) Stock Incentive Plan adopted by the Company's Shareholders
on April 25, 1990, as C9-C16 last amended on November 29,
1995 C9-C16
(h) Director's Deferred Payment Plan, effective October 25,
1995 C17-C21
11. Statement re Computation of Earnings Per Share C4
21. Subsidiaries of the Registrant C5-C8
</TABLE>
C3
<PAGE>
ASARCO Incorporated
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Indexed
No. Description on Page
<S> <C> <C>
23. Report of Independent Accountants on Financial Statement Schedules
and Consent of Independent Accountants are included on page A66 of
this Annual Report on Form 10-K.
99. Report on Form 11-K relating to the Savings Plan for Salaried
Employees of ASARCO Incorporated and Participating Subsidiaries. C22-C35
</TABLE>
Copies of exhibits may be acquired upon written request to the Treasurer and the
payment of processing and mailing costs.
C4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 11-K
------------------
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------
Commission File No. 1-164
------------------
For the fiscal year ended December 31, 1995
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
ASARCO Incorporated
180 Maiden Lane
New York, New York 10038
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Financial Statements and Schedules
December 31, 1995 and 1994
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
Report of Independent Accountants C23
Statement of Net Assets Available for
Benefits, with Fund Information at December 31, 1995 C24
Statement of Net Assets Available for
Benefits, with Fund Information at December 31, 1994 C25
Statement of Changes in Net Assets Available
for Benefits, with Fund Information for the year ended
December 31, 1995 C26
Notes to Financial Statements C27-C32
Supplemental Schedules:
Form 5500 Item 27a*-Schedule of Assets Held
for Investment Purposes at December 31, 1995 C33
Form 5500 Line 27d*-Schedule of Reportable
Transactions for the year ended December 31, 1995 C34
Consent of Independent Accountants C35
</TABLE>
* Refers to item number in Form 5500 ("Annual Return/Report of Employee
Benefit Plan") filed with the Department of Labor for the plan year
ended December 31, 1995.
C22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
-------------
To the Savings Plan Committee of ASARCO Incorporated
and Participating Subsidiaries:
We have audited the accompanying statements of net assets available for benefits
of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries (the
"Plan") as of December 31, 1995 and 1994, and the related statement of changes
in net assets available for benefits for the year ended December 31, 1995. These
financial statements are the responsibility of the Plan administrator. Our
responsibility is to express an opinion on these financial statements 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 benefits of the Plan as of
December 31, 1995 and 1994 and the changes in net assets available for benefits
for the year ended December 31, 1995 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, as listed in
the index on page C22, 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's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the accompanying statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the statements of net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information 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.
COOPERS & LYBRAND L.L.P.
New York, New York
June 14, 1996
C23
<PAGE>
Savings Plan of ASARCO Incorporated and Participating Subsidiaries
Statement of Net Assets Available for Benefits, with Fund Information
at December 31, 1995
(dollars in thousands)
<TABLE>
<CAPTION>
Non-Prtcpnt
Participant Directed Dirctd
------------------------------------------------------------------------------------------- ------
Vanguard Asarco Vanguard Vanguard Vanguard Vanguard Vangrd Vangrd Asarco
Index Common Mny Mrkt Fix Inc Vanguard Index U.S. Windsr Bond Common
Trust 500 Stock Rsrv Prm Secrts Wellngtn Ext Mrkt Growth II Index Loan Stock
ASSETS: Portflio Fund PrtflIo Fund Fund Fund Fund Fund Fund Fund Fund Total
-------- ---- -------- ---- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at
fair value:
ASARCO Common $2,494 $21,838 $24,332
Stock (cost
$19,784)
Shares of
registered
investment
companies:
Vanguard Money
Market 15 $19,078 129 19,222
Reserves
Prime
Portfolio
(cost
approximates
market)
Vanguard Index
Trust 500 $23,328 23,328
Portfolio
(cost $17,258)
Vanguard Fixed
Income
Securities $8,958 8,958
Fund - Short
Term U.S.
Treasury
Portfolio
(cost $8,845)
Vanguard $8,333 8,333
Wellington
Fund (cost
$7,086)
Vanguard Index
Extended $2,093 2,093
Market Fund
(cost $1,736)
Vanguard U.S. $2,358 2,358
Growth Fund
(cost $1,897)
Vanguard $6,697 6,697
Windsor II
Fund (cost
$5,749)
Vanguard Bond $382 382
Index Fund
(cost $370)
Loans to Partcpnts $4,303 4,303
----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -----
Total 23,328 2,509 19,078 8,958 8,333 2,093 2,358 6,697 382 4,303 21,967 100,006
Investments
Contributions
Receivable:
Participant 145 21 87 58 83 32 29 74 2 531
Company 187 187
Interest 26 26
Receivable
Loans Receivable 48 6 28 18 20 6 9 21 (157) 1
------ ----- ------- ------ ------ ------ ------ ------ ----- ------ ---- -------
TOTAL ASSETS 23,521 2,536 19,193 9,034 8,436 2,131 2,396 6,792 384 4,172 22,155 100,750
------ ----- ------- ------ ------ ------ ------ ------ ----- ----- ------ -------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS $23,521 $2,536 $19,193 $9,034 $8,436 $2,131 $2,396 $6,792 $384 $4,172 $22,155 $100,750
======= ====== ======= ====== ====== ====== ====== ====== ===== ====== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
C24
<PAGE>
Savings Plan of ASARCO Incorporated and Participating Subsidiaries
Statement of Net Assets Available for Benefits, with Fund Information
at December 31, 1994
(dollars in thousands)
<TABLE>
<CAPTION>
Non-Partcpnt
Participant Directed Directed
--------------------------------------------------------------------------------------------- --------
Vanguard Asarco Vanguard Vanguard Vangrd Vangrd Vangrd Asarco
Fixed Index Common Mny Mrkt Fixd Inc Vanguard Ind Ext U.S. Windsor Common
Income Trust 500 Stock Rsrv Prm Securts Wellngtn Market Growth II Loan Stock
ASSETS: Fund Portfolio Fund Prtfolio Fund Fund Fund Fund Fund Fund Fund Total
---- --------- ---- -------- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at
fair value:
ASARCO
Common $2,499 $18,341 $20,840
Stock
(cost
$18,522)
Guaranteed
Annuity $836 836
Contract (at
cost plus
accrued
interest)
Shares of
registered
investment
companies:
Vanguard Money
Market 1,013 11 $16,907 79 18,010
Reserves
Prime
Portfolio
(cost
approximates
market)
Vanguard Index
Trust 500 $16,850 16,850
Portfolio
(cost
$16,006)
Vanguard Fixed
Income
Securities $8,372 8,372
Fund -
Short Term
U.S.
Treasury
Portfolio
(cost $8,734)
Vanguard $5,660 5,660
Wellington
Fund (cost
$5,870)
Vanguard Index $1,264 1,264
Extended
Market Fund
(cost $1,292)
Vanguard U.S. $1,302 1,302
Growth Fund
(cost $1,278)
Vanguard $3,953 3,953
Windsor II
Fund (cost
$4,209)
Loans to Partcpnts $3,750 3,750
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------ -----
Total 1,849 16,850 2,510 16,907 8,372 5,660 1,264 1,302 3,953 3,750 18,420 80,837
Investments
Contributions
Receivable:
Participant 139 21 84 65 81 28 20 65 503
Company 182 182
Interest 19 19
Receivable
Loans Receivable 36 6 22 16 30 6 4 16 (136)
----- ------ ----- ------ ----- ----- ----- ----- ----- ----- ------ ------
TOTAL ASSETS 1,849 17,025 2,537 17,013 8,453 5,771 1,298 1,326 4,034 3,633 18,602 81,541
----- ------ ----- ------ ----- ----- ----- ----- ----- ----- ------ ------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS $1,849 $17,025 $2,537 $17,013 $8,453 $5,771 $1,298 $1,326 $4,034 $3,633 $18,602 $81,541
====== ======= ====== ======= ====== ====== ====== ====== ====== ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
C25
<PAGE>
Savings Plan of ASARCO Incorporated and Participating Subsidiaries
Statement of Changes in Net Assets Available for Benefits, with Fund Information
for the year ended December 31, 1995
(dollars in thousands)
<TABLE>
<CAPTION>
Vanguard Asarco Vangrd Vangrd Vanguard Vangrd Vanguard Vanguard
Fixed Index Common Mny Mkt Fxd Inc Vanguard Ind Extd U.S. Windsor Bond
Income Trst 500 Stock Rsr Prm Secrts Wellngtn Market Growth II Index Loan
ADDITIONS: Fund Portflio Fund Portfl Fund Fund Fund Fund Fund Fund Fund Total
---- -------- ---- ------- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income
Net
Appreciation $5,703 $2,851 $460 $1,580 $417 $502 $1,319 $11 $12,843
(Depreciation)
in the Fair
Value of
Investments
Dividends 531 532 $1,052 543 404 59 96 385 11 3,613
Interest $1 $268 269
---- ----- ----- ----- ----- ----- ----- ---- ----- ----- ----- ------
Total 1 6,234 3,383 1,052 1,003 1,984 476 598 1,704 22 268 16,725
Contributions
Participants 1,760 274 1,045 732 1,015 377 315 849 10 6,377
Company 2,261 2,261
Loan Repayments 554 116 324 228 292 77 91 256 2 (1,940)
Transfer from 34 50 25 7 31 35 19 30 26 257
other plan
Interfund (1,848) (123) (745) 2,152 (531) 17 10 268 448 352
------- ----- ------ ----- ----- ----- ---- ---- ----- ---- ------ ------
transfers
TOTAL (1,847) 8,459 5,339 4,598 1,439 3,339 975 1,291 3,287 386 (1,646) 25,620
ADDITIONS
DEDUCTIONS
Withdrawals 2 1,278 1,696 1,510 629 559 76 122 338 2 192 6,404
Loans 686 92 845 229 173 62 99 191 (2,377)
Other (1) (1) 63 (58) 4 7
---- ------ ----- ----- ----- ----- ----- ---- ----- ----- ----- -----
TOTAL DEDUCTIONS 2 1,963 1,787 2,418 858 674 142 221 529 2 (2,185) 6,411
---- ------ ----- ----- ----- ----- ----- ---- ----- ----- ------ -----
Net Increase (1,849) 6,496 3,552 2,180 581 2,665 833 1,070 2,758 384 539 19,209
(Decrease)
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS,
BEGINNING OF
YEAR 1,849 17,025 21,139 17,013 8,453 5,771 1,298 1,326 4,034 3,633 81,541
----- ------ ------ ------ ----- ----- ----- ----- ----- ---- ----- ------
NET ASSETS
AVAILABLE
FOR PLAN
BENEFITS,
END OF YEAR $0 $23,521 $24,691 $19,193 $9,034 $8,436 $2,131 $2,396 $6,792 $384 $4,172 $100,750
===== ======= ======= ======= ====== ====== ====== ====== ====== ==== ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
C26
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Notes to Financial Statements
1. Plan Description
The following description of the Savings Plan of Asarco Incorporated
and Participating Subsidiaries (the "Plan") provides only general
information. Reference should be made to the Plan document for a
complete description of the Plan and Plan amendments, including
eligibility requirements and vesting provisions.
General:
Effective January 1, 1980, ASARCO Incorporated (the "Company")
established the Savings Plan of ASARCO Incorporated and Participating
Subsidiaries (the "Plan"), which has been amended thereafter.
Contributions commenced in July 1980. The Plan is a defined
contribution plan and is administered by the Savings Plan Committee in
accordance with authority delegated by the Fiduciary Committee. The
Plan is designed to provide a method of savings by eligible employees
for their retirement and other needs, and to enable them to acquire an
ownership interest in the Company.
Contributions:
Each eligible employee wishing to participate in the Plan must elect to
authorize pre-tax and/or post-tax contributions by payroll deduction.
Contributions are stated in whole percentages of 1% to 12% of the
participant's basic earnings, as defined. A participant may elect to
increase, decrease or suspend the pre-tax or post-tax contributions on
the first day of any calendar quarter. The Internal Revenue Code of
1986 (the "Code"), as amended, limited the maximum amount an employee
may contribute on a pre-tax basis to $9,240 in 1995 and 1994.
Matching Company Contribution - The Company matches the first 6% of a
participant's monthly contribution at the rate of 50%. The matching
contribution may be made in either cash or ASARCO Common Stock and in
the case of cash, the Plan's trustee, Vanguard Fiduciary Trust Company
("Vanguard"), is required to purchase ASARCO Common Stock.
Contributions for the year ended December 31, 1995 consisted of the
following:
Cash $ 236
Asarco Common Stock 2,260,472
---------------
$2,260,708
===============
The Company is not obligated to make a contribution during any period
in which it has no accumulated retained earnings. The Company's
contributions are subject to all legal restrictions which may apply,
including Sections 401 and 415 of the Code, which limit the annual
contributions to an employee's account.
Participants are 100% vested upon participation in the plan.
Loans:
The Plan provides for loans to participants who have participated in
the Plan for at least one year, subject to certain limitations. The
maximum loan allowed to each participant is limited to the lessor of
50% of the total value of the participant's accounts, or $50,000
reduced by the highest outstanding balance of any other Plan loan to
such participant during the prior twelve-month period.
C27
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Notes to Financial Statements - Continued
A participant's loan is repayable within no more than five years or
immediately upon termination of employment. Interest is currently
accrued at the prime rate. Loans are secured by a lien on the
participant's interest in the Plan. Loan repayments are made through
payroll withholdings from the participant's earnings. A participant may
pre-pay a loan at any time without penalty.
2. Significant Plan Amendments
On June 30, 1995, the Plan was amended effective July 1, 1995 to permit
employees to increase, decrease or suspend pre-tax or post-tax
contributions as of the first day of any calendar quarter; to include a
change in the definition of Basic Earnings to recognize pre-tax
contributions made to the Company's Ben-A-Flex program; and to change the
definition of Eligible Employee to exclude employees receiving benefits
under the Company's Long-Term Disability Plan.
On July 27, 1994 the Plan was amended effective July 1, 1994, to change
the eligibility waiting period from one year to six months of employment;
to accept rollovers from another employer's qualified savings plan; and
to charge the cost of the loan administration fees to Plan participants.
In addition, on June 1, 1994, the Enthone-OMI, Inc. Retirement Savings
Plan was merged into the Company's Plan.
On November 23, 1993, the Plan was amended effective January 1, 1994 to
comply with the Department of Labor regulations issued under Section
404(c) of ERISA and the Omnibus Budget Reconciliation Act of 1993, which
limited annual covered compensation to $150,000.
3. Summary of Significant Accounting Policies
Investments Valuation:
Shares of registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by the Plan at
year-end. The carrying value of the Plan's investment in the guaranteed
annuity contract is cost plus accrued interest. The Asarco Common Stock
Fund is valued at the net asset value as reported by the fund manager.
The net fair values of the underlying investments of the Asarco Common
Stock Fund are based on quoted market prices.
Basis of Accounting:
The financial statements of the Plan are prepared under the accrual
method of accounting.
Investment Transactions and Investment Income:
Transactions are accounted for on a trade-date basis. Average cost is the
basis used in the determination of gains or losses on sales of
securities. Dividend income is recorded at the ex-dividend date. Income
from other investments is recorded as earned.
Net (depreciation) appreciation in the fair value of the Plan's
investments, as shown in the statement of changes in net assets, consists
of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
C28
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Notes to Financial Statements - Continued
Contributions:
The Company's matching contributions are measured by reference to the
participant contributions and are not discretionary.
Loans to Participants:
Loans to participants are presented in the Statement of Net Assets
Available for Plan Benefits as Plan assets.
Payment of Benefits:
Benefits are recorded when paid.
Plan Expenses:
The Company pays all administrative expenses of the Plan including trust,
recordkeeping, consulting, audit and legal fees, with the exception of
loan administration fees which are charged to participants. Taxes,
excluding transfer taxes on shares of Asarco Common Stock distributed to
participants or their beneficiaries, and investment fees related to
Vanguard Funds are paid from the net assets of such funds.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from
those estimates.
Reclassifications:
Certain 1994 amounts have been reclassified to conform to the 1995
presentation.
4. Investment Funds
Vanguard is the investment manager and participant recordkeeper for all
investment funds of the Plan. Vanguard is also the trustee of all of the
funds with the exception of certain investment contracts held in the
Fixed Income Fund, for which Wachovia Bank of North Carolina, N.A. is
trustee.
Upon enrollment in the Plan throughout 1995, participants directed their
elected contributions to be invested in one or more of the following
funds in multiples of 5%:
o Vanguard Index Trust 500 Portfolio - A fund invested in all of
the stocks included in the Standard & Poor's 500 Composite
Index (the "Index") in approximately the same proportions as
they are represented in the Index. At December 31, 1995 and
1994, the number of Plan participants who held an interest in
this fund was 1,272 and 1,269, respectively.
o Vanguard Money Market Reserves Prime Portfolio - A fund
invested in a portfolio of high quality money market
instruments with maturities of one year or less. At December
31, 1995 and 1994, the number of Plan participants who held an
interest in this fund was 1,222 and 1,263, respectively.
C29
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Notes to Financial Statements - Continued
o Vanguard Fixed Income Securities Fund-Short Term U.S. Treasury
Portfolio - A fund invested primarily in short-term U.S.
Treasury securities with an average maturity of two to three
years. At December 31, 1995 and 1994, the number of Plan
participants who held an interest in this fund was 680 and
706, respectively.
o Vanguard Wellington Fund - A fund invested in bonds and common
stocks. the bonds are held for relative stability of income
and principal, while the common stocks are held for potential
growth of capital and income. At December 31, 1995 and 1994,
the number of Plan participants who held an interest in this
fund was 827 and 787, respectively.
o Vanguard Index Extended Market Fund - A fund which provides
investment results that correspond to the aggregate price and
yield performance of the Wilshire 4500 Index. The Wilshire
4500 Index consists of over 4,500 U.S. common stocks
(primarily medium and small capitalization stocks) that are
not included in the Standard & Poor's 500 Composite Stock
Price Index. At December 31, 1995 and 1994, the number of Plan
participants who held an interest in this fund was 403 and
356, respectively.
o Vanguard U.S. Growth Fund - A fund invested primarily in a
diversified portfolio of common stocks with above-average
growth potential. At December 31, 1995 and 1994, the number of
Plan participants who held an interest in this fund was 362
and 286, respectively.
o Vanguard Windsor II Fund - A fund invested in common stocks to
provide capital appreciation and dividend income. At December
31, 1995 and 1994, the number of Plan participants who held an
interest in this fund was 800 and 730, respectively.
o Asarco Common Stock Fund - A fund that invests exclusively in
ASARCO Incorporated common stock with a small amount invested
in the Vanguard Money Market Reserves Prime Portfolio to allow
for timely responsiveness to Plan transactions. At December
31, 1995 and 1994, the number of Plan participants who held an
interest in this fund was 2,001 and 1,974, respectively.
In addition, beginning April 30, 1995, participants could direct their elected
contribution to be vested in the following fund in multiples of 5%.
o Vanguard Bond Index Fund - A fund that holds a combination of
securities which, taken together, are expected to perform
similarly to the Total Bond Market Portfolio of the Lehman
Brothers Aggregate Bond Index. At December 31, 1995, 33 Plan
participants held an interest in this fund.
The Plan also maintains the following fund:
o Loan Fund - A fund designed to facilitate the recordkeeping
and other administrative functions relating to loans made to
participants based on their account balances (See Note 1).
These loans are recorded as receivables of the Plan.
Effective January 1, 1993, the Company chose to discontinue the Fixed Income
Fund as an investment option of the Plan. The Fixed Income Fund had invested in
fixed income contracts and money market investments. After January 1, 1993,
transfers and employee elected contributions were no longer invested in the
Fixed Income Fund. By January 3, 1995, all participant balances were transferred
from the Fixed Income Fund to other investment options of the Plan, as elected
by participants. If no election was made, the participant's balance was
transferred to the Vanguard Money Market Reserves Prime Portfolio Fund. At
December 31, 1994, 1,236 Plan participants held an interest in this fund.
C30
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Notes to Financial Statements - Continued
Risks and Uncertainties:
The Plan provides for investment options in various mutual funds. Investment
securities are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain investment securities
and the level of uncertainly related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in the near
term would materially affect participants' account balances and the amounts
reported in the statement of net assets available for plan benefits and the
statement of changes in the assets available for plan benefits. Participants are
advised to read a Vanguard prospectus or the Plan's summary plan description
before investing in any fund.
Vanguard as recordkeeper maintains individual account records reflecting each
participant's net interest in each fund of the Plan in which such participant
invests. Participant's net interest in each fund of the Plan is represented by
units of participation. The following schedule shows the number of units and the
net asset value per unit or per share in each fund:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
----------------- -----------------
Net Asset Net Asset
Number of Value Number of Value
Units Per Unit Units Per Unit
<S> <C> <C> <C> <C>
Fixed Income Fund - - 1,849,115 $ 1.00
Asarco Common Stock Fund* 2,048,210 $11.95 1,965,216 $10.65
Vanguard Index Trust 500 Portfolio*
405,004 $57.60 392,126 $42.97
Vanguard Money Market Reserves Prime
Portfolio* 19,078,354 $1.00 16,907,259 $ 1.00
Vanguard Fixed Income Securities Fund -
Short Term U.S. Treasury Portfolio* 868,060 $10.32 855,135 $ 9.79
Vanguard Wellington Fund* 341,107 $24.43 291,936 $19.39
Vanguard Windsor II Fund** 324,145 $20.66 249,901 $15.82
Vanguard U.S. Growth Fund 115,866 $20.35 84,911 $15.33
Vanguard Index Extended
Market Fund 86,948 $24.07 68,269 $18.52
Vanguard Bond Index Fund 37,632 $10.15 - -
</TABLE>
*Represents 5% or more of net assets available for plan benefits.
**Represents 5% or more of net assets available for plan benefits at
December 31, 1995, only.
C31
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Notes to Financial Statements - Continued
5. Net Appreciation (Depreciation) in Fair Value of Plan Investments
The net appreciation (depreciation) of the fair value of the Plan's
investments is summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
Vanguard Index Trust
500 Portfolio $5,703,219 $(338,497)
ASARCO Common Stock Fund 2,850,974 4,071,756
Vanguard Fixed Income
Securities Fund - Short Term
U.S. Treasury Portfolio 460,436 (481,169)
Vanguard Wellington Fund 1,579,545 (281,220)
Vanguard Windsor II Fund 1,318,851 (281,024)
Vanguard U.S. Growth Fund 502,178 25,981
Vanguard Index Extended Market Fund 417,047 (57,234)
Vanguard Bond Index Fund 10,907 -
----------- ----------
Total $12,843,157 $2,658,593
=========== ==========
</TABLE>
6. Tax Status
The Plan, as amended through July 27, 1994, has received a favorable
determination from the Internal Revenue Service ("IRS") that it is a
qualified plan and trust under Section 401(a) of the Code and, thus,
exempt from federal income taxes under provisions of Section 501(a) of
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 designed and is currently being operated in
compliance with the applicable requirements of the code.
7. Termination Priorities
Although it has not expressed any intent to do so, the Company reserves
the right to amend or discontinue the Plan by action of the Board at any
time. In the event of termination or partial termination of the Plan or a
complete discontinuance of matching Company contributions under the Plan,
each affected participant shall be 100% vested in all amounts credited to
their account at the date of such termination, partial termination, or
complete discontinuance of matching Company contributions.
C32
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Form 5500 Item 27a
Schedule of Assets Held for Investment Purposes
at December 31, 1995
<TABLE>
<CAPTION>
Cost or Market
Identity of Issue or Borrower Book Value Value
<S> <C> <C>
Vanguard Index Trust 500 Portfolio $17,258,482 $23,328,259
Asarco Common Stock Fund 19,928,002 24,476,111
Vanguard Fixed Income Securities Fund -
Short Term U.S. Treasury Portfolio 8,845,200 8,958,387
Vanguard Money Market Reserves
Prime Portfolio 19,078,354 19,078,354
Vanguard Wellington Fund 7,085,629 8,333,261
Vanguard Index Extended Market Fund 1,735,760 2,092,851
Vanguard U. S. Growth Fund 1,897,082 2,357,878
Vanguard Windsor II Fund 5,748,918 6,696,850
Vanguard Bond Index Fund 369,722 381,595
Loan Fund
Participants' Loans (interest rates range from 8.5% to 9.0%)
- 4,302,924
----------- ------------
TOTAL INVESTMENTS $81,947,149 $100,006,470
=========== ============
</TABLE>
C33
<PAGE>
Savings Plan of ASARCO Incorporated
and Participating Subsidiaries
Form 5500 Line 27d
Schedule of Reportable Transactions
for the year ended December 31, 1995
<TABLE>
<CAPTION>
Number of Number of Purchase Selling Basis of Net Gain
Description of Asset Purchases Sales Price Price Asset or (Loss)
-------------------- --------- ----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Common Stock of
ASARCO Incorporated 122 178 $5,320,783 $4,623,953 $4,004,011 $619,942
Vanguard Index Trust
500 Portfolio 77 179 4,050,518 3,273,766 2,797,087 476,679
Vanguard Money Market
Reserves Prime Portfolio 191 192 7,317,956 5,088,189 5,088,189 -
Vanguard Fixed Income
Securities Fund-Short
Term U.S. Treasury
Portfolio 129 149 2,814,495 2,688,335 2,703,596 (15,261)
</TABLE>
C34
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectuses constituting
part of the Registration Statements of ASARCO Incorporated on Form S-3 (File
Nos. 33-45631, 33-55993 and 333-02359) and on Form S-8 (File Nos. 2-67732,
2-83782 and 33-34606) of our report dated June 14, 1996 on our audits of the
Statements of Net Assets Available for Benefits of the Savings Plan of ASARCO
Incorporated and Participating Subsidiaries as of December 31, 1995 and 1994,
the Supplemental Schedules as of December 31, 1995 and for the year then ended
and the Statement of Changes in Net Assets Available for Benefits for the year
ended December 31, 1995, which report is included in this Annual Report on Form
11-K. We also consent to the incorporation by reference of such report in the
1995 Annual Report on Form 10-K of ASARCO Incorporated.
COOPERS & LYBRAND L.L.P.
New York, New York
June 14, 1996
C35
