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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1995
Commission file number 1-82
PHELPS DODGE CORPORATION
(a New York corporation)
13-1808503
(I.R.S. Employer Identification No.)
2600 N. Central Avenue, Phoenix, AZ 85004-3089
Registrant's telephone number: (602) 234-8100
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 .
Number of Common Shares outstanding at May 5, 1995: 69,542,339 shares.
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<PAGE>
PHELPS DODGE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995
Table of Contents
-----------------
Statement of Consolidated Operations
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Information
Review by Independent Accountants
Report of Independent Accountants on Review of Interim Financial Information
Management's Discussion and Analysis
Legal Proceedings
Exhibits and Reports on Form 8-K
Signatures
Index to Exhibits
<PAGE>
PHELPS DODGE CORPORATION AND SUBSIDIARIES
Part I. Financial Information
Item 1. Financial Statements
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited; in millions except per share data)
First Quarter
--------------
1995 1994
---- ----
SALES AND OTHER OPERATING REVENUES $1,033.5 694.3
-------- --------
OPERATING COSTS AND EXPENSES
Cost of products sold 687.1 529.6
Depreciation, depletion and amortization 54.5 47.1
Selling and general administrative expense 30.7 25.5
Exploration and research expense 16.7 11.0
Gain on asset dispositions (see Note 4) (26.8) -
-------- --------
762.2 613.2
-------- --------
OPERATING INCOME 271.3 81.1
Interest expense (15.4) (13.8)
Capitalized interest 0.4 5.8
Miscellaneous income and expense, net 10.9 -
-------- --------
INCOME BEFORE TAXES, MINORITY INTERESTS AND
EQUITY IN NET EARNINGS OF AFFILIATED COMPANIES 267.2 73.1
Provision for taxes on income (80.2) (24.9)
Minority interests in consolidated
subsidiaries (2.8) (1.9)
Equity in net earnings of affiliated
companies 1.1 2.3
-------- --------
NET INCOME $ 185.3 48.6
======== ========
EARNINGS PER SHARE $ 2.61 0.69
======== ========
AVERAGE NUMBER OF SHARES OUTSTANDING 70.9 70.9
See Notes to Consolidated Financial Information.
<PAGE>
BUSINESS SEGMENTS
(Unaudited; in millions)
First Quarter
-------------
1995 1994
---- ----
SALES AND OTHER OPERATING REVENUES
Phelps Dodge Mining Company $ 606.4 354.9
Phelps Dodge Industries 427.1 339.4
-------- --------
$1,033.5 694.3
======== ========
OPERATING INCOME (LOSS)
Phelps Dodge Mining Company $ 202.1 52.6
Phelps Dodge Industries 78.0 36.1
Corporate and other (8.8) (7.6)
-------- --------
$ 271.3 81.1
======== ========
See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED BALANCE SHEET
(In millions)
March 31, December 31,
1995 1994
---- ----
(unaudited)
ASSETS
Cash and short-term investments, at cost $ 402.8 286.9
Accounts receivable, net 541.3 489.5
Inventories 266.7 266.3
Supplies 112.2 110.7
Prepaid expenses 17.4 15.9
Deferred income taxes 39.5 38.6
-------- --------
Current assets 1,379.9 1,207.9
Investments and long-term accounts receivable 82.8 82.0
Property, plant and equipment, net 2,592.4 2,566.4
Other assets and deferred charges 277.8 277.5
-------- --------
$4,332.9 4,133.8
======== ========
LIABILITIES
Short-term debt $ 55.1 49.3
Current portion of long-term debt 23.0 25.3
Accounts payable and accrued expenses 560.3 528.5
Income taxes 67.4 46.6
-------- --------
Current liabilities 705.8 649.7
Long-term debt 620.8 622.3
Deferred income taxes 268.0 243.6
Other liabilities and deferred credits 361.9 365.3
-------- --------
1,956.5 1,880.9
-------- --------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES 68.3 65.3
-------- --------
COMMON SHAREHOLDERS' EQUITY
Common shares, 70.1 outstanding
(12/31/94 - 70.7) 437.9 441.7
Capital in excess of par value 54.4 84.5
Retained earnings 1,923.8 1,770.3
Cumulative translation adjustments and other (108.0) (108.9)
-------- --------
2,308.1 2,187.6
-------- --------
$4,332.9 4,133.8
======== ========
See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited; in millions)
Three months
ended
March 31,
--------------
1995 1994
---- ----
OPERATING ACTIVITIES
Net income $185.3 48.6
Adjustments to reconcile net income to
cash flow from operations:
Depreciation, depletion and amortization 54.5 47.1
Deferred income taxes 24.1 4.4
Equity earnings net of dividends received (1.1) (2.3)
------ ------
Cash flow from operations 262.8 97.8
Adjustments to reconcile cash flow from
operations to net cash provided by
operating activities:
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable (50.1) (38.9)
(Increase) decrease in inventories 0.6 (21.9)
(Increase) decrease in supplies (2.5) 4.6
(Increase) decrease in prepaid expenses (1.5) (0.4)
(Increase) decrease in deferred income taxes (0.9) (0.1)
Increase (decrease) in interest payable 3.7 0.8
Increase (decrease) in other accounts
payable 23.7 16.9
Increase (decrease) in income taxes 20.9 6.5
Increase (decrease) in other accrued
expenses 2.3 8.7
Gain on asset dispositions (26.8) -
Other adjustments, net (0.4) 2.2
------ ------
Net cash provided by operating activities 231.8 76.2
------ ------
INVESTING ACTIVITIES
Capital outlays (87.9) (83.5)
Capitalized interest (0.4) (5.8)
Proceeds from asset dispositions 38.5 0.5
Investment in subsidiaries - (52.1)
Other - (1.0)
------ ------
Net cash used in investing activities (49.8) (141.9)
------ ------
FINANCING ACTIVITIES
Increase in debt 6.5 95.9
Payment of debt (6.0) (94.6)
Common dividends (31.9) (29.1)
Purchase of common shares (38.8) (2.1)
Debt issue costs - (2.9)
Other 4.1 2.3
------ ------
Net cash used in financing activities (66.1) (30.5)
------ ------
INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS 115.9 (96.2)
CASH AND SHORT-TERM INVESTMENTS AT
BEGINNING OF PERIOD 286.9 255.8
------ ------
CASH AND SHORT-TERM INVESTMENTS AT END
OF PERIOD $402.8 159.6
====== ======
See Notes to Consolidated Financial Information.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
1. The unaudited consolidated financial information presented herein has
been prepared in accordance with the instructions to Form 10-Q and does
not include all of the information and note disclosures required by
generally accepted accounting principles. Therefore, this information
should be read in conjunction with the consolidated financial
statements and notes thereto included in the Corporation's Form 10-K
for the year ended December 31, 1994. This information reflects all
adjustments that are, in the opinion of management, necessary to a fair
statement of the results for the interim periods reported.
2. The results of operations for the three-month period ended March 31,
1995, are not necessarily indicative of the results to be expected for
the full year.
3. The Corporation enters into price protection arrangements from time to
time, depending on market circumstances, to ensure a minimum price for
a portion of its expected future mine production. Approximately 95
percent of the Corporation's anticipated copper production for 1995 has
been protected under such arrangements. The Corporation has entered
into annual contracts with several financial institutions that provide
for minimum quarterly average prices of 80 cents per pound, based on
the average London Metal Exchange (LME) price each quarter, for
approximately 640 million pounds of copper cathode. Contracts under
this arrangement for approximately 195 million pounds of copper cathode
expired on March 31, 1995, without payment to Phelps Dodge. In
addition, the Corporation has entered into annual contracts that
provide minimum (approximately 95 cents) and maximum (approximately
$1.33) prices per pound for approximately 650 million pounds of copper
cathode. The minimum prices are based on quarterly average LME prices
for approximately 370 million pounds and on the annual average LME
price for the remainder. The maximum prices are based on the annual
average LME price for all 650 million pounds. Contracts under this
arrangement that provided minimum prices for approximately 95 million
pounds of copper cathode expired on March 31, 1995, without payment to
Phelps Dodge.
With respect to 1996 production, as of May 5, 1995, the Corporation had
entered into contracts with several financial institutions that provide
for a minimum 1996 first quarter average price of 95 cents per pound
for approximately 170 million pounds of copper cathode, and a minimum
1996 second quarter average price of 95 cents per pound for
approximately 90 million pounds of copper cathode. These contracts are
based on the average LME price for the quarter. In addition, the
Corporation has entered into contracts that effectively ensure minimum
(approximately 95 cents) and maximum (approximately $1.47) prices per
pound for the 1996 first quarter for approximately 170 million pounds
of copper cathode, minimum (approximately 95 cents) and maximum
(approximately $1.43) prices per pound for the 1996 second quarter for
approximately 170 million pounds of copper cathode, and minimum
(approximately 95 cents) and maximum (approximately $1.36) prices per
pound for the 1996 third quarter for approximately 10 million pounds of
copper cathode. The minimum and maximum prices are based on the
quarterly average LME price.
4. The Corporation's 1995 first quarter net income included an after-tax
gain of $16.6 million, or 23 cents per common share, from the sale of
Columbian Chemicals Company's MAPICO division (MAPICO). MAPICO produces
synthetic iron oxides at a plant in St. Louis, Missouri, and was
peripheral to Columbian's core business. The gain on the sale of these
assets before taxes was $26.8 million.
REVIEW BY INDEPENDENT ACCOUNTANTS
The financial information as of March 31, 1995, and for the three-month
periods ended March 31, 1995 and 1994, included in Part I pursuant to Rule 10-01
of Regulation S-X has been reviewed by Price Waterhouse LLP (Price Waterhouse),
the Corporation's independent accountants, in accordance with standards
established by the American Institute of Certified Public Accountants.
Price Waterhouse's report is included in this quarterly report.
Price Waterhouse does not carry out any significant or additional audit
tests beyond those that would have been necessary if its report had not been
included in this quarterly report. Accordingly, such report is not a "report" or
"part of a registration statement" within the meaning of Sections 7 and 11 of
the Securities Act of 1933 and the liability provisions of Section 11 of such
Act do not apply.
<PAGE>
<AUDIT-REPORT>
PRICE WATERHOUSE LLP
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Phelps Dodge Corporation
We have reviewed the accompanying consolidated balance sheet of Phelps Dodge
Corporation and its subsidiaries as of March 31, 1995 and the consolidated
statements of operations and of cash flows for the three-month periods ended
March 31, 1995 and 1994. These financial statements are the responsibility of
the Corporation's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We previously audited in accordance with generally accepted auditing standards,
the consolidated balance sheet as of December 31, 1994, and the related
consolidated statements of operations, of retained earnings and of cash flows
for the year then ended (not presented herein), and in our report dated January
23, 1995 we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated balance sheet information as of December 31, 1994, is fairly stated
in all material respects in relation to the consolidated balance sheet from
which it has been derived.
Price Waterhouse LLP
Phoenix, Arizona
April 19, 1995
</AUDIT-REPORT>
<PAGE>
Item 2. Management's Discussion and Analysis
RESULTS OF OPERATIONS
Phelps Dodge Corporation had consolidated net income of $185.3 million,
or $2.61 cents per common share, in the first quarter of 1995, compared with
$48.6 million, or 69 cents per common share, in the 1994 first quarter. The
Corporation's 1995 first quarter net income included an after-tax gain of $16.6
million, or 23 cents per common share, on the sale of Columbian Chemicals
Company's MAPICO division (MAPICO). MAPICO produces synthetic iron oxides at a
plant in St. Louis, Missouri, and was peripheral to Columbian's core business.
Earnings were higher in the 1995 first quarter than in the
corresponding 1994 period principally as a result of higher average copper
prices. Average spot prices per pound of cathode copper on the New York
Commodity Exchange (COMEX) were approximately 60 percent higher in the first
quarter of 1995 than the average prices in the corresponding 1994 period. Phelps
Dodge Industries also contributed to the increase in earnings with improved
results in the carbon black, wheel and rim, and magnet wire businesses.
Any material change in the price the Corporation receives for copper,
or in its unit production costs, has a significant effect on the Corporation's
results. The Corporation's present share of annual production is approximately
1.3 billion pounds of copper including about 200 million pounds from Candelaria
which began operations in the 1994 fourth quarter. Accordingly, each 1 cent per
pound change in the average annual copper price received by the Corporation, or
in average annual unit production costs, causes a variation in annual operating
income before taxes of approximately $13 million. The Corporation's share of
estimated annual copper production capacity will increase by approximately 130
million pounds as a result of the Southside expansion at the Corporation's
Morenci mine in southeastern Arizona, with startup scheduled in the second half
of 1995. This increase will add approximately $1.3 million to the variation in
annual pre-tax operating income from each 1 cent per pound change in average
realized copper prices or average unit production costs.
The COMEX spot price per pound of copper cathode, upon which the
Corporation bases its selling price, averaged $1.38 in the 1995 first quarter,
compared with 87 cents in the corresponding 1994 period. From April 1 to May 5,
1995, the COMEX price averaged $1.32 per pound, closing at $1.24 on May 5, 1995.
The Corporation enters into price protection arrangements from time to
time, depending on market circumstances, to ensure a minimum price for a portion
of its expected future mine production. Approximately 95 percent of the
Corporation's anticipated copper production for 1995 has been protected under
such arrangements. The Corporation has entered into annual contracts with
several financial institutions that provide for minimum quarterly average prices
of 80 cents per pound, based on the average London Metal Exchange (LME) price
each quarter, for approximately 640 million pounds of copper cathode. Contracts
under this arrangement for approximately 195 million pounds of copper cathode
expired on March 31, 1995, without payment to Phelps Dodge. In addition, the
Corporation has entered into annual contracts that provide minimum
(approximately 95 cents) and maximum (approximately $1.33) prices per pound for
approximately 650 million pounds of copper cathode. The minimum prices are based
on quarterly average LME prices for approximately 370 million pounds and on the
annual average LME price for the remainder. The maximum prices are based on the
annual average LME price for all 650 million pounds. Contracts under this
arrangement that provided minimum prices for approximately 95 million pounds of
copper cathode expired on March 31, 1995, without payment to Phelps Dodge.
With respect to 1996 production, as of May 5, 1995, the Corporation had
entered into contracts with several financial institutions that provide for a
minimum 1996 first quarter average price of 95 cents per pound for approximately
170 million pounds of copper cathode, and a minimum 1996 second quarter average
price of 95 cents per pound for approximately 90 million pounds of copper
cathode. These contracts are based on the average LME price for the quarter. In
addition, the Corporation has entered into contracts that effectively ensure
minimum (approximately 95 cents) and maximum (approximately $1.47) prices per
pound for the 1996 first quarter for approximately 170 million pounds of copper
cathode, minimum (approximately 95 cents) and maximum (approximately $1.43)
prices per pound for the 1996 second quarter for approximately 170 million
pounds of copper cathode, and minimum (approximately 95 cents) and maximum
(approximately $1.36) prices per pound for the 1996 third quarter for
approximately 10 million pounds of copper cathode. The minimum and maximum
prices are based on the quarterly average LME price.
Sales were $1,033.5 million in the 1995 first quarter, compared with
$694.3 million in the corresponding 1994 period. This increase principally
resulted from higher average copper prices and greater sales volumes of copper,
wheels and rims, carbon black, and wire and cable products (including magnet
wire sales from two U.S. plants acquired in March 1994).
PHELPS DODGE MINING COMPANY
Phelps Dodge Mining Company is an international business comprising a
group of companies involved in vertically integrated copper operations including
mining, concentrating, electrowinning, smelting and refining, rod production,
marketing and sales, and related activities. Copper is sold primarily to others
as rod, cathode or concentrates, and to the Phelps Dodge Industries segment. In
addition, Phelps Dodge Mining Company at times smelts and refines copper and
produces copper rod for others on a toll basis. Phelps Dodge Mining Company also
produces gold, silver, molybdenum and copper chemicals, principally as
by-products, and sulfuric acid from its air quality control facilities. This
segment also includes the Corporation's other mining operations and investments
(including fluorspar, silver, lead and zinc operations) and its worldwide
mineral exploration and development programs.
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First Quarter
-------------
1995 1994
---- ----
Copper from own mines * (short tons)
Production 157,300 139,200
Deliveries 158,000 123,500
New York Commodity Exchange
average spot price per
pound - copper cathodes $ 1.38 0.87
(in millions)
Sales and other operating revenues $ 606.4 354.9
Operating income $ 202.1 52.6
- ---------------------
* The Corporation's worldwide copper production and deliveries shown in
the above table exclude the amounts attributable to (i) the 15 percent
undivided interest in the Morenci, Arizona, copper mining complex held
by Sumitomo Metal Mining Arizona, Inc., (ii) the one-third partnership
interest in Chino Mines Company in New Mexico held by Heisei Minerals
Corporation, and (iii) the 20 percent interest in Candelaria held by
SMMA Candelaria, Inc., a jointly owned subsidiary of Sumitomo Metal
Mining Co., Ltd. and Sumitomo Corporation.
================================================================================
Phelps Dodge Mining Company's 1995 first quarter sales of $606.4
million were 71 percent higher than in the first quarter of 1994. This increase
principally resulted from a 51 cents per pound increase in average copper prices
and a 34,500 ton increase in copper sales from mine production that included
20,000 tons from Candelaria (Candelaria commenced production in the 1994 fourth
quarter). Lower copper sales from mine production during the 1994 first quarter
also reflected a managed build-up of anode inventories in anticipation of a
scheduled two-week maintenance shutdown of the Hidalgo smelter in Playas, New
Mexico, in April 1994.
During the 1995 first quarter, Phelps Dodge Mining Company recorded
operating income of $202.1 million, compared with $52.6 million in the
corresponding 1994 period. This increase resulted from the higher average copper
prices and volumes of copper sold from mine production already discussed,
partially offset by higher copper production costs. Increased 1995 unit
production costs principally resulted from higher costs at the Morenci mine as a
result of harder ores, lower cathode production at the Tyrone mine and lower
treatment credits for processing purchased concentrates at the Hidalgo smelter.
PHELPS DODGE INDUSTRIES
Phelps Dodge Industries is a business segment comprising a group of
international companies that manufacture engineered products principally for the
transportation and electrical sectors. Its operations are characterized by
products with significant market share, internationally competitive cost and
quality, and specialized engineering capabilities. This business segment
includes the Corporation's carbon black operations through Columbian Chemicals
Company and its subsidiaries; its wheel and rim operations through Accuride
Corporation and its subsidiaries; its magnet wire operations through Phelps
Dodge Magnet Wire Company and its subsidiaries; its international wire and cable
manufacturing operations through Phelps Dodge International Corporation; and its
U.S. specialty conductor operations through Hudson International Conductors.
================================================================================
First Quarter
-------------
1995 1994
---- ----
(in millions)
Sales and other operating revenues $427.1 339.4
Operating income $ 78.0 36.1
================================================================================
Phelps Dodge Industries' sales of $427.1 million in the first quarter
of 1995 were 26 percent higher than in the corresponding 1994 period. This
increase principally resulted from improved sales volumes and prices in North
American markets for the carbon black, wheel and rim and magnet wire businesses,
and higher sales volumes in European markets for carbon black. Sales volumes of
carbon black benefited from increases at Columbian Chemicals Company's carbon
black plant in Hungary that had just commenced operations in late 1993, and from
the acquisition of a Spanish carbon black facility in December 1994. Sales
volumes in the magnet wire business benefited from the acquisition in March 1994
of two U.S. magnet wire facilities.
During the 1995 first quarter, Phelps Dodge Industries recorded
operating income of $78.0 million which included $51.2 million in earnings and a
$26.8 million pre-tax gain from the sale of Columbian Chemicals Company's MAPICO
division. Operating income was $36.1 million in the corresponding 1994 period.
Increased 1995 operating income reflected improved sales volumes and margins in
the wheel and rim, carbon black and magnet wire businesses already discussed.
CHANGES IN FINANCIAL CONDITION
Capital outlays during the 1995 first quarter were $76.6 million for
Phelps Dodge Mining Company and $11.1 million for Phelps Dodge Industries.
Capital outlays in the corresponding 1994 period were $70.8 million for Phelps
Dodge Mining Company and $12.6 million for Phelps Dodge Industries. The
Corporation expects capital outlays in 1995 to be approximately $340 million for
Phelps Dodge Mining Company. This amount includes $40 million for the
acquisition of certain mining properties owned by Azco Mining, Inc., including
the Sanchez property in southeastern Arizona and a 70 percent interest in the
Piedras Verdes property in Mexico. Phelps Dodge Industries is expected to spend
approximately $75 million during the year.
At March 31, 1995, the Corporation's total debt was $698.9 million,
compared with $696.9 million at year-end 1994. The Corporation's ratio of debt
to total capitalization was 22.7 percent at March 31, 1995, compared with 23.6
percent at December 31, 1994.
On March 8, 1995, the Corporation paid a regular quarterly dividend of
45 cents per share on its common shares for the 1995 first quarter; the total
amount paid was $31.9 million. On May 3, 1995, the Board of Directors declared a
1995 second quarter regular dividend of 45 cents per common share to be paid on
June 8, 1995, to shareholders of record at the close of business on May 19,
1995. There were 70,067,000 common shares outstanding at March 31, 1995.
In 1995 through May 5, the Corporation purchased 1,273,000 of its
common shares at a total cost of $69.5 million. These purchases included
1,188,000 shares under a new 5 million share buy-back program authorized on
March 7, 1995, and 85,000 shares under a superseded program.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
Reference is made to Paragraph III. of Item 3. Legal Proceedings of the
Corporation's Form 10-K for the year ended December 31, 1994, regarding the
proceedings described below.
Prior to the mid-1960s, a predecessor of Phelps Dodge Industries, Inc.
(PDI), a subsidiary of the Corporation, manufactured and sold some cable and
wire products that were insulated with material containing asbestos. PDI
believes that the use of its products did not result in significant releases of
airborne asbestos fibers. PDI and the Corporation are collectively referred to
below as PDI.
Since the late 1980s, PDI has been served with complaints in
asbestos-related actions filed on behalf of over 13,500 claimants. In these
proceedings, plaintiffs have alleged bodily injury or death caused by purported
exposures to asbestos and have claimed damages based on theories of strict
liability and negligence. Over 12,500 of those claimants were participants in
the Ingalls Shipyard asbestos litigation filed in Pascagoula, Mississippi. Each
claimant in that litigation sought from $2 million to $20 million in
compensatory and punitive damages from a group of approximately 100 to 150
defendants, which included PDI. During 1993 and 1994, PDI was successful in
obtaining the dismissal of all but one of the claims against it in Mississippi.
During 1995, PDI has been dismissed from 31 asbestos-related claims,
while 55 new claims have been filed against PDI in three states. A total of 362
asbestos-related claims are being defended by PDI in 14 jurisdictions.
PDI is vigorously contesting and defending these claims.
Item 6. Exhibits and Reports on Form 8-K
(a) Any exhibits required to be filed by the Corporation are listed in the
Index to Exhibits.
(b) No reports on Form 8-K were filed by the Corporation during the
quarter ended March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Corporation has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHELPS DODGE CORPORATION
------------------------
(Corporation or Registrant)
Date: May 11, 1995 By: Thomas M. Foster
-----------------
Thomas M. Foster
Vice President and Controller
(Principal Accounting Officer)
PHELPS DODGE CORPORATION AND SUBSIDIARIES
Index to Exhibits
10.12 Retirement Agreement dated as of January 6, 1995, between Bernard G.
Rethore and the Corporation.
12 Computation of ratios of total debt to total capitalization.
15 Letter from Price Waterhouse LLP with respect to unaudited interim
financial information.
Exhibit 10.12
RETIREMENT AGREEMENT
RETIREMENT AGREEMENT, dated as of January 6, 1995, by and between
PHELPS DODGE CORPORATION, a New York Corporation with its principal place of
business at 2600 N. Central Avenue, Phoenix, Arizona 85004-3014 (the
"Corporation") and BERNARD G. RETHORE, an individual residing at 6533 East
Maverick Road, Paradise Valley, Arizona 85253 ("Executive").
WHEREAS, Executive has served as a Senior Vice President of the
Corporation and President of Phelps Dodge Industries Inc. ("PDI");
WHEREAS, Executive and the Corporation have mutually agreed that it
would be in the best interests of Executive and the Corporation for Executive to
retire from the Corporation's employ;
WHEREAS, the Corporation desires to assure itself of certain
commitments from Executive and Executive desires to assure himself of a level of
financial security in connection with his retirement;
NOW, THEREFORE, the parties agree as follows:
1. Resignations. Executive hereby resigns as Senior Vice
President of the Corporation and President of PDI as of January
6, 1995. Effective as of January 27, 1995 (the "Termination
Date"), Executive hereby resigns from each other position,
whether as an officer, director or employee, he holds with the
Corporation and with each of the Corporation's subsidiaries and
each other position that he holds with any other organization
that he assumed at the request or direction of the Corporation.
Executive agrees to execute any documents that the Corporation
shall reasonably request to effect or to facilitate the
resignations described herein.
2. Salary. Through the Termination Date, the Corporation shall pay
Executive a base salary for his services to be performed
hereunder at the rate of $290,000 annually (the "Base Salary"),
payable in installments at the same time and in the same manner
as the Corporation pays salary to its other executive employees.
3. Bonus. Executive shall be eligible to receive from the
Corporation a bonus for calendar year 1994 in accordance with the
terms of the Annual Incentive Compensation Plan (the "AICP") and
the goals that have been established thereunder with respect to
Executive's performance. The Corporation shall recommend to the
Compensation and Management Development Committee that the amount
of such bonus should be $213,400. Such bonus shall be paid to
Executive at the same time and subject to the same terms and
conditions as are generally applicable to other senior executives
of the Corporation. Executive shall not be eligible to receive a
bonus for calendar year 1995.
4. 1992-94 LTPP Payment. Executive shall receive the amount that
is otherwise payable to Executive in respect of the 1992-94
performance cycle under the Corporation's Long Term Performance
Plan. Such amount shall be paid to Executive at the same time and
generally subject to the same terms and conditions as are
otherwise applicable to other senior executives of the
Corporation, except that the entire amount of such award shall be
paid in cash with no portion of such amount payable in restricted
stock.
5. Profit Sharing. Executive shall receive the profit sharing
allocation that is otherwise payable to Executive with respect to
1994 performance. Such award shall be paid to Executive at the
same time and generally subject to the same terms and conditions
as are applicable to other senior executives of the Corporation.
Executive shall not be entitled to a profit sharing allocation
for calendar year 1995.
6. Retirement Supplements. (a) Initial Supplement. As soon as
practicable (but not later than 5 business days) after the
Effective Date (as defined in Section 20), Executive shall
receive a one-time, nonrecurring payment in a single lump sum
payment of $435,000, minus all applicable withholding taxes and
any other applicable deductions.
(b) Monthly Benefits. The Corporation shall provide Executive
monthly retirement benefits under the terms of this Agreement,
commencing immediately following the Termination Date, in amount
equal to those retirement benefits that would have been payable
to Executive in accordance with the provisions of the Phelps
Dodge Retirement Plan for Salaried Employees (the "Pension
Plan"), determined without regard to any limitations on
compensation and benefits imposed under the Internal Revenue Code
of 1986, as amended, had he actually completed 10 years of
service and attained age 55 as of the Termination Date. The
monthly benefit will be approximately $3,000 on the basis of a
single life annuity. The amount and form of such retirement
benefits shall be determined under, and shall be payable at the
times and for the periods established in accordance with, the
terms of the Pension Plan. The full amount of the retirement
benefits payable hereunder shall be payable from the
Corporation's general assets, except that (i)(A) Executive agrees
to commence receipt of the monthly retirement benefits actually
payable to him under the Pension Plan when he attains age 65 in
the same form as he elects with respect to the benefits payable
hereunder and (B) commencing with his attainment of age 65, the
amount payable to Executive under this Agreement shall be reduced
by the amount payable to him under the Pension Plan and (ii) in
the event that Executive dies prior to attaining age 65, the
amount of any survivor benefits payable to Executive's spouse
hereunder shall be reduced by the amount of the retirement
benefits that would be payable to such spouse under the Pension
Plan immediately following Executive's death. The Corporation
shall take all actions necessary to cause its obligations
hereunder to be funded under its existing rabbi trust on a
reasonable actuarial basis using the assumptions that are used
for purposes of funding the Pension Plan. Notwithstanding
anything else contained herein to the contrary, the retirement
benefits provided hereunder shall be in lieu of any retirement
benefits that would otherwise be payable to Executive under the
"Supplementary Retirement Provisions" of the Comprehensive
Executive Nonqualified Retirement and Savings Plan of Phelps
Dodge Corporation.
7. Benefits. (a) Continuation of Medical and Life Insurance
Benefits. During the 18 month period immediately following the
Termination Date (the "Initial Period"), subject to Executive
making those contributions required of employees generally to
receive these benefits, the Corporation will continue Executive's
participation in its medical and life insurance benefits plans or
programs as in effect at the Termination Date on the same terms
and conditions as generally apply to all similarly situated
employees. The benefits provided to Executive under the preceding
sentence shall satisfy the Corporation's obligation to provide
him with COBRA continuation coverage. At the end of the Initial
Period, for an additional 18 month period following the end of
the Initial Period (the "Elective Period"), the Corporation shall
provide Executive with reimbursement for medical expenses
substantially identical to the medical coverage provided to
similarly situated employees under the Corporation's generally
applicable policies and programs, subject to Executive making
those contributions required of similarly situated former
employees who are eligible to continue their medical coverage
under COBRA. Following the Elective Period (or, if earlier, the
time at which the Corporation's obligation to provide extended
medical benefits coverage to Executive during the Initial Period
or the Elective Period lapses under Section 7(e) below), the
Corporation shall provide Executive with the same medical
benefits coverage it provides to similarly situated retirees
under the Corporation's generally applicable policies and
programs, subject to Executive making those contributions
required of similarly situated retirees.
(b) Disability Benefits. During the Initial Period, the
Corporation shall pay the cost of continuing the conversion
policy that is available to Executive in respect of long-term
disability benefits (the "Conversion Policy"). Additionally, if,
during the Initial Period, Executive becomes disabled within the
meaning of the Corporation's long-term disability plan in which
Executive participates on the date hereof (the "LTD Plan"),
whether as a result of a condition existing on or before the date
hereof or a condition that first arises after the date hereof,
the Corporation shall provide Executive with the same disability
benefits as would otherwise have been payable to him under the
terms of the LTD Plan, except that (i) the monthly benefits
payable to him hereunder shall be limited to $7,000 per month and
(ii) no benefits shall be payable to him under this sentence
during the Initial Period. Nothing in the preceding sentence
shall be construed to limit in any way the rights of Executive to
receive benefits under the terms of the Conversion Policy.
(c) Certain Expenses. Subject to the provisions of Section 7(f)
below, the Corporation shall promptly reimburse Executive for
reasonable expenses, up to an aggregate amount up to $43,500,
incurred (i) during the Initial Period (A) in respect of
obtaining and maintaining such office space, office equipment and
secretarial support as Executive shall deem necessary to assist
him in pursuing other employment or alternative career
opportunities and (B) any other fees or costs incurred by
Executive in the pursuit of such other employment or alternative
career opportunities and (ii) in connection with the negotiation
and execution of this Agreement.
(d) Accrued Benefits. Except as provided in Section 6(b) above,
Executive shall also receive all of the benefits that have
accrued and that have become vested on or prior to the
Termination Date without regard to the terms of this Agreement
under the terms of the Corporation's generally applicable
employee benefit plans and programs.
(e) Termination of Obligations. If Executive shall commence other
employment (excluding for this purpose self-employment), the
Corporation shall have no further obligation to (i) provide
Executive with continued medical benefits coverage (whether
during the Initial Period or the Elective Period) other than the
retiree medical coverage described in Section 7(a), (ii) provide
Executive with any disability benefits, provided that the
Corporation shall continue paying the cost of the Conversion
Policy during the Initial Period in any event or (iii) to
reimburse Executive under Section 7(c) for any expenses incurred
after obtaining such employment. Notwithstanding anything
contained in the preceding sentence, if Executive obtains other
employment and either (i) his new employer does not provide
medical benefits or disability benefits to its executives or (ii)
the plan, policy or program under which such benefits are
provided (A) contains an exclusion that denies coverage, in whole
or in part, for any pre-existing condition or (B) requires a
minimum period of service to obtain coverage, and such exclusion
or service requirement is applicable to Executive, the
Corporation shall continue to provide Executive with continued
medical benefits coverage (whether during the Initial Period or
the Elective Period) in accordance with the provisions of Section
7(a) or with continued disability benefits as would otherwise
have been payable under the LTD Plan during the Initial Period in
accordance with the provisions of Section 7(b). Any coverage
provided under the immediately preceding sentence shall cease at
the earlier of (i) the time determined under such Section 7(a) or
7(b) or (ii) the date, if any, at which Executive becomes
eligible without restriction for the medical or disability
benefits coverage provided by his new employer, and in all events
any medical or disability benefits coverage provided by the
Corporation shall be secondary to any coverage available to
Executive under such other employer's plan, policy or program.
Executive shall notify the Corporation in writing within 5
business days of the date he commences any such other employment.
8. Stock Options. Subject to the provisions of Section 20, on the
Termination Date, any stock options then held by Executive under
the Corporation's 1987 Stock Option and Restricted Stock Plan and
1993 Stock Option and Restricted Stock Plan (the "Stock Plans")
shall be fully exercisable as of such date (regardless of the
otherwise applicable terms of any such option grant) and shall
remain exercisable until the earlier of (i) the thirtieth day
following the Termination Date or (ii) the date any such option
otherwise expires in accordance with its terms. Except to the
extent provided in this Section 8, all of the terms and
conditions of the Stock Plans and the stock option grants made
thereunder to Executive shall continue to be applicable.
9. Restricted Stock. Subject to the provisions of Section 20, on
the Termination Date, any transfer restrictions applicable as of
such date with respect to all outstanding restricted Common
Shares (the "Restricted Shares") previously awarded to Executive
under the terms of the Stock Plans shall lapse and such
Restricted Shares shall become fully vested as of such
Termination Date.
10. Non-solicitation. During Executive's employment with the
Corporation and for one year after the Termination Date,
Executive will not solicit or otherwise induce any management
employee of the Corporation or any of its subsidiaries to leave
the employ of the Corporation or any of its subsidiaries
(including, without limitation, PDI) or to become associated,
whether as an employee, officer, partner, director, consultant or
otherwise, with any business organization, unless and to the
extent that Executive shall have received the written consent of
the Chief Executive Officer of the Corporation to solicit any
such employee for other employment or unless such employee's
employment by the Company shall have previously terminated
without any solicitation on the part of Executive.
11. Non-disclosure. Without the prior written consent of the
Chief Executive Officer of the Corporation, except to the extent
required by an order of a court having competent jurisdiction or
under subpoena from an appropriate government agency, Executive
shall not disclose any trade secrets, customer lists, drawings,
designs, product development and related information, marketing
plans and related information, sales plans and related
information, manufacturing plans and related information,
management organization and related information (including data
and other information related to members of the Board and
management), operating policies and manuals, business plans and
related information, financial records and related information,
packaging design and related information or other confidential
financial, commercial, business or technical information related
to the Corporation or its subsidiaries (including, without
limitation, PDI) to any third person unless such information has
been previously disclosed to the public by the Corporation or has
become public knowledge other than by a breach of this Agreement.
12. Reformation; Severability. If any provision of this Agreement
(including, without limitation, Section 10 or 11) is determined
by a court of competent jurisdiction or an arbitrator not to be
enforceable in the manner set forth in this Agreement, the
Corporation and Executive agree that it is the intention of the
parties that such provision should be enforceable to the maximum
extent possible under applicable law and that such court or
arbitrator shall reform such provision to make it enforceable in
accordance with the intent of the parties. In the event that one
or more of the provisions of this Agreement (including, without
limitation, Section 10 or 11) shall become invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not be affected thereby.
13. Public Comment. Executive and the Corporation shall agree
upon the content of any voluntary statements, whether oral or
written, to be made by Executive or the Corporation to any third
party or parties or to employees of the Corporation or its
subsidiaries regarding Executive's retirement, including, without
limitation, any press release or other statements to the press,
except that this sentence shall not apply to any statements
required to be made by reason of law, regulation, or any judicial
or other similar proceeding or order. Unless the parties shall
hereafter mutually agree, any such voluntary statement shall be
consistent with the statements contained in attached Exhibit A.
In the event that the Corporation receives a request for a
reference for Executive, such reference shall also be consistent
with the statements contained in Exhibit A. Executive agrees to
refrain from making any derogatory comment concerning the
Corporation or any of its subsidiaries or any of the current or
former officers, directors or employees of the Corporation or any
of its subsidiaries, or any comment inconsistent with the
provisions of this Section 13. The Corporation agrees to refrain
from making any derogatory comment about Executive or any comment
which is inconsistent with the provisions of this Section 13. The
preceding two sentences shall not apply to any truthful
statements required to be made by reason of law, regulation, or
any judicial or other similar proceeding or order. The
Corporation shall advise its officers, directors and relevant
employees of the provisions of this Section 13, including Exhibit
A.
14. Return of Documents and Property. Executive agrees that, on
or before the Termination Date, Executive shall deliver to the
Corporation or PDI (i) any documents and materials containing
trade secrets and other confidential information relating to the
Corporation's or PDI's business and affairs, and (ii) any other
documents, materials and other property belonging to the
Corporation or PDI or any of their affiliated companies that are
in Executive's possession or control on the date of his execution
of this Agreement; provided that Executive shall be entitled to
retain his personal notes, diaries, rolodexes and other similar
documents of a personal nature.
15. Remedies. Executive acknowledges that a material part of the
inducement for the Corporation to enter into this Agreement is
Executive's covenants set forth in Sections 10 and 11 hereof.
Executive agrees that if Executive shall breach any of those
covenants in a material way, the Corporation shall have no
further obligation to pay Executive any of the benefits,
otherwise payable hereunder (except as may otherwise be required
at law and except for the portion of the retirement benefits
provided by Section 6(b) to which Executive would have been
entitled absent this Agreement) and shall be entitled to such
other legal and equitable relief as a court or arbitrator shall
reasonably determine.
16. Releases. In consideration of the benefits provided to
Executive hereunder, Executive hereby releases and absolves the
Corporation and each of its subsidiaries, parents, officers,
directors, employees, agents and assigns from any and all claims,
liabilities, demands or causes of actions, known or unknown,
arising out of or in any way connected with or related to his
employment, including, without limitation, any claims: (i) based
on any local, state or Federal statute relating to age, sex, race
or other form of discrimination (including, without limitation,
the Age Discrimination in Employment Act of 1967, as amended),
(ii) of wrongful discharge or (iii) related to any breach of any
implied or express contract, whether oral or written, that
Executive may now have or may hereafter have against the
Corporation or any of its subsidiaries arising out of or in
connection with Executive's employment with, or service as an
officer or a director of the Corporation or any of its
subsidiaries, other than any claim for the payments and benefits
to be provided to Executive under this Agreement or any agreement
with respect to outstanding awards under the Stock Plans. The
Corporation hereby releases and absolves Executive from any and
all claims, liabilities, demands or causes of actions, known or
unknown, arising out of or in any way connected with or related
to his employment, except that expressly excluded from such
release is any claim arising out of or related to Executive's
willful or intentional misconduct or fraud against the
Corporation or PDI. The Corporation represents that as of the
date of its execution of this Agreement it does not know of any
such misconduct or fraud.
17. Indemnity. The Corporation or one of its subsidiaries
(including, without limitation, PDI), as appropriate, shall
indemnify Executive for any claim arising out of or in connection
with Executive's service as an officer and employee of the
Corporation, and as an officer, director or employee of such
subsidiary in the same manner and to the same extent as the
Corporation or such subsidiary, as the case may be, indemnifies
its then current directors, officers or employees. The
Corporation shall continue coverage of Executive under its
directors' and officers' liability insurance policy to the same
extent as its then current directors, officers or employees are
covered.
18. Withholding. All cash payments to be made under this
Agreement shall be made net of all applicable income and
employment taxes required to be withheld from such payments. To
the extent any compensation is payable to Executive in accordance
with this Agreement other than as a payment in cash, Executive
shall be required to pay the Corporation or PDI, as the case may
be, an amount equal to all applicable income and employment taxes
required to be withheld with respect thereto.
19. Amendment. This Agreement may be amended only by a written
instrument signed by the Corporation and Executive.
20. Entire Agreement; Effective Date. (a) Entire Agreement.
Except to the extent that any other agreement between the
Corporation and Executive governs Executive's rights with respect
to outstanding awards under the Stock Plans (as described in
Section 8 or 9) or the Corporation's plans and programs govern
Executive's accrued vested benefits (as described in Section
7(d)), this Agreement shall constitute the entire Agreement
between the Corporation and Executive or PDI and Executive with
respect to the subject matter hereof. Any other agreement or
understanding between the Corporation and Executive or PDI and
Executive (including, without limitation, any agreement to
provide Executive with benefits in the event his employment is
terminated), whether written or oral, with respect to any matter
addressed or described herein is hereby superseded and revoked
and rendered void and without effect.
(b) Effective Date. Notwithstanding anything else contained in
this Agreement to the contrary, Executive shall have the right to
revoke this Agreement within seven days following the date on
which he executes this Agreement. If Executive does not revoke
this Agreement within such seven day period, then this Agreement
shall be and become enforceable against the parties in accordance
with its terms at the end of the last day of such period (the
"Effective Date"). If Executive revokes this Agreement in
accordance with the terms of this Section 20(b), this Agreement
shall be rendered void and without effect and neither the
Corporation nor Executive shall have any obligation to the other
hereunder, except that, to the extent that the Corporation shall
have provided to Executive the benefits described in Section 8 or
9 hereof prior to the time at which Executive revokes this
Agreement, Executive shall, at the time that he revokes this
Agreement, return to the Corporation (i) any of the Corporation's
Common Shares acquired by him upon the exercise of options that
became exercisable under the terms of this Agreement (or, if he
shall have sold any such Common Shares, the cash proceeds from
any such sale) and (ii) the Corporation's Common Shares with
respect to which the transfer restrictions and provisions
relating to forfeitability lapsed under the terms of this
Agreement (or, if he shall have sold any such Common Shares, the
cash proceeds from any such sale).
21. Survival. The obligations of the Corporation to Executive
under the express terms of this Agreement, and the covenants of
Executive in favor of the Corporation under the express terms of
this Agreement, shall survive the Termination Date for the
periods, and subject to the conditions, set forth herein.
22. Binding Nature. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors, heirs (in the case of Executive) and assigns. No
rights or obligations under this Agreement may be assigned or
transferred by Executive except that Executive's rights to
receive any payment in respect of the compensation and benefits
provided hereunder shall, in the event of death, pass to his
estate, or to his designated beneficiary, and may be transferred
by will or operation of law; provided that nothing in this
Section 22 shall be construed to require the Corporation to pay
any survivor or death benefits in respect of the retirement
benefits described in Section 6(b) other than those, if any, that
are payable in accordance with the form of benefit payment
elected by Executive. No rights or obligations of the Corporation
under this Agreement may be assigned or transferred by the
Corporation except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation in
which the Corporation is not the continuing entity, or the sale
or liquidation of all or substantially all of the assets of the
Corporation, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the
Corporation and such assignee or transferee assumes the
liabilities, obligations and duties of the Corporation, as
contained in this Agreement, either contractually or as a matter
of law. The Corporation further agrees that, in the event of a
sale of assets or liquidation as described in the preceding
sentence, it shall use its reasonable best efforts to cause such
assignee or transferee to expressly assume the liabilities,
obligations and duties of the Corporation hereunder.
23. Notices. Any notices to be given and any payments to be made
hereunder shall be delivered in hand or sent by registered mail,
return receipt requested, to the respective party at the address
noted above for such party or to such other address as either
such party shall direct in accordance with this Section 23.
24. Counsel. Executive and the Corporation acknowledge that each
of them was free to seek the advice of counsel, accountants, and
other experts in connection with the preparation, negotiation,
execution, and delivery of this Agreement. Executive acknowledges
that the Corporation advised him to consult with, and he has
consulted with, an attorney and that he has had at least 21 days
to consider whether to accept the terms of this Agreement and the
benefits provided by the Corporation hereunder in consideration
of the covenants and the release required of him hereunder.
Subject to the provisions of Section 7(c), each party shall be
responsible for the fees of its own attorneys, accountants, and
other experts, if any, incurred in connection with this
Agreement.
25. Resolution of Disputes. Any disputes arising under or in
connection with this Agreement shall be resolved by binding
arbitration, to be held in Phoenix, Arizona in accordance with
the rules and procedures of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Costs of the
arbitration shall be borne by the Corporation. Unless the
arbitrator(s) determine(s) that Executive did not have a
reasonable basis for asserting his position with respect to the
dispute in question, the Corporation shall also reimburse
Executive for his reasonable attorneys' fees incurred with
respect to any arbitration.
26. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
27. Governing Law. This Agreement shall be governed by the laws
of the State of New York, without reference to the principles of
conflict of laws.
28. Headings. Headings to paragraphs in this Agreement are for
the convenience of the parties only and are not intended to be
part of or to affect the meaning or interpretation hereof.
IN WITNESS, WHEREOF, the parties have executed this Agreement effective
as of the day first written above.
PHELPS DODGE CORPORATION
By: John C. Replogle
Title:
Attest:
BERNARD G. RETHORE
Witness:
PHELPS DODGE CORPORATION AND SUBSIDIARIES
Exhibit 12
COMPUTATION OF TOTAL DEBT TO TOTAL CAPITALIZATION
(Dollars in thousands)
March 31, December 31,
1995 1994
---- ----
(unaudited)
Short-term debt $ 55,100 49,300
Current portion of long-term debt 23,000 25,300
Long-term debt 620,800 622,300
----------- -----------
Total debt 698,900 696,900
Minority interests in subsidiaries 68,300 65,300
Common shareholders' equity 2,308,100 2,187,600
----------- -----------
Total capitalization $ 3,075,300 2,949,800
=========== ===========
Ratio of total debt to total
capitalization 22.7% 23.6%
=========== ===========
Exhibit 15
May 11, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that Phelps Dodge Corporation has incorporated by reference our
report dated April 19, 1995 (issued pursuant to the provisions of Statements on
Auditing Standards Nos. 71 and 42) in the Prospectus constituting part of its
Registration Statements on Form S-3 (No. 33-44380) and Form S-8 (Nos. 33-26442,
33-6141, 33-26443, 33-29144, 33-19012, 2-67317, 33-34363, 33-34362, 33-62486).
We are also aware of our responsibilities under the Securities Act of 1933.
Yours very truly,
Price Waterhouse LLP
Phoenix, Arizona
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED BALANCE SHEET AT MARCH 31, 1995 AND THE
RELATED CONSOLIDATED STATEMENTS OF OPERATIONS AND OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 OF PHELPS DODGE
CORPORATION AND ITS SUBSIDIARIES AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 402,800
<SECURITIES> 0
<RECEIVABLES> 541,300
<ALLOWANCES> 0
<INVENTORY> 266,700
<CURRENT-ASSETS> 1,379,900
<PP&E> 2,592,400
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,332,900
<CURRENT-LIABILITIES> 705,800
<BONDS> 620,800
<COMMON> 437,900
0
0
<OTHER-SE> 1,870,200
<TOTAL-LIABILITY-AND-EQUITY> 4,332,900
<SALES> 1,033,500
<TOTAL-REVENUES> 1,033,500
<CGS> 687,100
<TOTAL-COSTS> 687,100
<OTHER-EXPENSES> 44,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,000
<INCOME-PRETAX> 267,200
<INCOME-TAX> 80,200
<INCOME-CONTINUING> 185,300
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