SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 1-82
PHELPS DODGE EMPLOYEE SAVINGS PLAN
PHELPS DODGE CORPORATION
2600 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85004-3089
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Committee has duly caused this Annual Report to be signed by the undersigned
hereunto duly authorized.
PHELPS DODGE EMPLOYEE SAVINGS PLAN
Date: 6/25/99 By: /s/ David L. Pulatie
----------------- ---------------------------------
David L. Pulatie, Chairman
Benefits Administration Committee
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<PAGE>
PHELPS DODGE
EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
DECEMBER 31, 1998 AND 1997
PHELPS DODGE EMPLOYEE SAVINGS PLAN
INDEX
- --------------------------------------------------------------------------------
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits, with Fund Information 2
Statement of Changes in Net Assets Available for Benefits, with Fund
Information 4
Notes to Financial Statements 6
Supplemental Information:*
I. Schedule of Assets Held for Investment Purposes at
December 31, 1998 14
II. Schedule of Loans or Fixed Income Obligations 19
III. Schedule of Reportable Transactions for Year Ended
December 31, 1998 20
</TABLE>
* Other schedules required by Section 2520.103-10 of
the Department of Labor Rules and Regulations for
Reporting and Disclosure under ERISA have been
omitted because they are not applicable
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Benefits Administration Committee and Participants
of the Phelps Dodge Employee Savings Plan
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the net assets available for benefits
of the Phelps Dodge Employee Savings Plan at December 31, 1998 and 1997, and the
changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Benefits Administration Committee (the
Committee); our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by the Committee, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I, II and III is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is additional
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 statement 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 net assets
available for plan benefits and changes in net assets available for benefits of
each fund. Schedules I, II and III and the 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.
PricewaterhouseCoopers LLP
Phoenix, Arizona
June 23, 1999
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income Euro- Conservative
Interest and Equity Enhanced U.S. Small Pacific Investment
Income Growth Growth Index Company Growth Portfolio
Assets Fund Fund Fund Fund Fund Fund Fund
- ---------------------------------- ------- ------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at current value
(cost basis $307,146):
Common Stocks
Registered Investment
Companies $56,079 $75,215 $9,178 $5,562 $ 2,471
Common/Collective Funds $48,165 $26,195 6,468
Guaranteed Investment
Contracts 5,705
Cash and Short-Term
Investments
Loans to Participants
------- ------- ------- ------- ------ ------ -------
53,870 56,079 75,215 26,195 9,178 5,562 8,939
------- ------- ------- ------- ------ ------ -------
Receivables:
Loan Repayments 13 15 22 7 3 2 2
Employee Contributions 33 58 75 38 14 9 10
Employer Contributions 1,133 1,491 1,904 1,007 399 226 234
------- ------- ------- ------- ------ ------ -------
1,179 1,564 2,001 1,052 416 237 246
------- ------- ------- ------- ------ ------ -------
Net assets available for benefits $55,049 $57,643 $77,216 $27,247 $9,594 $5,799 $ 9,185
======= ======= ======= ======= ====== ====== =======
Phelps Schwab Occidental
Moderate Aggressive Dodge Personal Petroleum
Investment Investment Common Choice Common
Portfolio Portfolio Stock Retirement Stock Loan
Assets Fund Fund Fund Fund Fund Fund Total
- ---------------------------------- ------- ------- ------- ------- -------- -------- --------
Investments, at current value
(cost basis $307,146):
Common Stocks $33,263 $ 1,677 $ 142 $ 35,082
Registered Investment
Companies $ 8,613 $11,111 11,421 179,650
Common/Collective Funds 12,892 10,506 104,226
Guaranteed Investment
Contracts 5,705
Cash and Short-Term
Investments 710 710
Loans to Participants $ 17,547 17,547
------- ------- ------- ------- -------- -------- --------
21,505 21,617 33,263 13,808 142 17,547 342,920
------- ------- ------- ------- -------- -------- --------
Receivables:
Loan Repayments 9 14 10 (97)
Employee Contributions 35 56 36 364
Employer Contributions 971 1,224 913 9,502
------- ------- ------- ------- -------- -------- --------
1,015 1,294 959 (97) 9,866
------- ------- ------- ------- -------- -------- --------
Net assets available for benefits $22,520 $22,911 $34,222 $13,808 $ 142 $ 17,450 $352,786
======= ======= ======= ======= ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Interest Equity Growth
Market Income Balanced Income S&P 500 Stock
Assets Fund Fund Fund Fund Fund Fund
- --------------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Investments, at current value
(cost basis $292,241):
Common Stocks
Registered Investment
Companies $34,698 $ 4,013 $69,032 $12,770 $85,400
Guaranteed Investment
Contracts $44,576
Loans to Participants
------- ------- ------- ------- ------- -------
34,698 44,576 4,013 69,032 12,770 85,400
------- ------- ------- ------- ------- -------
Receivables:
Loan Repayments 78 105 6 125 21 159
Employee Contributions 129 165 18 231 66 338
Employer Contributions 1,553 1,304 185 1,950 600 2,568
------- ------- ------- ------- ------- -------
1,760 1,574 209 2,306 687 3,065
------- ------- ------- ------- ------- -------
Net assets available for benefits $36,458 $46,150 $ 4,222 $71,338 $13,457 $88,465
======= ======= ======= ======= ======= =======
Phelps Occidental
Inter- Dodge Petroleum
national SmallCap Common Common
Equity Equity Stock Stock Loan
Assets Fund Fund Fund Fund Fund Total
- --------------------------------- ------ ------- -------- -------- -------- --------
Investments, at current value
(cost basis $292,241):
Common Stocks $ 42,835 $ 269 $ 43,104
Registered Investment
Companies $5,024 $ 6,789 217,726
Guaranteed Investment
Contracts 44,576
Loans to Participants $ 15,551 15,551
------ ------- -------- ----- -------- --------
5,024 6,789 42,835 269 15,551 320,957
------ ------- -------- ----- -------- --------
Receivables:
Loan Repayments 6 8 100 (608)
Employee Contributions 29 42 221 1,239
Employer Contributions 283 391 1,547 10,381
------ ------- -------- ----- -------- --------
318 441 1,868 (608) 11,620
------ ------- -------- ----- -------- --------
Net assets available for benefits $5,342 $ 7,230 $ 44,703 $ 269 $ 14,943 $332,577
====== ======= ======== ===== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Equity S&P 500 Growth SmallCap Interest
Market Balanced Income Index Stock Equity Income
Assets Fund Fund Fund Fund Fund Fund Fund
- -------------------------------------- -------- -------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) $ (108) $ (6,344) $ (225) $ (3,152) $(1,598)
Dividends $ 1,250 80 1,336 2,329 33 $ 1,002
Interest 10 68 28 85 11 1,802
-------- -------- -------- -------- -------- ------- --------
1,250 (18) (4,940) (197) (738) (1,554) 2,804
-------- -------- -------- -------- -------- ------- --------
Transfer of Nesor assets 224 118 237 238 533 146 215
-------- -------- -------- -------- -------- ------- --------
Contributions:
Employee 877 190 1,715 866 2,482 378 1,857
Employer 79 46 408 151 548 84 1,808
-------- -------- -------- -------- -------- ------- --------
956 236 2,123 1,017 3,030 462 3,665
-------- -------- -------- -------- -------- ------- --------
Total additions 2,430 336 (2,580) 1,058 2,825 (946) 6,684
-------- -------- -------- -------- -------- ------- --------
Deductions from net assets
attributed to:
Distributions to participants
and beneficiaries (5,844) (613) (3,474) (616) (4,675) (234) (6,958)
Loans to participants,
net of repayments (95) (15) (296) (38) (722) (31) (406)
Transfer of Accuride assets (1,028) (164) (4,683) (455) (7,533) (324) (2,764)
Fund exchanges, net (31,921) (3,766) (60,305) (13,406) (78,360) (5,695) 12,343
-------- -------- -------- -------- -------- ------- --------
Total deductions (38,888) (4,558) (68,758) (14,515) (91,290) (6,284) 2,215
-------- -------- -------- -------- -------- ------- --------
Increase(decrease) in net
assets during the year (36,458) (4,222) (71,338) (13,457) (88,465) (7,230) 8,899
Net assets available for benefits:
Beginning of year 36,458 4,222 71,338 13,457 88,465 7,230 46,150
-------- -------- -------- -------- -------- ------- --------
End of year -- -- -- -- -- -- $ 55,049
======== ======== ======== ======== ======== ======= ========
Phelps Occidental
Dodge Petroleum Income
EuroPacific Common Common and Equity Enhanced U.S. Small
Growth Stock Stock Growth Growth Index Company
Assets Fund Fund Fund Fund Fund Fund Fund
- -------------------------------------- -------- -------- -------- -------- -------- ------- --------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) $ 479 $ (7,271) $ (129) $ 9,186 $ 14,172 $ 5,326 $ 568
Dividends 301 1,283 9 2,358 1,546 1,017
Interest 9 31 2 3 6 1
------- -------- -------- --------- -------- -------- -------
789 (5,957) (120) 11,546 15,721 5,332 1,586
------- -------- -------- --------- -------- -------- -------
Transfer of Nesor assets 138 287
------- -------- -------- --------- -------- -------- -------
Contributions:
Employee 417 2,455 1,257 1,691 879 341
Employer 339 1,630 1,855 2,395 1,238 510
------- -------- -------- --------- -------- -------- -------
756 4,085 3,112 4,086 2,117 851
------- -------- -------- --------- -------- -------- -------
Total additions 1,683 (1,585) (120) 14,658 19,807 7,449 2,437
------- -------- -------- --------- -------- -------- -------
Deductions from net assets
attributed to:
Distributions to participants
and beneficiaries (333) (3,507) (1) (1,190) (974) (263) (217)
Loans to participants,
net of repayments (19) 65 (268) (364) (132) (16)
Transfer of Accuride assets (276) (3,399)
Fund exchanges, net (598) (2,055) (6) 44,443 58,747 20,193 7,390
------- -------- -------- --------- -------- -------- -------
Total deductions (1,226) (8,896) (7) 42,985 57,409 19,798 7,157
------- -------- -------- --------- -------- -------- -------
Increase(decrease) in net
assets during the year 457 (10,481) (127) 57,643 77,216 27,247 9,594
Net assets available for benefits:
Beginning of year 5,342 44,703 269
------- -------- -------- --------- -------- -------- -------
End of year $ 5,799 $ 34,222 $ 142 $ 57,643 $ 77,216 $ 27,247 $ 9,594
======= ======== ======== ========= ======== ======== =======
Moderate Schwab
Conservative Investment Aggressive Personal
Investment Portfolio Investment Choice
Portfolio Equity Portfolio Retirement Loan
Assets Fund Fund Fund Fund Fund Total
- -------------------------------------- -------- -------- -------- -------- -------- -------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) $ 607 $ 2,244 $ 2,792 $ 2,955 $ 19,502
Dividends 179 504 540 310 14,077
Interest 3 $ 1,552 3,611
------- -------- -------- ------- -------- ---------
789 2,748 3,332 3,265 1,552 37,190
------- -------- -------- ------- -------- ---------
Transfer of Nesor assets 22 2,158
------- -------- -------- ------- -------- ---------
Contributions:
Employee 236 873 1,292 17,806
Employer 298 1,205 1,563 14,157
------- -------- -------- ------- -------- ---------
534 2,078 2,855 31,963
------- -------- -------- ------- -------- ---------
Total additions 1,323 4,826 6,187 3,265 1,574 71,311
------- -------- -------- ------- -------- ---------
Deductions from net assets
attributed to:
Distributions to participants
and beneficiaries (25) (75) (109) (888) (29,996)
Loans to participants,
net of repayments (4) 12 28 2,301
Transfer of Accuride assets (480) (21,106)
Fund exchanges, net 7,891 17,757 16,805 10,543
------- -------- -------- ------- -------- ---------
Total deductions 7,862 17,694 16,724 10,543 933 (51,102)
------- -------- -------- ------- -------- ---------
Increase(decrease) in net
assets during the year 9,185 22,520 22,911 13,808 2,507 20,209
Net assets available for benefits:
Beginning of year 14,943 332,577
------- -------- -------- ------- -------- ---------
End of year $ 9,185 $ 22,520 $ 22,911 $13,808 $ 17,450 $ 352,786
======= ======== ======== ======= ======== =========
</TABLE>
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<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Interest Equity
Market Income Balanced Income S&P 500 Growth
Assets Fund Fund Fund Fund Index Fund Stock Fund
- --------------------------------- --------- --------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income:
Net appreciation (depreciation) 97 12,155 2,063 12,525
Dividends $ 1,872 437 3,813 5,558
Interest $ 3,218 8 93 23 121
--------- --------- --------- --------- --------- ---------
1,872 3,218 542 16,061 2,086 18,204
--------- --------- --------- --------- --------- ---------
Contributions:
Employee 1,759 2,320 235 3,168 775 4,738
Employer 2,144 2,046 242 2,844 782 3,880
--------- --------- --------- --------- --------- ---------
3,903 4,366 477 6,012 1,557 8,618
--------- --------- --------- --------- --------- ---------
Total additions 5,775 7,584 1,019 22,073 3,643 26,822
--------- --------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Distributions to participants
and beneficiaries (7,162) (5,193) (127) (3,119) (493) (4,370)
Other charges, net 1 (9)
Loans to participants,
net of repayments 4 245 1 (175) (8) (188)
Fund exchanges, net 6,459 (7,995) 1,608 (539) 6,339 (5,218)
--------- --------- --------- --------- --------- ---------
Total deductions (698) (12,952) 1,482 (3,833) 5,838 (9,776)
--------- --------- --------- --------- --------- ---------
Increase(decrease) in net
assets during the year 5,077 (5,368) 2,501 18,240 9,481 17,046
Net assets available for benefits:
Beginning of year 31,381 51,518 1,721 53,098 3,976 71,419
--------- --------- --------- --------- --------- ---------
End of year $ 36,458 $ 46,150 $ 4,222 $ 71,338 $ 13,457 $ 88,465
========= ========= ========= ========= ========= =========
<CAPTION>
Phelps Occidental
Small Cap Dodge Petroleum
International Equity Common Common
Assets Equity Fund Fund Stock Fund Stock Fund Loan Fund Total
- --------------------------------- ----------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income:
Net appreciation (depreciation) $ (119) $ (249) $ (3,410) $ 56 $ 23,118
Dividends 391 1,132 1,311 10 14,524
Interest 12 15 43 $ 1,434 4,967
--------- --------- --------- --------- --------- ---------
284 898 (2,056) 66 1,434 42,609
--------- --------- --------- --------- --------- ---------
Contributions:
Employee 429 631 2,917 16,972
Employer 389 543 2,387 15,257
--------- --------- --------- --------- --------- ---------
818 1,174 5,304 32,229
--------- --------- --------- --------- --------- ---------
Total additions 1,102 2,072 3,248 66 1,434 74,838
--------- --------- --------- --------- --------- ---------
Deductions from net assets attributed to:
Distributions to participants
and beneficiaries (124) (188) (4,225) (6) (1,204) (26,211)
Other charges, net (2) (10)
Loans to participants,
net of repayments 39 16 (2) 68
Fund exchanges, net 1,136 683 (2,454) (19)
--------- --------- --------- --------- --------- ---------
Total deductions 1,051 511 (6,681) (25) (1,138) (26,221)
--------- --------- --------- --------- --------- ---------
Increase(decrease) in net
assets during the year 2,153 2,583 (3,433) 41 296 48,617
Net assets available for benefits:
Beginning of year 3,189 4,647 48,136 228 14,647 283,960
--------- --------- --------- --------- --------- ---------
End of year $ 5,342 $ 7,230 $ 44,703 $ 269 $ 14,943 $ 332,577
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
GENERAL
The Phelps Dodge Corporation Savings and Deferred Profit Sharing Plan (the
Plan), a defined contribution plan, was established by Phelps Dodge
Corporation (the Corporation) effective January 1, 1953, for the benefit of
eligible salaried employees (the Participants). Hourly employees became
eligible for the savings feature of the Plan on April 1, 1989.
Subsequently, the Plan name was changed to Phelps Dodge Employee Savings
Plan.
Effective January 1, 1998, assets relating to Accuride employees were
transferred out of the Plan into the Accuride Employee Savings Plan as a
result of the Corporation's sale of Accuride Corporation. Assets from the
Nesor Alloy Corporation Non-Union Employees' Profit Sharing Plan were
merged into the Plan during February 1998.
The Plan is subject to certain provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). A brief description of the Plan is included
in the following paragraphs. Participants should refer to the Plan document
for a complete description of Plan provisions.
ADMINISTRATION
The Plan is sponsored by the Corporation and administered by the Benefits
Administration Committee (the Committee) composed of six employees of the
Corporation who are appointed by the Corporation's Board of Directors.
Effective September 1, 1998, plan assets are held by a trust (the Trust)
administered by UMB, n.a. (the Trustee or UMB) and J.P. Morgan/American
Century Retirement Plan Services (the Recordkeeper) was appointed as the
Recordkeeper of the Trust. Prior to September 1, 1998, plan assets were
held by a trust administered by Marshall and Ilsley Trust Company of
Arizona (the Former Trustee).
Fees and expenses of the Trust, other than brokerage commissions and taxes
paid in connection with security transactions, and other expenses relating
to the administration of the Plan were paid by the Corporation.
INVESTMENT OPTIONS
Participant investments are self-directed. The Trust is comprised of the
following investments at December 31, 1998:
Interest Income Fund - common/collective fund investing in high quality
government and corporate bonds, stable value and guaranteed investment
contracts and money market instruments.
- 6 -
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN (CONTINUED)
Income and Growth Fund - mutual fund investing in stocks of large-sized
companies whose stock is expected to have a higher expected dividend yield
and higher overall return potential than the S&P 500 Index.
Equity Growth Fund - mutual fund investing in common stocks that fund
management believes will have higher overall return potential than the S&P
500 Index.
Enhanced Index Fund - mutual fund investing in approximately 350 large U.S.
companies whose stock is expected to provide a higher total return
potential than the S&P 500 Index.
U.S. Small Company Fund - mutual fund investing in stocks of small-sized
companies and seeks to outperform the Russell 2000 Index.
EuroPacific Growth Fund (previously named the International Equity Fund) -
mutual fund investing in stocks of non-U.S. companies which appear to offer
above average growth potential and whose objective is to provide long-term
growth of capital.
Conservative Investment Portfolio Fund - asset allocation portfolio
composed of 60 percent of the Interest Income Fund and a 40 percent mix of
the plan's mutual funds to provide a conservative investment return.
Moderate Investment Portfolio Fund - asset allocation portfolio composed of
a 60 percent mix of the plan's mutual funds and 40 percent of the Interest
Income Fund to provide a moderate investment return.
Aggressive Investment Portfolio Fund - asset allocation portfolio composed
of an 80 percent mix of the plan's mutual funds and 20 percent of the
Interest Income Fund to provide an aggressive investment return.
Phelps Dodge Common Stock Fund - invests only in common stock of the
Corporation.
Schwab Personal Choice Retirement Fund - enables participants to transfer
funds from the above accounts to a wide range of investments, which
includes mutual funds, over the counter stocks, short-term cash instruments
and other investment options offered by Schwab.
In addition, certain participants hold assets in the Occidental Petroleum
Common Stock Fund as a result of the transfer of assets from the Columbian
Chemicals Company plan. Participant loans are held in a separate Loan Fund.
- 7 -
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN (CONTINUED)
The Trust was comprised of the following investments until August 31, 1998:
Money Market Fund - mutual fund investing in high quality, short-term cash
instruments including certificates of deposit and U.S. Treasury bills
issued by banks, corporations and the U.S. government or its agencies.
Interest Income Fund - fund investing in high quality government, corporate
and mortgage backed debt and other fixed income securities.
Equity Income Fund - mutual fund investing in income-producing stocks with
expected higher returns than the overall market; a portion may be invested
in bonds or other fixed income securities, especially those convertible to
stocks.
Growth Stock Fund - mutual fund investing in stocks of mid-sized companies
whose stock is expected to grow faster than the overall market.
Phelps Dodge Common Stock Fund - invests only in common stock of the
Corporation.
Balanced Fund - mutual fund investing in a mix of stocks, U.S. Treasury
bonds and money market cash instruments; the allocation of assets may shift
substantially from time-to-time.
S&P 500 Index Fund - mutual fund investing in stocks, primarily of the same
companies as in the S&P 500 Index.
International Equity Fund - mutual fund investing in stocks of European and
Pacific Basin companies and government securities of developed and
developing countries.
Small Cap Equity Fund - mutual fund investing in a combination of small and
mid-sized value and growth stocks.
In addition, certain participants hold assets in the Occidental Petroleum
Common Stock Fund as a result of the transfer of assets from the Columbian
Chemicals Company plan. Participant loans are held in a separate Loan Fund.
CONTRIBUTIONS
A profit sharing contribution made for certain salaried and Phelps Dodge
Mercantile hourly employee participants by the Corporation (the Company
Profit Sharing Contribution) is limited to the lesser of: 8 percent of
consolidated net income of the Corporation; 7 1/2 percent of the aggregate
eligible base pay of Participants; or the percentage of the total eligible
pay that would have been allocated to employees who were Participants in
the Plan and eligible for profit sharing on December 31, 1996, determined
under the terms of the Plan on that date. The Company Profit Sharing
Contribution can be made only to the extent that it does not reduce
consolidated net income below $0.50 per common share for such year after
provision for payment of preferred and preference share dividends. Profit
sharing contributions, which are included in Employer
- 8 -
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN (CONTINUED)
Contributions in the Statement of Changes in Net Assets Available for
Benefits, with Fund Information, totaled $9,184,000 for 1998 and $9,867,000
for 1997.
Participants were allowed to make voluntary contributions from 1 percent to
10 percent of their base pay on an after-tax basis (After-tax
Contributions) to the Plan by payroll deduction from July 1, 1986 to March
31, 1989. Effective April 1, 1989, these voluntary After-tax Contributions
were eliminated and Participants became eligible to make pretax
contributions (Pretax Contributions), subject to certain limitations, equal
to 1 percent to 10 percent of their base pay and 1 percent to 15 percent of
their base pay effective September 1, 1998. Pretax Contributions are
eligible for a matching contribution from the Corporation (Company Matching
Contribution) equal to 50 percent of the first 5 percent of the base pay
deferred. Effective September 1, 1998, Participants are eligible to make
contributions to the Plan after three months of service; however, these
contributions are not eligible for Company Matching Contribution until
after one year of service. All contributions are invested in one or more of
the investment funds available within the Plan as elected by participants.
Participants are fully vested in their total account balance.
DISTRIBUTIONS
Participants' interests in the Trust become distributable upon severance of
their service with the Corporation or to their beneficiaries in the event
of their death or upon attaining age 59 1/2. The distribution may be a
single lump sum or a series of substantially equal annual, quarterly or
monthly cash installments beginning no earlier than age 55 and continuing
over a period not to exceed 10 years, at the election of the Participant or
beneficiary. Prior to August 31, 1998, distributions were generally made in
cash, although distributions from the Phelps Dodge Common Stock Fund,
Occidental Petroleum Stock Fund, Equity Income Fund and Growth Stock Fund
were also made in shares. Cash distributions were based upon the market
price of the funds within two days prior to the time of distribution.
Effective September 1, 1998, cash distributions are based upon the
underlying closing price of the funds, except for Phelps Dodge Common Stock
or Occidental Petroleum Stock which are based upon the actual price at
which the stock is liquidated in the market three days prior to the time of
distribution. Distributions of the Phelps Dodge Common Stock Fund and
Occidental Petroleum Stock Fund may be made in shares.
Participants may withdraw their After-tax Contributions and earnings
thereon at any time. The Plan also provides, with certain limitations, for
hardship withdrawals of employee Pretax, Company Matching and Company
Profit Sharing Contributions; however, earnings on any of these
contributions are ineligible for hardship withdrawal. Hardship withdrawals
are not granted unless other financial resources are not reasonably
available, including after-tax savings or a loan from the Plan. All
withdrawals and distributions are made in accordance with procedures
outlined in the Plan document.
- 9 -
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN (CONTINUED)
LOANS
Participants may borrow amounts as provided in the Plan. Loans are
repayable over a maximum of 5 years with the exception of loans for the
purchase of a primary residence which may extend to 15 years. The minimum
loan is $1,000 and the maximum loan is an amount equal to $50,000 minus the
Participant's highest outstanding loan balance during the past 12 months,
limited to 50 percent of the Participant's vested account balance. All
loans bear the Former Trustee's prime interest rate plus 2 percent at the
end of the month preceding the month in which the loan is applied for.
Effective September 1, 1998, loans bear the prime interest rate as quoted
in the Wall Street Journal plus 2 percent as of the first of each month.
The prime rate at December 31, 1998 was 7.75 percent. Loans are repaid by
payroll deduction and interest is credited to Participant accounts. Loans
are secured by the Participant's previous contributions to the Plan.
PLAN TERMINATION
The Plan may be amended or terminated at any time by the Corporation. No
such action may cause any portion of the Trust to revert to the Corporation
or to be used or diverted for any purpose other than for the exclusive
benefit of Participants or their beneficiaries.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are prepared on the accrual basis of
accounting. Plan investments, other than Guaranteed Investment Contracts
(GIC's), are presented at fair value. The fair values of common stock,
registered investment companies and common/collective fund shares are based
upon the closing market price on the valuation date. The GIC's are recorded
at contract value, which approximates fair value. Contract value is based
upon the GIC's respective face values plus accrued interest on the
valuation date. Participant loans are valued at amounts advanced to
participants less principal payments received.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
-10-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Security transactions are recorded on a trade date basis. Expenses paid by
the Plan in connection with such transactions include brokerage commissions
and taxes which are included in the cost of securities purchased and
deducted from the proceeds of securities sold. The net appreciation
(depreciation) in the fair value of the Plan's investments consists of the
realized gains (losses) and the unrealized appreciation (depreciation) on
those investments. Dividend income is recognized on the ex-dividend date.
Interest income is recognized as earned. Employer and employee
contributions are recognized on the accrual basis.
Benefit obligations for persons who have withdrawn from participation in
the Plan are not recorded as liabilities in the accompanying financial
statements. There were no benefit obligations outstanding at December 31,
1998 and $3,550,000 outstanding at December 31, 1997.
For comparative purposes, certain prior year amounts have been reclassified
to conform with the current year presentation.
3. INVESTMENTS
The following table presents the current value of investments with separate
identification of individual investments which represent 5 percent or more
of net assets:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
---------- ----------
(in thousands)
<S> <C> <C>
J.P. Morgan Interest Income Fund $ 53,870*
American Century Income & Growth Fund 56,079*
American Century Equity Growth Fund 75,215*
J.P. Morgan Enhanced Index Fund 26,195*
Moderate Investment Portfolio Fund 21,505*
Aggressive Investment Portfolio Fund 21,617*
Barclays Money Market Fund I $ 34,698*
Commonwealth Synthetic GIC, 6.04%
open maturity rate resets calendar quarter 33,908*
Fidelity Equity Income Fund 69,032*
Fidelity Magellan Fund 85,400*
Phelps Dodge Corporation Common Stock 33,263* 42,074*
Loans to participants, 8%-12.5%,
maturing through December 2013 17,547* 15,551*
Other 37,629 40,294
---------- ----------
$ 342,920 $ 320,957
========== ==========
</TABLE>
* Represents 5 percent or more of net assets at the end of the respective
Plan year.
-11-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
4. UNITIZED FUNDS
Prior to the transfer of funds to UMB in September 1998, several investment
funds were unitized to allow the Former Trustee to participate in late day
trading. Unitization requires the establishment and maintenance of a cash
reserve to settle the sale of the units with cash from the reserve rather
than having to wait at least one business day for the settlement of the
underlying mutual fund as would normally be the case without unitization.
The value of the fund determined using the number of units and net asset
value per unit may not agree to the statement of net assets available for
benefits, with fund information, due to pending trades and in-kind
distributions. There are no unitized funds at December 31, 1998.
The following represents the number of units and the net asset value per
unit for all unitized funds at December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF UNITS NET ASSET VALUE PER UNIT
--------------- ------------------------
<S> <C> <C>
Interest Income Fund 3,982,513 $ 11.187
Balanced Fund 303,009 13.097
S&P 500 Index Fund 847,004 15.097
International Equity Fund 418,361 12.005
Small Cap Equity Fund 514,633 13.143
Phelps Dodge Common Stock Fund 654,674 65.365
</TABLE>
-12-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
5. RELATED PARTY TRANSACTIONS
The Trustee invests in the Corporation's common stock in accordance with
the provisions of the Plan. The following is a summary of transactions in
the Corporation's common stock:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997
------- -------
(in thousands)
<S> <C> <C>
Cost of shares purchased $13,344 $16,215
Number of shares purchased 226 217
Proceeds from shares sold $10,109 $15,046
Number of shares sold 168 197
Value of shares distributed $ 4,973 $ 1,271
Number of shares distributed 82 20
</TABLE>
Certain Plan investments are shares of Registered Investment Companies and
Common/ Collective Trusts managed by American Century Investments and J.P.
Morgan Investment Management. J.P. Morgan/American Century Retirement Plan
Services, an affiliate, is the Recordkeeper as defined by the Plan and,
therefore, these transactions qualify as party-in-interest.
6. TAX STATUS
The Plan received a determination letter from the Internal Revenue Service
(IRS) dated September 2, 1998, which stated that the Plan met the
requirements of Section 401(a) of the Internal Revenue Code and that the
earnings of the Trust are exempt from taxation under Section 501(a) of the
Code. The Plan has been amended and restated since receiving the
determination letter, and will file for a redetermination by the IRS that
the Plan, as amended and restated, continues to satisfy such requirements.
The Committee believes that the Plan, as amended and restated and as
operated, continues to satisfy IRS requirements for tax exemption.
-13-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SCHEDULE I
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of investment
including maturity date, rate
of interest, collateral,
Party-in- Identity of issue, borrower, par or maturity value,
interest lessor or similar party or number of shares Cost Current Value
- --------- -------------------------------------- ----------------------------- --------- -------------
<S> <C> <C> <C> <C>
CASH AND SHORT-TERM INVESTMENTS
Cash 5,883 $ 5,883 $ 5,883
Schwab Value Advantage Money Fund 65,167 65,167 65,167
Schwab U.S. Treasury Money Fund 638,869 638,869 638,869
Schwab Money Market Fund 279 279 279
---------- -----------
Total Cash and Short-Term Investments 710,198 710,198
COMMON/COLLECTIVE FUNDS:
* J.P. Morgan Enhanced Index Fund 1,856,691 31,708,408 39,753,057
* J.P. Morgan Interest Income Fund 64,472,301 64,472,301 64,472,301
---------- -----------
Total Common/Collective Funds 96,180,709 104,225,358
COMMON STOCKS:
A.O. Tatneft Sponsored 1,000 2,405 1,937
Action Performance Co. 40 1,195 1,415
Alaska Air Group Inc. 500 19,717 22,125
Alba-Waldensian Inc. 50 1,052 1,268
Alydaar Software Corp. 9,500 70,004 78,375
America Online Inc., Del. 1,520 130,353 235,790
American West Holding CP CL B 150 2,017 2,550
Applied Cellular Tech., Inc. 50 220 177
Aztar Corp. 400 2,030 2,025
Barnes & Noble 50 1,461 2,125
Bear Stearns Cos Inc. 100 4,305 3,743
Bellsouth Corporation 124 4,984 6,185
Beyond.Com Corp. 150 4,024 3,112
Biomerica Inc. 500 545 500
Books A Million 70 1,172 910
Cameco Corp. 300 5,527 5,343
Caterpillar Inc. 9 448 413
CD Now Inc. 290 6,190 5,220
Cendant Corp. 9,350 141,826 180,571
Charles Schwab Corp. 50 2,455 2,808
Chase Manhattan Corp. 200 12,929 14,200
Chesapeake Energy Corp. 400 589 375
Ciena Corp. 800 16,241 11,700
Cisco Systems Inc. 400 30,613 37,125
Citigroup Inc. 340 15,964 16,893
Coca Cola Company 70 5,022 4,696
Compaq Computer Corp. 2,800 106,239 117,600
Computer Literacy Inc. 100 2,142 1,344
</TABLE>
-14-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SCHEDULE I
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of investment
including maturity date, rate
of interest, collateral,
Party-in- Identity of issue, borrower, par or maturity value,
interest lessor or similar party or number of shares Cost Current Value
- --------- -------------------------------------- ----------------------------- --------- -------------
<S> <C> <C> <C> <C>
COMMON STOCKS: (CONTINUED)
Core Laboratories N.V. 400 $ 6,975 $ 7,650
Countrywide Credit Inds. 100 4,299 5,019
Coyote Network Sys. Inc. 700 5,455 5,163
Cracker Barrel Old Country Store 30 705 699
Cree Research Inc. 50 2,114 2,394
Cybercash Inc. 200 3,580 3,000
Dell Computer Corp. 1,200 68,886 87,825
Delta Air Lines Inc. 100 5,305 5,200
Detour Magazine Inc. 1,500 551 609
Dial Corporation New 100 2,667 2,888
Diamond Offshore Drilling 400 8,705 9,475
Diamonds Trust Series I 501 42,798 45,876
Disney Holding Co. 100 3,105 3,000
Du Pont E I De Nemour & Co. 8 502 427
EMC Corp. Mass. 400 31,135 34,000
Egghead.Com Inc. 500 11,434 10,406
Espirito Santo Financial ADR 500 8,981 9,781
Excite Inc. 125 6,680 5,258
Fairchild Corp. Class A 200 3,230 3,150
Galtech Semi Material 500 85 43
General Electric Company 100 8,624 10,200
General Motors Corp. 6 416 432
Genzyme Corp. General 200 9,192 9,950
Global Games Corp. 2,300 630 437
Hilton Hotels Corp. 650 12,368 12,431
Home Depot Inc. 842 42,222 51,522
I Link Incorporated 350 785 744
Indo Pacific Energy Ltd. F 550 579 241
Indymac Mortgage Holdings 1,000 12,180 10,563
Internet America Inc. 452 14,268 13,108
International Speedway CL A 40 1,240 1,620
International Uranium Corp. 10,000 3,891 3,500
Iridium World Comm. CL AF 33 1,560 1,306
Kaydon Corporation 300 11,430 12,019
Kentex Energy Inc. 500 606 80
Kismet Energy Corp. 200 0 200
LSI Logic Corp. 600 10,400 9,675
Lehman Brothers Holdings Inc. 200 10,780 8,813
Lucent Technoligies Inc. 500 40,176 54,969
MBT International Inc. 1,000 1,905 7,625
Market Guide Inc. 200 2,430 2,375
MCI Worldcom Inc. 300 19,399 21,525
</TABLE>
-15-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SCHEDULE I
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of investment
including maturity date, rate
of interest, collateral,
Party-in- Identity of issue, borrower, par or maturity value,
interest lessor or similar party or number of shares Cost Current Value
- --------- -------------------------------------- ----------------------------- --------- -------------
<S> <C> <C> <C> <C>
COMMON STOCKS: (CONTINUED)
Melita International Corp. 300 2,452 6,300
MicroAge Inc. 100 1,767 1,538
Mirage Resorts Inc. 200 3,180 2,988
Monsanto Company 200 7,555 9,500
National Semiconductor Corp. 1,300 18,685 17,550
Netscape Communications 550 34,419 33,413
Northland Cranberries A 50 655 452
Occidental Pete Corp. 400 7,903 6,750
Organogenesis Inc. 200 3,030 2,050
Pairgain Technologies 200 1,686 1,538
Patterson Energy Inc. 100 495 406
Peoplesoft Inc. 700 14,985 13,256
Pfizer Incorporated 515 55,844 64,380
Philip Morris COS Inc. 8 443 428
Pogo Producing Co. 400 5,200 5,200
Poore Brothers Inc. 1,200 1,086 713
Premisys Communcations 800 5,380 7,350
Presstek Inc. 400 3,025 2,725
QAD Inc. 600 2,580 2,138
Recoton Corp. 500 8,530 8,969
Rostelecom Long 600 2,280 2,513
Royal Carribean Cruises Ltd. 251 5,615 9,273
SPDR Trust Unit SR 1 180 19,852 22,196
Safeway Inc. 1,358 63,018 82,753
Santa Fe International Corp. 300 3,949 4,350
Sara Lee Corp. 40 1,202 1,128
Schlumberger Ltd. 100 4,442 4,638
Scientific Atlanta Inc. 1,500 31,501 34,219
Shaman Pharmaceuticals 3,500 6,656 6,672
Singer Company NV 1,000 4,030 3,938
Starwood Hotels & Resorts 400 11,248 9,075
Sun Microsystems Inc. 200 14,592 17,125
TCI Satellite Ent CL A 2,000 1,124 2,875
Teleglobe Inc. 66 1,938 2,376
Tellabs Inc. 200 13,457 13,713
Tilden Associates Inc. 978 702 734
Trans Orient Pete Ltd. 700 1,357 941
TransTexas Gas Corp. 406 1,324 1,066
Union Carbide Corp. 8 345 342
United Healthcare Corp. 100 4,980 4,306
</TABLE>
-16-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SCHEDULE I
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of investment
including maturity date, rate
of interest, collateral,
Party-in- Identity of issue, borrower, par or maturity value,
interest lessor or similar party or number of shares Cost Current Value
- --------- -------------------------------------- ----------------------------- --------- -------------
<S> <C> <C> <C> <C>
COMMON STOCKS: (CONTINUED)
U.S. Airways Group Inc. 100 5,036 5,200
Viasat Inc. 100 1,030 1,006
Vista Gold Corporation 500 137 78
Vocaltec Commun. 100 1,317 1,125
Wal-Mart Stores Inc. 185 12,731 15,066
Watson Pharmaceuticals 100 5,061 6,288
Worldwide Web Netwrx Corp. 500 464 328
---------- -----------
Total Common Stocks 1,412,230 1,676,691
REGISTERED INVESTMENT COMPANIES:
* American Century Equity Growth Fund 3,612,971 66,940,340 82,041,937
* American Century Income & Growth Fund 2,149,537 52,833,552 62,865,313
American Europacific Fund 375,045 9,338,739 10,644,384
Baron Asset Fund 70 3,303 3,517
Dodge & Cox Balanced Fund 16 1,051 1,013
Dreyfus Aggressive Value Fund 224 5,234 5,544
Fidelity Contrafund II 433 4,327 4,822
Fidelity Equity Income Fund 53,481 2,417,841 2,968,218
Fidelity Magellan Fund 67,987 6,222,487 8,188,326
Fidelity Select Technology Fund 19 1,304 1,474
Janus Special Situations Fund 2,537 36,002 44,176
Janus Worldwide Fund 234 9,534 11,105
* J.P. Morgan Pierpont U.S. Small Company Fund 1,045,531 11,825,166 12,677,677
Nicholas II Fund 126 4,765 4,547
Oakmark Fund - Harris Assoc.
Investment Trust 196 7,001 7,038
PBHG Mid-Cap Value Fund 393 5,000 6,148
Rydes OTC Fund 224 6,898 9,263
Rydes Series Nova Fund 184 5,074 6,104
Schwab 1000 Fund 31 1,000 1,043
Schwab S&P 500 Inv. Shares 627 10,619 11,888
Scudder Greater Europe Growth 164 4,010 4,345
Vanguard Index Trust 500 1,121 127,346 127,702
Warburg Pincus Global Telecommunications 211 5,047 6,025
Weitz Value Portfolio 292 8,321 8,479
----------- -----------
Total Registered Investment Companies 149,823,961 179,650,088
</TABLE>
-17-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES SCHEDULE I
DECEMBER 31, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of investment
including maturity date, rate
of interest, collateral,
Party-in- Identity of issue, borrower, par or maturity value,
interest lessor or similar party or number of shares Cost Current Value
- --------- ------------------------------------------ ------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
INSURANCE COMPANY GENERAL ACCOUNT:
Principal Life Insurance Co. - #4-09709 5.06% matures December 31, 1999 $ 1,598,346 $ 1,598,346
Sun Life of Canada - #S-00864-G-001 5.74% matures June 2000 4,107,128 4,107,128
------------ ------------
Total Insurance Company General Account 5,705,474 5,705,474
EMPLOYER STOCK
Phelps Dodge 652,080 35,594,003 33,262,544
Occidental Petroleum 8,147 172,519 142,094
------------ -------------
Total Employer Stock 35,766,522 33,404,638
PARTICIPANT LOANS
Loans to various participants 8%-12.5% maturing through 2013 -- 17,547,312
------------ -------------
Total Assets Held for Investment $289,599,094 $ 342,919,759
============ =============
</TABLE>
-18-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27B - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS SCHEDULE II
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT RECEIVED DURING
ORIGINAL REPORTING YEAR UNPAID
IDENTITY AND ADDRESS AMOUNT OF ---------------------- BALANCE AT
OF OBLIGOR LOAN PRINCIPAL INTEREST END OF YEAR
---------- ---- --------- -------- -----------
<S> <C> <C> <C> <C>
Pam Arrellen 1,000 18 3 790
2600 N. Central Ave.
Phoenix, AZ 85004-3104
Ramon Madrid Jr. 6,700 83 49 6,180
2600 N. Central
Phoenix, AZ 85004-3014
DETAILED DESCRIPTION OF LOAN INCLUDING DATES
OF MAKING AND MATURITY, INTEREST RATE, THE
TYPE AND VALUE OF COLLATERAL, ANY AMOUNT OVERDUE
IDENTITY AND ADDRESS RENEGOTIATION OF THE LOAN AND THE TERMS OF THE -------------------
OF OBLIGOR RENEGOATION AND OTHER MATERIAL ITEMS PRINCIPAL INTEREST
---------- ------------------------------------ --------- --------
<S> <C> <C> <C>
Pam Arrellen Promissory note dated 11/15/96 790 --
2600 N. Central Ave. 10.25%, bi-weekly $21.39
Phoenix, AZ 85004-3104
Ramon Madrid Jr. Promissory note dated 12/15/96 6,180 --
2600 N. Central 10.25%, bi-weekly $66.04
Phoenix, AZ 85004-3014
</TABLE>
-19-
<PAGE>
PHELPS DODGE EMPLOYEE SAVINGS PLAN SUPPLEMENTAL INFORMATION
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS* SCHEDULE III
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IDENTITY OF PARTY LEASE
INVOLVED DESCRIPTION OF ASSET PURCHASE PRICE SELLING PRICE RENTAL
- ----------------- ------------------------ -------------- ------------- ------
<S> <C> <C> <C> <C>
M & I Money Market Fund $16,678,783
M & I Money Market Fund $ 51,162,488
M & I Interest Income Fund 21,709,466
M & I Interest Income Fund 25,405,288
M & I Equity Income Fund 12,916,587
M & I Equity Income Fund 53,599,152
M & I Equity Income Fund 19,468,128
M & I Growth Stock Fund 17,931,612
M & I Growth Stock Fund 71,468,977
M & I Growth Stock Fund 22,872,245
M & I S&P 500 Index Fund 15,036,872
M & I S&P 500 Index Fund 16,814,434
J.P. Morgan Enhanced Index Fund 37,981,516
J.P. Morgan Enhanced Index Fund 6,185,236
J.P. Morgan Interest Income Fund 47,482,441
J.P. Morgan Interest Income Fund 14,515,424
American Century Equity Growth Fund 74,972,484
American Century Equity Growth Fund 8,330,066
American Century Income & Growth Fund 62,276,304
American Century Income & Growth Fund 9,641,310
CURRENT
EXPENSE VALUE ON
IDENTITY OF PARTY INCURRED WITH TRANSACTION NET GAIN
INVOLVED DESCRIPTION OF ASSET TRANSACTION COST OF ASSET DATE (LOSS)
- ----------------- ------------------------ ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
M & I Money Market Fund $ 16,678,783 $ 16,678,783
M & I Money Market Fund 51,162,488 51,162,488
M & I Interest Income Fund 21,709,466 21,709,466
M & I Interest Income Fund 23,308,533 25,405,288 $2,096,755
M & I Equity Income Fund 12,916,587 12,916,587
M & I Equity Income Fund 53,168,639 53,599,152 430,513
M & I Equity Income Fund 15,489,311 19,468,128 3,978,817
M & I Growth Stock Fund 17,931,612 17,931,612
M & I Growth Stock Fund 75,356,746 71,468,977 (3,887,769)
M & I Growth Stock Fund 19,767,133 22,872,245 3,105,112
M & I S&P 500 Index Fund 15,036,872 15,036,872
M & I S&P 500 Index Fund 14,834,255 16,814,434 1,980,179
J.P. Morgan Enhanced Index Fund 37,981,516 37,981,516
J.P. Morgan Enhanced Index Fund 5,906,509 6,185,236 278,727
J.P. Morgan Interest Income Fund 47,482,441 47,482,441
J.P. Morgan Interest Income Fund 14,515,424 14,515,424
American Century Equity Growth Fund 74,972,484 74,972,484
American Century Equity Growth Fund 7,844,169 8,330,066 485,897
American Century Income & Growth Fund 62,276,304 62,276,304
American Century Income & Growth Fund 9,250,036 9,641,310 391,274
</TABLE>
* Transactions or series of transactions in excess of 5 percent of the current
value of the Plan assets as of December 31, 1997 as defined in Section
2520.103- 6 of the Department of Labor Rules and Regulations for Reporting
and Disclosure under ERISA.
-20-
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-26442) of Phelps Dodge Corporation of our report
dated June 23, 1999 relating to the financial statements, which appears in this
Form 11-K.
PricewaterhouseCoopers LLP
Phoenix, Arizona
June 25, 1999
