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, 1999
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
CYPRUS AMAX MINERALS COMPANY
THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES
PHELPS DODGE CORPORATION
2600 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85004-3089
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees
(the "Plan") at December 31, 1999 and 1998, and the changes in net assets
available for benefits for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Plan's management; 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 auditing standards
generally accepted in the United States, 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
management, 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 supplemental schedules of assets held
for investment purposes at end of year and of reportable transactions are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopers LLP
July 12, 2000
Phoenix, Arizona
<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1999 1998
---------- ----------
ASSETS
Investments (note 3) $4,955,642 $3,722,935
Receivables:
Employer contributions 6,063 139
Participant contributions and loan repayments 22,154 28,862
---------- ----------
Total assets 4,983,859 3,751,936
---------- ----------
Net assets available for benefits $4,983,859 $3,751,936
========== ==========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
Additions to net assets attributable to:
Investment income:
Interest and dividends $ 249,617
Net appreciation in fair value of investments (Note 3) 881,486
----------
Total investment income 1,131,103
Employer contributions 75,908
Participant contributions and loan repayments 275,827
----------
Total additions 1,482,838
----------
Decrease in net assets attributable to:
Benefits paid to participants 250,915
----------
Total deduction 250,915
----------
Net increase 1,231,923
Net assets available for benefits, at beginning of year 3,751,936
----------
Net assets available for benefits, at end of year $4,983,859
==========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Cyprus Amax Minerals Company ("Cyprus
Amax") Thrift Plan for Bargaining Unit Employees (the "Plan" or the
"Bargaining Plan") provides only general information. Refer to the Plan
document for a more complete description of the Plan's provisions.
GENERAL
The Plan was established by AMAX Inc. ("AMAX") in 1965 for the benefit of
certain collective bargaining unit hourly employees of AMAX, its divisions
and its participating subsidiaries, who have completed one year of service
and have attained the age of 18 ("Eligible Employees" or "Participants").
Cyprus Minerals Company ("Cyprus") and AMAX merged in November 1993,
forming Cyprus Amax Minerals Company ("Cyprus Amax" or the "Company").
Following the merger, the name of the Bargaining Plan was changed to the
Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees.
Currently, the Plan consists solely of Amax Metals Recovery employees. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
Phelps Dodge Corporation ("Phelps Dodge") became the sponsor of the Plan on
October 16, 1999, following its acquisition of Cyprus Amax.
As a result of the acquisition of Cyprus Amax by Phelps Dodge, all shares
of Cyprus Amax stock held on October 16, 1999 were converted on November 5
and December 3, 1999 into Phelps Dodge common stock. On the November 5,
1999 conversion date, participants had the option of converting each share
of Cyprus Amax stock into .35 shares of Phelps Dodge common stock or
receiving $13.488782 in cash per share of Cyprus Amax stock plus .1201522
shares of Phelps Dodge common stock. If the latter option was selected the
cash portion was deposited into the Prime Reserve Fund. On the December 3,
1999 conversion date, participants received .35 shares of Phelps Dodge
common stock for each share of Cyprus Amax stock. All Phelps Dodge common
stock is held in the common stock fund.
ADMINISTRATION
The Plan is administered by the Cyprus Amax Minerals Corporation Benefits
Committee (the "Plan Administrator"), a committee appointed by Phelps
Dodge's Board of Directors consisting of three Phelps Dodge officers. Prior
to October 16, 1999, the Plan was administered by the Cyprus Amax Minerals
Company Benefits Committee consisting of Cyprus Amax officers. T. Rowe
Price Retirement Plan Services, Inc. serves as the Plan's recordkeeper and
T. Rowe Price Trust Company serves as the trustee. During 1999, Plan
administrative expenses were paid by Cyprus Amax and Phelps Dodge.
CONTRIBUTIONS
Participants may contribute a basic amount of 1 percent to 16 percent of
compensation to the Plan. These basic contributions are made on an
after-tax basis, a tax-deferred basis, or a combination of the two. The
Company contributes an amount to the Common Stock Fund equal to 50 percent
of the first 6 percent of each participant's contribution. Participant
rollover contributions are permitted provided all Plan and legal
requirements are satisfied.
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN (CONTINUED)
VESTING
Participants are immediately vested in their employee contributions, the
earnings attributable to those contributions, and the earnings attributable
to employer contributions. Participants are vested with respect to employer
matching contributions to the Plan at a rate of 25 percent after two years
of service, 50 percent after three years of service, 75 percent after four
years of service, and 100 percent after five years of service. Participants
also become fully vested in employer contributions upon their death,
attainment of age 65, retirement, total and permanent disability, permanent
layoff, change in control, and/or Plan termination.
FORFEITURES
Participants who terminate employment before becoming fully vested forfeit
the nonvested portion of their employer contributions. Amounts forfeited by
Participants are used to reduce the contributions otherwise required by the
Plan to be made by the Company to the Trustee.
LOANS
Participants may borrow from their Plan accounts. Loans are paid in the
form of cash and may not exceed a Participant's vested account balance
within specified legal limits. Loan interest rates are based on the prime
rate plus one percent as determined on the first business day of the month
preceding the month in which a Participant's written loan request is
received by the Plan Administrator. Loan repayment terms vary from a
minimum of six months to a maximum of five years. Repayment terms for loans
used to purchase a participant's principal residence may be extended at the
discretion of the Plan Administrator.
Loan repayments are made regularly through payroll deductions or, for
Participants not receiving a paycheck (e.g., on leave of absence), can be
delivered regularly to the Plan Administrator. A Participant may prepay a
one-time single sum of all of the outstanding loan balance.
DISTRIBUTIONS
Participants may withdraw all or a portion of vested contributions subject
to certain conditions as specified in the Plan document. Upon retirement,
Participants may elect to receive distribution of their accounts as a lump
sum distribution or as an annuity ranging in life from two to ten years.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities, such as those regarding fair value. Actual results could
differ from those estimates.
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
VALUATION OF ASSETS AND INCOME RECOGNITION
Phelps Dodge and the former Cyprus Amax common stock is valued at fair
market value based on the quoted market price.
Participant loans are valued at cost, which approximates fair value.
The remaining investments are valued at the net asset value of shares held
by the Plan at year end.
Transfers of assets into the Plan are made at fair market value. Assets
transferred out of the Plan are reported at market value with the
difference between cost and market reported as realized gains or losses.
Purchase and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior year financial
statements to conform to the current year presentation.
3. INVESTMENTS
INVESTMENT OPTIONS
On December 22, 1999, the Plan was amended to permit the Plan to hold
Phelps Dodge common stock. Participants may elect to invest their
contributions to the Plan in Phelps Dodge common stock or a variety of T.
Rowe Price funds. Effective December 2, 1999, all Company contributions are
made in cash to be invested in Phelps Dodge common stock. Prior to December
2, 1999, Company contributions were made in cash to be invested in Cyprus
Amax common stock. Shares of Phelps Dodge and formerly of Cyprus Amax
common stock purchased by employer contributions may not be transferred or
sold until properly withdrawn in accordance with Plan provisions to the
extent that the participant's employer contribution account is vested. Upon
distribution, these shares are unrestricted and may be freely traded.
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
3. INVESTMENTS (CONTINUED)
The following presents investments that represent 5 percent or more of the
Plan's net assets at fair value.
December 31,
------------------------
1999 1998
---------- ----------
Common Stock Fund
Phelps Dodge Corporation common stock,
6,859 and 0 shares, respectively $ 462,148* $ --
Cyprus Amax Minerals Company common stock,
0 and 31,848 shares, respectively -- 318,887*
T. Rowe Price
Stable Value Fund, 1,129,972.07 and 947,135.34
shares, respectively 1,129,972 947,135
New Horizons Fund, 8,270.539 and 9,245.672
shares, respectively 227,688 215,794
Prime Reserve Fund, 265,384.27 and 28,431.57
shares, respectively 265,384 28,432
Equity Index Fund, 39,135.925 and 36,951.646
shares, respectively 1,548,218 1,233,446
Science and Technology Fund, 9,636.604 and
5,050.895 shares, respectively 613,948 190,267
Equity Income Fund, 12,667.425 and 12,902.152
shares, respectively 314,279 339,585
* Nonparticipant - directed
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
3. INVESTMENTS (CONTINUED)
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $881,486 as follows:
Mutual funds $488,866
Common stock 392,620
--------
$881,486
========
4. NONPARTICIPANT - DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant - directed investments
is as follows:
DECEMBER 31,
---------------------
1999 1998
--------- --------
Net assets:
Common stock:
Phelps Dodge $ -- $318,887
Cyprus Amax 462,148 --
--------- --------
$ 462,148 $318,887
========= ========
Changes in net assets:
Contributions $ 78,203
Dividends 11,043
Net appreciation 392,620
Loan repayments 748
Benefits paid to participants (39,636)
Transfers, net (299,717)
---------
$ 143,261
=========
5. TAX STATUS
Cyprus Amax received a favorable determination letter dated September 11,
1995, from the Internal Revenue Service as to the qualified status of the
Plan. The Plan has been amended since receiving the determination letter.
However, the Plan Administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Accordingly, no
provision for federal or state income taxes has been included in the Plan's
financial statements. The Plan is now within its remedial amendment period
for recent changes in applicable law (e.g., Small Business Job Protection
Act of 1996, Taxpayer Relief Act of 1997, Retirement Protection Act of 1994
("GATT"), and the Uniformed Services Employment and Reemployment Rights Act
of 1994) and that it is anticipated that the Plan will be further amended
to the extent necessary to comply with such laws and will be submitted on a
timely basis to the IRS for a determination letter as to the Plan's
continued tax qualified status.
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
Gains (losses) on the sale of investments as reported in the statement of
changes in net assets available for benefits have been determined on a
participant level using the average cost method. For purposes of the
Department of Labor's Form 5500, gains (losses) on such sales have been
calculated based upon the market value at the beginning of the Plan year in
accordance with the requirements of the Form 5500.
In addition, in accordance with guidance issued by the American Institute
of Certified Public Accountants, the Plan does not recognize as a liability
amounts elected to be withdrawn but not yet distributed as of year end.
However, such amounts must be included on the Form 5500. As of December 31,
1999 and 1998 the Plan had no benefits payable due to timing of the
distributions by the Trustee.
7. TRANSACTIONS WITH PARTIES IN INTEREST
Certain Plan investments are shares of mutual funds managed by T. Rowe
Price. T. Rowe Price is the Plan trustee and recordkeeper as defined by the
Plan. Therefore, these transactions qualify as party-in-interest.
Phelps Dodge, as Plan sponsor, is also a party-in-interest. Investments
include shares of Phelps Dodge common stock. Purchases of $400,695 and
sales of $1,143 were made during 1999. Prior to October 16, 1999, Cyprus
Amax was Plan sponsor and was therefore a party-in-interest. Investments
included shares of Cyprus Amax common stock. Purchases of $80,039 and sales
of $728,538 were made during 1999. The market value of the Phelps Dodge
common stock was $67.375 per share as of December 31, 1999. The market
value of the Cyprus Amax common stock was $10.00 per share as of December
31, 1998.
8. PLAN TERMINATION
Although it has not expressed any intent to do so, Phelps Dodge has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, Participants would become 100 percent vested in their employer
contributions.
9. SUBSEQUENT EVENTS
Amax Metals Recovery ceased operations in January, 2000. As such, Phelps
Dodge will be liquidating its interest in Amax Metals Recovery. However,
the Participants in the Plan will be allowed to maintain their investments
in the Plan and pay off any loans outstanding. Phelps Dodge currently does
not intend to terminate the Plan.
-9-
<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PARTY IN IDENTITY OF ISSUE, BORROWER CURRENT
INTEREST LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
-------- --------------------------- ------------------------- ----------- -----------
<S> <C> <C> <C> <C>
Yes Phelps Dodge Corporation Phelps Dodge Corporation
common stock
No par value $ 399,859 $ 462,148
Yes T. Rowe Price Prime Reserve Fund 265,384 265,384
Yes T. Rowe Price Equity Index Fund 891,084 1,548,217
Yes T. Rowe Price International Stock Fund 102,009 138,256
Yes T. Rowe Price Spectrum Income Fund 9,409 8,901
Yes T. Rowe Price Stable Value Fund 1,129,972 1,129,972
Yes T. Rowe Price New Horizons Fund 192,503 227,688
Yes T. Rowe Price Science & Technology Fund 409,389 613,948
Yes T. Rowe Price Equity Income Fund 310,781 314,279
Yes T. Rowe Price Spectrum Growth Fund 44,050 47,640
Yes Participant loans Interest rate
6% - 11.5%, with maturity
dates through 2002 -- 199,209
-----------
$ 4,955,642
===========
</TABLE>
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<PAGE>
CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR
BARGAINING UNIT EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS (a)
FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF PURCHASE SELLING LEASE
ISSUER DESCRIPTION OF ASSETS PURCHASES SALES PRICE PRICE RENTAL
------ --------------------- --------- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Single Transactions
----------------------
T. Rowe Price Phelps Dodge Common Stock 1 $ 189,412
1 202,866
Cyprus Amax Common Stock 1 $ 418,717
1 202,866
Prime Reserve Fund 1 229,305
Series of Transactions
----------------------
T. Rowe Price Phelps Dodge Common Stock 4 400,695
2 1,143
Cyprus Amax Common Stock 26 80,039
28 728,538
CURRENT
EXPENSE VALUE OF
INCURRED ASSET ON NET GAIN
WITH COST OF TRANSACTION OR (LOSS)
ISSUER DESCRIPTION OF ASSETS TRANSACTION ASSET DATE ON SALES
------ --------------------- ----------- ----- ---- --------
Single Transactions
----------------------
T. Rowe Price Phelps Dodge Common Stock $ 189,412 $ 189,412
202,866 202,866
Cyprus Amax Common Stock 418,717 418,717 $ --
202,866 202,866 --
Prime Reserve Fund 229,305 229,305
Series of Transactions
----------------------
T. Rowe Price Phelps Dodge Common Stock 400,695 400,695
836 1,143 307
Cyprus Amax Common Stock 80,039 80,039
761,234 728,538 (32,696)
</TABLE>
(a) Transactions or series or transactions in excess of 5 percent of the
current value of the Plan's assets as of January 1, 1999 as defined in
Section 2520.103-6 of the Department of Labor's Rules and Regulations for
Reporting and Disclosure under ERISA.
-11-
<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.
Cyprus Amax Minerals Company
Thrift Plan for Bargaining
Unit Employees
Date: July 13, 2000 By: /s/ David L. Pulatie
------------------------------------
David L. Pulatie, Chairman Benefits
Administration Committee
