<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-12374
----------------
(LOGO) ALUMAX INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 13-2762395
- -------------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5655 Peachtree Parkway, Norcross, Georgia 30092
- -------------------------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 246-6600
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
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 shares of common stock of registrant outstanding at October 31, 1996:
44,998,680
-1-
<PAGE> 2
Part I. Financial Information
Item 1. Financial Statements
ALUMAX INC.
CONDENSED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ------------------------
1996 1995 1996 1995
--------- --------- --------- ----------
(In Millions, Except Per Share Amounts)
<S> <C> <C> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . . . . . $ 809.1 $ 767.7 $ 2,463.1 $ 2,187.5
--------- --------- ---------- ----------
Cost and expenses:
Cost of goods sold . . . . . . . . . . . . . . . 657.9 592.4 1,970.2 1,714.0
Selling and general . . . . . . . . . . . . . . 70.1 56.6 203.4 168.6
Depreciation and amortization . . . . . . . . . 36.7 27.7 105.7 85.9
--------- --------- ---------- ----------
764.7 676.7 2,279.3 1,968.5
--------- --------- ---------- ----------
EARNINGS FROM OPERATIONS . . . . . . . . . . . . . . 44.4 91.0 183.8 219.0
Gain on sales of assets . . . . . . . . . . . . . . . 71.7 - 242.9 128.8
Other income (expense), net . . . . . . . . . . . . . (1.9) (2.2) 13.0 5.6
Interest expense, net . . . . . . . . . . . . . . . . (15.8) (15.1) (49.9) (52.0)
--------- --------- ---------- ----------
EARNINGS BEFORE INCOME TAXES . . . . . . . . . . . . 98.4 73.7 389.8 301.4
Income tax provision . . . . . . . . . . . . . . . . (46.0) (30.7) (158.9) (108.8)
--------- --------- ----------- ----------
NET EARNINGS . . . . . . . . . . . . . . . . . . . . 52.4 43.0 230.9 192.6
Preferred dividends . . . . . . . . . . . . . . . . . (2.3) (2.3) (7.0) (7.0)
--------- --------- ---------- ----------
EARNINGS APPLICABLE TO COMMON SHARES . . . . . . . . $ 50.1 $ 40.7 $ 223.9 $ 185.6
========= ========= ========== ==========
Primary earnings per common share . . . . . . . . . . $ 1.10 $ .90 $ 4.91 $ 4.11
========= ========= ========== ==========
Fully diluted earnings per common share . . . . . . . $ 0.95 $ .78 $ 4.18 $ 3.51
========= ========= ========== ==========
Weighted average primary shares outstanding . . . . . 45.6 45.4 45.6 45.2
========= ========= ========== ==========
Weighted average fully diluted shares outstanding . . 55.2 55.0 55.2 54.8
========= ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 3
ALUMAX INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(Millions of Dollars,
Except per Share Amounts)
<S> <C> <C>
ASSETS
Current Assets:
Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . $ 68.1 $ 205.9
Accounts receivable, less allowance for doubtful accounts
(1996-$17.8; 1995-$17.7) . . . . . . . . . . . . . . . . . . . . . 447.9 437.8
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524.1 558.3
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . 124.5 89.0
--------- ----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . 1,164.6 1,291.0
--------- ----------
Noncurrent Assets:
Property, plant and equipment at cost, less accumulated
depreciation and amortization (1996-$1,015.7; 1995-$1,051.3) . . . 2,003.3 1,611.9
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.5 232.1
--------- ----------
Total noncurrent assets . . . . . . . . . . . . . . . . . . . . . . 2,178.8 1,844.0
--------- ----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,343.4 $ 3,135.0
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 145.2 $ 148.8
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 315.6 237.3
Current maturities of long-term debt . . . . . . . . . . . . . . . . . 38.5 137.0
--------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . 499.3 523.1
--------- ----------
Noncurrent Liabilities:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673.7 708.9
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . 540.5 503.7
--------- ----------
Total noncurrent liabilities . . . . . . . . . . . . . . . . . . . 1,214.2 1,212.6
--------- ----------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock of $1.00 par value . . . . . . . . . . . . . . . . . . 2.3 2.3
Common stock of $.01 par value . . . . . . . . . . . . . . . . . . . . .4 .4
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 915.7 909.5
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 707.5 483.6
Cumulative foreign currency translation adjustment . . . . . . . . . . 4.0 3.5
--------- ----------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . 1,629.9 1,399.3
--------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . $ 3,343.4 $ 3,135.0
========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 4
ALUMAX INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
-------------------------------------
1996 1995
------------ -----------
(Millions of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . $ 230.9 $ 192.6
Reconciliation of net earnings to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . 105.7 85.9
Provision for doubtful accounts . . . . . . . . . . . . . . . . 4.9 1.7
Gain on sales of assets . . . . . . . . . . . . . . . . . . . . (242.9) (132.7)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . (1.1) 18.3
Other noncash items . . . . . . . . . . . . . . . . . . . . . . 6.2 3.5
Changes in working capital, net of effects
of acquisition/disposition . . . . . . . . . . . . . . . . . 37.5 (33.6)
Net change in other noncurrent assets and liabilities . . . . . 14.2 1.9
--------- --------
Net cash provided by operating activities . . . . . . . . . . 155.4 137.6
--------- --------
INVESTING ACTIVITIES:
Dispositions, net of cash sold . . . . . . . . . . . . . . . . . . 497.0 148.3
Acquisition, net of cash acquired . . . . . . . . . . . . . . . . (436.5) -
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . (171.1) (131.1)
--------- --------
Net cash provided by (used in) investing activities . . . . . (110.6) 17.2
--------- --------
FINANCING ACTIVITIES:
Repayments of long-term and short-term debt . . . . . . . . . . . (550.6) (62.0)
Proceeds from short-term debt . . . . . . . . . . . . . . . . . . 375.0 -
Dividends paid on preferred stock . . . . . . . . . . . . . . . . (7.0) (7.0)
--------- --------
Net cash used in financing activities . . . . . . . . . . . . (182.6) (69.0)
--------- --------
Net increase (decrease) in cash and equivalents . . . . . . . . . . . . (137.8) 85.8
Cash and equivalents at beginning of year . . . . . . . . . . . . . . . 205.9 93.0
--------- --------
Cash and equivalents at end of period . . . . . . . . . . . . . . . . . $ 68.1 $ 178.8
========= ========
Supplemental Cash Flow Information:
Income tax payments . . . . . . . . . . . . . . . . . . . . . . . $ 57.9 $ 60.6
Interest paid, net of amounts capitalized . . . . . . . . . . . . $ 53.1 $ 56.9
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 5
ALUMAX INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
NOTE 1. PRESENTATION
These unaudited interim condensed financial statements of Alumax Inc. ("Alumax"
or the "Company") should be read in conjunction with the audited financial
statements for the year ended December 31, 1995. In management's opinion, all
adjustments necessary for a fair presentation are reflected in the interim
periods presented.
NOTE 2. STRATEGIC TRANSACTIONS
The Company periodically implements strategic actions which it believes afford
it the opportunity to redeploy resources to enhance profitability and growth.
During the nine months ended September 30, 1996 and 1995, the following has
occurred:
Dispositions
On September 25, 1996, the Company sold certain Fabricated Products businesses
in Western Europe and in the United States for $246.6 in cash, net of cash sold
of $5.4. The Company recorded an after-tax gain of $36.7, net of a $35.0 tax
provision, in the third quarter of 1996.
In June 1996, the Company sold its investment in mining interests for $160 in
cash. The Company recorded an after-tax gain of $55.1, net of a $37.7 tax
provision, in the second quarter of 1996.
In January 1996, the Company sold a 23 percent undivided interest in its Mt.
Holly primary aluminum reduction facility for $89.3, which the Company applied
to the early retirement of a $90.7 promissory note due in May 1996. The
Company recorded an after-tax gain of $48.6, net of a $29.8 tax provision, in
the first quarter of 1996. This transaction reduced the Company's ownership in
the Mt. Holly facility to 50.33 percent.
In March 1995, the Company sold a 14 percent undivided interest in each of the
Company's Intalco and Eastalco primary aluminum reduction facilities for cash
proceeds of $147.6, resulting in an after-tax gain of $81.3, net of a $47.5 tax
provision, recorded in the first quarter of 1995. This transaction reduced the
Company's ownership in each facility to 61 percent.
Acquisition
On January 31, 1996, the Company purchased all of the common shares of
privately held Cressona Aluminum Company ("Cressona") for a cash cost,
including expenses, of $436.5, net of $3.1 of cash acquired. In conjunction
with the acquisition, liabilities of $87.4 were acquired. Cressona is a leading
manufacturer of extruded aluminum products.
The transaction has been accounted for as a purchase and the results of
operations of Cressona have been included in the consolidated financial
statements since January 31, 1996. The acquisition was financed with cash on
hand and $375 of borrowings obtained under available credit facilities. All of
these borrowings have been repaid as of September 30, 1996.
-5-
<PAGE> 6
ALUMAX INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
Pro Forma Information
The following summary presents Alumax's unaudited pro forma consolidated net
sales, net earnings, and primary earnings per common share for the quarters and
nine months ended September 30, 1996 and 1995, respectively, as if the
acquisition of Cressona and the sale of the Fabricated Products businesses
each occurred on January 1, 1996 and 1995. The pro forma adjustments for the
nine months ended September 30, 1996 include the addition of Cressona's
operating results for the month of January 1996. Since the acquisition
occurred on January 31, 1996, the Company's actual results include Cressona
from February 1, 1996 through September 30, 1996.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . $ 686.2 $ 762.8 $ 2,134.1 $ 2,181.5
Net earnings . . . . . . . . . . . . . . . . . . . . $ 46.2 $ 44.3 $ 220.2 $ 201.3
Primary earnings per common share . . . . . . . . . $ 0.96 $ 0.93 $ 4.67 $ 4.30
</TABLE>
The pro forma results are based upon certain assumptions and estimates, which
the Company believes are reasonable. The pro forma results do not purport to
be indicative of results that actually would have been obtained had these
transactions occurred on January 1, 1996 or 1995, nor are they intended to be a
projection of future results.
NOTE 3. INVENTORIES
Components of inventories at September 30, 1996 and December 31, 1995 are:
<TABLE>
<CAPTION>
1996 1995
------- --------
<S> <C> <C>
Raw materials . . . . . . . . . . . . . . . . . . . . . $ 323.6 $ 361.6
Work in process . . . . . . . . . . . . . . . . . . . . 99.1 105.9
Finished products . . . . . . . . . . . . . . . . . . . 101.4 90.8
------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . $ 524.1 $ 558.3
======= ========
</TABLE>
Approximately 77 percent and 72 percent of inventory at September 30, 1996 and
December 31, 1995, respectively, have been determined on the LIFO cost basis.
The excess of replacement cost over the LIFO basis of such inventory is
approximately $62.6 and $101.2 at September 30, 1996 and December 31, 1995,
respectively.
NOTE 4. INCOME TAX PROVISION
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Federal . . . . . . . . . . . . . . . . . . . . . . $ 36.3 $ 28.1 $ 111.6 $ 92.4
Foreign . . . . . . . . . . . . . . . . . . . . . . 7.4 (1.5) 35.0 5.7
State . . . . . . . . . . . . . . . . . . . . . . . 2.3 4.1 12.3 10.7
-------- ------- -------- --------
Total . . . . . . . . . . . . . . . . . . . . . . $ 46.0 $ 30.7 $ 158.9 $ 108.8
======== ======= ======== ========
</TABLE>
The effective tax rates for these periods differ from statutory rates because
of provisions for prior years and provisions for state and foreign taxes.
In the three months ended September 30, 1996, the repatriation of foreign
earnings associated with the sale of certain Fabricated Products businesses in
Western Europe also contributed to an effective tax rate higher than the
statutory rate. In the three months ended March 31, 1995, the
-6-
<PAGE> 7
ALUMAX INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
Company also reversed a $13.4 federal income tax asset valuation allowance in
anticipation of utilization of the asset due to the significant level of 1995
first quarter earnings.
NOTE 5. OTHER INCOME
The nine months ended September 30, 1996 and 1995 include $18.7 and $7.9,
respectively, of dividend income received from investments in mining
operations.
NOTE 6. COMMITMENTS AND CONTINGENCIES
The Company and its affiliates have been named as defendants in lawsuits in
various matters relating to both current and former operations. In addition,
the Company and certain of its subsidiaries have been named as defendants in
lawsuits or as potentially responsible parties in state and federal
administrative and judicial proceedings seeking contribution for costs
associated with the investigation, analysis, correction and remediation of
environmental conditions at various hazardous waste disposal sites. The
Company continues to monitor these actions and proceedings and to vigorously
defend both its own interests as well as the interests of its affiliates.
The Company's ultimate liability in connection with present and future
environmental claims will depend on many factors, including its volumetric
share of the waste at a given site, the remedial action required, the total
cost of remediation, and the financial viability and participation of the other
entities involved with the site. Once it becomes probable that the Company
will incur costs in connection with remediation of a site and such costs can be
reasonably estimated, the Company establishes or adjusts its reserve for its
projected share of these costs. Based upon current law and information known
to the Company concerning the size of the sites known to it, anticipated costs,
their years of operation and the number of other potentially responsible
parties, Management believes that it has adequate reserves for the Company's
potential share of the estimated aggregate liability for the costs of remedial
actions and related costs and expenses. In addition, the Company establishes
reserves for remedial measures required from time to time at its own
facilities. The Company's environmental reserves totalled $27.2 and $22.8 at
September 30, 1996, and December 31, 1995 ($27.2 with the inclusion of
Cressona), respectively. Management believes that the reasonably probable
outcomes of these matters will not materially exceed established reserves.
Although the Company believes it has coverage for some environmental claims
under certain insurance policies, insurance recoveries are not considered in
estimating the Company's share of remediation costs at a site unless an
insurance carrier has agreed to pay a portion of such costs. Insurance
recoveries were not considered in establishing reserves for any of these sites
absent an agreement between the carriers and the Company.
On September 30, 1996, the Company, through its subsidiary Alumax Mill
Products, Inc., exercised its option to purchase its leased Texarkana rolling
mill facility in November 1997 for approximately $97 in cash.
The Internal Revenue Service (the "IRS") has asserted that Alumax and certain
of its subsidiaries were improperly included in the 1984, 1985 and 1986
consolidated income tax returns of AMAX Inc. and on that basis has asserted a
federal income tax deficiency against Alumax of approximately $129. Interest
on the deficiency through September 30, 1996, would be approximately $265. In
response to the IRS' notice of deficiency, the Company filed a petition in the
United States Tax Court (the "Court") seeking a redetermination in respect of
the purported deficiency. The parties have waived their rights to a trial and
the matter has been submitted to the Court for decision based upon the
pleadings, stipulations, memoranda and other documents submitted, or to be
submitted, to the Court by the parties. Payment of the deficiency with
interest thereon would provide certain tax benefits to the Company that would
offset in part the cost of paying the deficiency and interest. The Company
believes that it has adequate reserves so that any unprovided for net
deficiency would not have a material adverse
-7-
<PAGE> 8
ALUMAX INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONCLUDED)
effect on the Company's financial condition. For information regarding
additional commitments and contingencies, see Note 12 to the Financial
Statements in the Company's 1995 Annual Report on Form 10-K.
NOTE 7. STOCKHOLDER RIGHTS AGREEMENT
On February 22, 1996, the Executive Committee of the Board of Directors of the
Company declared a dividend distribution of one right (a "Right") for each
outstanding share of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), held of record at the close of business on February 22, 1996.
The Rights attach automatically to each share of Common Stock outstanding as of
February 22, 1996, and to each share of Common Stock issued after February 22,
1996.
Each Right entitles the holder to purchase from the Company one one-hundredth
of a share of the Company's Participating Preferred Stock at an exercise price
of $130, subject to certain adjustments. The Rights will not be exercisable or
transferable apart from the Common Stock until either the tenth business day
after the announcement by a person or group of the commencement of a tender or
exchange offer for 15 percent or more of the Voting Stock or the first date of
announcement by the Company that a person or group has acquired beneficial
ownership of 15 percent or more of the Voting Stock (an "Acquiring Person").
"Voting Stock" means shares of capital stock of the Company entitled to vote
generally in the election of directors. If the Company is consolidated or
merged with another company or 50 percent or more of its consolidated assets or
earning power are sold and, at the time, an Acquiring Person controls the
Company's Board of Directors, each holder of a Right will have the right to
receive, upon exercise at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which have a market
value of twice the then current exercise price of the Right. If any person
becomes an Acquiring Person, each holder of a Right other than the Acquiring
Person (whose Rights will be void) will have the right to receive, upon
exercise at the then current exercise price of the Right, that number of shares
of Common Stock having a market value of twice the exercise price of the Right.
The Rights will expire on February 22, 2006 and may be redeemed for $.01 per
Right at any time prior to the time an Acquiring Person becomes such. Until a
Right is exercised, the record holder will have no rights as a stockholder of
the Company.
After the announcement that an Acquiring Person has become such and prior to
the acquisition by an Acquiring Person of 50 percent or more of the outstanding
Voting Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person) at an exchange ratio of one
share of Common Stock, or one one-hundredth of a share of the Company's
Participating Preferred Stock, per Right, subject to adjustment.
The Company's Board of Directors may amend the Rights Agreement, in any
respect, until the time an Acquiring Person becomes such. Thereafter, the
Company's Board of Directors may amend the Rights Agreement in any respect not
materially adverse to Rights holders generally.
-8-
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Unaudited; millions of dollars, except per
share and per tonne amounts)
INTRODUCTION
Net earnings totalled $52.4 and $230.9, or $1.10 and $4.91 per common share,
for the three and nine months ended September 30, 1996, respectively, compared
to net earnings of $43.0 and $192.6, or $.90 and $4.11 per common share, in the
comparable 1995 periods. The 1996 results include after-tax gains of $36.7
($0.81 per common share; $0.67 fully diluted) in the third quarter on the sale
of certain Fabricated Products business, $55.1 ($1.21 per common share; $0.99
fully diluted) in the second quarter on the sale of mining interests and $48.6
($1.07 per common share; $0.88 fully diluted) in the first quarter on the sale
of a 23 percent interest in the Mt. Holly primary aluminum reduction facility.
The 1995 results include a first quarter after-tax gain of $81.3 ($1.81 per
common share; $1.49 fully diluted) on the sale of a 14 percent interest in each
of the Intalco and Eastalco primary aluminum reduction facilities.
RESULTS OF OPERATIONS
Earnings from operations for the three and nine months ended September 30, 1996
totalled $44.4 and $183.8, respectively, compared to operating earnings of
$91.0 and $219.0 for the three and nine months ended September 30, 1995,
respectively.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -----------------------
1996 1995 1996 1995
------- -------- --------- ---------
(unaudited)
<S> <C> <C> <C> <C>
NET SALES
Primary aluminum products . . . . . . . . . . . . . . $ 140.2 $ 208.0 $ 501.8 $ 509.7
Semi-fabricated products . . . . . . . . . . . . . . . 418.0 316.5 1,237.1 944.0
Fabricated products . . . . . . . . . . . . . . . . . 250.9 243.2 724.2 733.8
-------- -------- --------- ---------
$ 809.1 $ 767.7 $ 2,463.1 $ 2,187.5
======== ======== ========= =========
EARNINGS FROM OPERATIONS
Aluminum processing . . . . . . . . . . . . . . . . . $ 55.1 $ 98.9 $ 215.0 $ 243.4
Corporate . . . . . . . . . . . . . . . . . . . . . . (10.7) (7.9) (31.2) (24.4)
-------- -------- --------- ---------
$ 44.4 $ 91.0 $ 183.8 $ 219.0
======== ======== ========= =========
PRODUCTION AND SHIPMENTS (THOUSANDS OF TONNES)
Sources of metal
Primary aluminum production . . . . . . . . . . . . . 162.9 156.9 506.1 487.0
Aluminum purchases . . . . . . . . . . . . . . . . . . 107.7 89.4 337.3 271.9
-------- -------- --------- ---------
270.6 246.3 843.4 758.9
======== ======== ========= =========
Metal shipments
Aluminum processing (including tolling)
Primary aluminum products . . . . . . . . . . . . . . 78.7 111.3 285.9 301.7
Semi-fabricated products(1) . . . . . . . . . . . . . 147.6 102.2 429.0 319.7
Fabricated products(1) (2) . . . . . . . . . . . . . . 35.6 35.7 104.6 110.4
-------- -------- --------- ---------
261.9 249.2 819.5 731.8
======== ======== ========= =========
</TABLE>
(1) Net sales and shipments for the Company's Magnolia operation have been
reclassified from fabricated products to semi-fabricated products.
Magnolia manufactures shower and tub enclosures, stadium seating, and
other extruded products.
(2) Included in Fabricated products' metal shipments for the three and
nine months ended September 30, 1996, are billet shipments of 4.7 and
15.5 thousand tonnes, respectively, compared to 6.6 and 20.9 thousand
tonnes in the same 1995 periods.
-9-
<PAGE> 10
NET SALES AND SHIPMENTS
The Company generated quarterly sales of $809.1 on aluminum shipments of
261,900 tonnes in the third quarter of 1996 compared with sales of $767.7 on
aluminum shipments of 249,200 tonnes in the third quarter of 1995. For the
first nine months of 1996, the Company generated record sales of $2,463.1 on
record aluminum shipments of 819,500 tonnes, compared with sales of $2,187.5 on
aluminum shipments of 731,800 tonnes in the first nine months of 1995. As
further described below, increases in net sales are a result of a growth in
total shipments partially offset by lower realized selling prices.
The London Metals Exchange (the "LME") cash price averaged $1,440 and $1,530
per tonne during the three and nine months ended September 30, 1996, compared
to $1,840 and $1,850 per tonne in the same 1995 periods. The Company's net
sales are sensitive to changes in the world pricing of primary aluminum. This
price sensitivity impacts substantially all of the Company's products to
varying degrees, with less impact on the more specialized and value-added
products. As previously disclosed, during the first half of 1995, the Company
settled forward sales contracts on 110,000 tonnes entered into in late 1993 at
then prevailing market prices. The Company had not purchased call options to
cover these forward sales. Purchase of call options in late 1993 to cover
these forward sales would have favorably impacted the 1995 first half earnings
from operations by approximately $82.
The Company's shipments increased 5 percent and 12 percent in the three and
nine months ended September 30, 1996, respectively, as compared to the same
periods in 1995. The increases are substantially related to the Company's
primary and semi-fabricated extrusions operations. The January 31, 1996
acquisition of Cressona Aluminum Company ("Cressona") more than doubled the
capacity of the Company's extrusions business, creating the largest extrusions
company in the United States. These increases have been partially offset by a
decrease in external primary shipments, resulting from increased demand from
downstream operations.
COST AND EXPENSES
The Company's cost and expenses were $764.7 and $2,279.3 for the three and nine
months ended September 30, 1996, respectively, compared with cost and expenses
of $676.7 and $1,968.5 for the three and nine months ended September 30, 1995,
respectively. The increase is largely attributable to higher volumes combined
with increased raw material costs.
OTHER ITEMS AFFECTING NET EARNINGS
Other Income (Expense), Net
Other income, net for the three and nine months ended September 30, 1996 was
($1.9) and $13.0, respectively, compared with ($2.2) and $5.6 over the same
periods in 1995. The nine months ended September 30, 1996 and 1995 include
$18.7 and $7.9, respectively, of dividend income received from investments in
mining operations.
Interest Expense, Net
Gross interest expense of $18.2 and $58.6 for the three and nine months ended
September 30, 1996, respectively, decreased from $19.3 and $62.8 in the same
1995 periods as a result of lower average interest rates for the third quarter
and lower average borrowings year-to-date. Interest income was $0.6 and $3.0
for the three and nine months ended September 30, 1996 as compared to $2.6 and
$7.8 in the same 1995 periods. Capitalized interest was $1.8 and $5.7 for the
three and nine months ended September 30, 1996 as compared to $2.4 and $3.0 in
the same 1995 periods.
-10-
<PAGE> 11
Income Taxes
The income tax provision for the three and nine months ended September 30, 1996
was $46.0 and $158.9, respectively, compared to $30.7 and $108.8 for the same
1995 periods. The effective tax rates for these periods differ from statutory
rates because of provisions for prior years and provisions for state and
foreign taxes. In the three months ended September 30, 1996, the
repatriation of foreign earnings associated with the sale of certain
Fabricated Products businesses in Western Europe also contributed to an
effective tax rate higher than the statutory rate. In the three months
ended March 31, 1995, the Company also reversed a $13.4 federal income tax
asset valuation allowance in anticipation of utilization of the asset due to
the significant level of 1995 first quarter earnings.
STRATEGIC TRANSACTIONS
The Company periodically implements strategic actions which it believes afford
it the opportunity to redeploy resources to enhance profitability and growth.
During the nine months ended September 30, 1996 and 1995, the following has
occurred:
Dispositions
On September 25, 1996, the Company sold certain Fabricated Products businesses
in Western Europe and in the United States for $246.6 in cash, net of cash sold
of $5.4. The Company recorded an after-tax gain of $36.7 net of a $35.0 tax
provision, in the third quarter of 1996.
In June 1996, the Company sold its investment in mining interests for $160 in
cash. The Company recorded an after-tax gain of $55.1, net of a $37.7 tax
provision, in the second quarter of 1996.
In January 1996, the Company sold a 23 percent undivided interest in its Mt.
Holly primary aluminum reduction facility for $89.3, which the Company applied
to the early retirement of a $90.7 promissory note due in May 1996. The
Company recorded an after-tax gain of $48.6, net of a $29.8 tax provision, in
the first quarter of 1996. This transaction reduced the Company's ownership in
the Mt. Holly facility to 50.33 percent.
In March 1995, the Company sold a 14 percent undivided interest in each of the
Company's Intalco and Eastalco primary aluminum reduction facilities for cash
proceeds of $147.6, resulting in an after-tax gain of $81.3, net of a $47.5 tax
provision, recorded in the first quarter of 1995. This transaction reduced the
Company's ownership in each facility to 61 percent.
Acquisition
On January 31, 1996, the Company purchased all of the common shares of
privately held Cressona for a cash cost, including expenses, of $436.5, net of
$3.1 of cash acquired. In conjunction with the acquisition, liabilities of
$87.4 were acquired. Cressona is a leading manufacturer of extruded aluminum
products.
The transaction has been accounted for as a purchase and the results of
operations of Cressona have been included in the consolidated financial
statements since January 31, 1996. The acquisition was financed with cash on
hand and $375 of borrowings obtained under available credit facilities. All of
these borrowings have been repaid as of September 30, 1996.
Pro Forma Information
The following summary presents Alumax's unaudited pro forma consolidated net
sales, net earnings, and primary earnings per common share for the quarters and
nine months ended September 30, 1996 and 1995, respectively, as if the
acquisition of Cressona and the sale of the Fabricated Products businesses
each occurred on January 1, 1996 and 1995. The pro forma adjustments for the
nine months ended September 30, 1996 include the addition of Cressona's
operating results for the month of January 1996. Since the acquisition
occurred on January 31, 1996, the Company's actual results include Cressona
from February 1, 1996 through September 30, 1996.
-11-
<PAGE> 12
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ----------------------
1996 1995 1996 1995
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . $ 686.2 $ 762.8 $ 2,134.1 $ 2,181.5
Net earnings . . . . . . . . . . . . . . . . . . . . $ 46.2 $ 44.3 $ 220.2 $ 201.3
Primary earnings per common share . . . . . . . . . $ 0.96 $ 0.93 $ 4.67 $ 4.30
</TABLE>
The pro forma results are based upon certain assumptions and estimates, which
the Company believes are reasonable. The pro forma results do not purport to
be indicative of results that actually would have been obtained had these
transactions occurred on January 1, 1996 or 1995, nor are they intended to be a
projection of future results.
The Company is currently in negotiations with Eduard Hueck GmbH & Co. KG
("Hueck") regarding the possible acquisition of privately held Hueck. Hueck is
based in Ludenscheid, Germany and is a leading manufacturer of aluminum
architectural products in Europe, with annual sales of approximately $230. The
negotiations are ongoing and any transaction is dependent upon the execution of
a mutually satisfactory definitive agreement, receipt of required governmental
and regulatory approvals, and the approvals of the board of directors of Alumax
and all selling parties.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
Operations provided $155.4 and $137.6 of cash during the first nine months of
1996 and 1995, respectively. Higher cash flows are directly related to working
capital reductions (net of effects of the Cressona acquisition and the sale of
Fabricated Products) partially offset by lower earnings from operations.
Investing Activities
Cash used by investing activities was $110.6 for the nine months ended
September 30, 1996 compared to $17.2 of cash provided in the first nine months
of 1995. As described under "Strategic Transactions", the Company received net
cash of $60.5, in connection with strategic transactions during the first nine
months of 1996. In addition, during the second quarter of 1996, the Company
entered into a joint venture with Yunnan Aluminum Processing Factory in
Kunming, China for the annual production of 8,000 to 10,000 tonnes of light
gauge aluminum foil. Alumax will invest $38 of cash in the joint venture to
develop a continuous cast foil operation. As of September 30, 1996, the
Company has invested $4.0 in cash.
In the first quarter of 1995, the Company received $147.6 from the sale of a 14
percent interest in each of the Intalco and Eastalco primary aluminum reduction
facilities. Capital expenditures were $171.1 during the first nine months of
1996 compared to $131.1 in the first nine months of 1995.
On September 30, 1996, the Company, through its subsidiary Alumax Mill
Products, Inc., exercised an option to purchase its leased Texarkana rolling
mill facility in November 1997 for approximately $97 in cash.
Financing Activities
Cash used by financing activities was $182.6 and $69.0 in the first nine months
of 1996 and 1995, respectively. The Company borrowed $375 under available
credit facilities in January 1996 to finance the acquisition of Cressona.
During the first nine months of 1996, all of the Cressona acquisition borrowings
were repaid. Total debt repayments of $550.6 in the first nine months of 1996
also included the early retirements of $39.3 of Cressona debt acquired and a
$90.7 promissory note due in May 1996. At September 30, 1996, the Company's
total debt to capital ratio was 30.4 percent, down from 42.3 percent in the
first quarter, which is attributable to the aforementioned debt reduction
combined with a year-to-date increase in stockholders' equity of $230.6, a 16
percent stockholders' equity increase from December 31, 1995. (See Note 8 to
the Financial Statements in the Company's 1995 Annual Report on Form 10-K).
-12-
<PAGE> 13
Also, $7.0 in dividends were paid to holders of Alumax $4.00 Series A
Convertible Preferred Stock in the first nine months of both 1996 and 1995. In
April 1996, the Company withdrew its shelf registration with the Securities and
Exchange Commission covering the issuance of up to 9.2 million shares of common
stock (see Note 13 to the Financial Statements in the Company's 1995 Annual
Report on Form 10-K).
On November 4, 1996, the Company announced that it will redeem all outstanding
shares of the $4.00 Series A Convertible Preferred Stock ("Preferred Stock"),
par value $1.00 per share, on December 18, 1996. Each share of the Preferred
Stock will be redeemed at a price of $52.40 per share, plus an amount equal to
the quarterly dividend accrued on each share through the redemption date. As
an alternative to redemption, each share of the Preferred Stock may be
converted at the option of the holder into 4.11489 shares of the Company's
common stock until the close of business on December 4, 1996.
Based on the current market price of Alumax common stock, the Company expects
all holders to convert the Preferred Stock into Alumax common stock prior to
the close of business on December 4, 1996. As of September 30, 1996,
approximately 2.3 million shares of the Preferred Stock were outstanding, which
were convertible into 9.6 million common shares.
Risk Management
The Company utilizes certain financial instruments in connection with its risk
management. The risk of loss related to counterparty nonperformance under
financial instrument agreements at September 30, 1996 is not significant.
The Company enters into forward fixed price arrangements that are required by
certain customers and suppliers. The Company may utilize futures contracts
which effectively convert forward fixed price arrangements to market prices in
order to meet overall strategic objectives. Such contracts covered
approximately 105,600 tonnes at September 30, 1996 and mature at various dates
through 1999. Gains or losses with respect to these positions are reflected in
earnings concurrently with consummation of the underlying fixed price
transaction. Periodic value fluctuations of the futures contracts
approximately offset the value fluctuations of the underlying fixed price
transactions.
The Company also may, from time to time, establish a floor selling price for
varying quantities of future production, while preserving the opportunity to
participate in upward price movements. This may be accomplished by purchasing
put options, or by entering into forward sales of primary aluminum and
purchases of call options, which together provide the same price protection as
purchasing put options, in a manner which correlates with the Company's
production and sales of primary aluminum. The strategy may be modified from
time to time. At September 30, 1996, the Company's commitments with respect to
these financial instruments covered 334,875 tonnes of future production. The
Company would have received $9.7 to terminate these contracts at September 30,
1996.
Certain of the Company's foreign operating expenditures are denominated in
currencies other than the operations' functional currencies, which expose the
Company to exchange rate risks. In order to mitigate its exposure to exchange
rate risk where these conditions exist, the Company may utilize forward foreign
currency contracts. At September 30, 1996, the Company had outstanding $127.0
in forward foreign currency contracts which mature during the remainder of 1996
and 1997. The gains or losses related to these contracts are deferred and
included in the measurement of the related foreign currency denominated
transactions. If these contracts had been terminated at September 30, 1996,
the Company would have received approximately $0.9.
The Company's debt instruments and related interest rate hedges are susceptible
to market fluctuations based on changes in the cost of borrowing. At September
30, 1996, the fair value of total debt approximated book value. The Lauralco
credit facility, which has a variable interest rate, required the Company to
establish facilities to effectively limit the interest rate exposure of the
commitment. To meet this requirement, the Company has obtained interest rate
swaps with a notional amount of $400 through October 26, 2000 and a series of
interest rate caps having notional amounts of $75 and $150 through October 28,
1996 and October 29, 1998,
-13-
<PAGE> 14
respectively, which decline with projected loan balances. The Company would
have paid approximately $39.3 to terminate these agreements at September 30,
1996.
For further information regarding the Company's risk management, see
Management's Discussion and Analysis of Financial Condition and Results of
Operations and Note 20 to the Financial Statements in the Company's 1995 Annual
Report on Form 10-K.
Income Taxes
The Internal Revenue Service (the "IRS") has asserted that Alumax and certain
of its subsidiaries were improperly included in the 1984, 1985 and 1986
consolidated income tax returns of AMAX Inc. and on that basis has asserted a
federal income tax deficiency against Alumax of approximately $129. Interest
on the deficiency through September 30, 1996, would be approximately $265. In
response to the IRS' notice of deficiency, the Company filed a petition in the
United States Tax Court (the "Court") seeking a redetermination in respect of
the purported deficiency. The parties have waived their rights to a trial and
the matter has been submitted to the Court for decision based upon the
pleadings, stipulations, memoranda and other documents submitted, or to be
submitted, to the Court by the parties. Payment of the deficiency with
interest thereon would provide certain tax benefits to the Company that would
offset in part the cost of paying the deficiency and interest. The Company
believes that it has adequate reserves so that any unprovided for net
deficiency would not have a material adverse effect on the Company's financial
condition.
Environmental Matters
The Company has been named as a defendant or identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") and similar state laws by governmental agencies
and private parties at 39 pending waste disposal sites which, in most
instances, were owned and operated by third parties. Management periodically
evaluates such matters and records or adjusts liability reserves for
remediation and other costs and potential damages when expenditures are
considered probable and can be reasonably estimated.
The Company's ultimate liability in connection with present and future
environmental claims will depend on many factors, including its volumetric
share of the waste at a given site, the remedial action required, the total
cost of remediation and the financial viability and participation of the other
entities involved with the site. Based upon current law and information known
to the Company concerning the size of the sites known to it, anticipated costs,
their years of operation, and the number of other potentially responsible
parties, management believes that it has adequate reserves for the Company's
probable share of the estimated aggregate liability for the costs of remedial
actions and related costs and expenses and that such liability and related
costs and expenses should not have a material adverse effect on the financial
condition or results of operations of the Company. In addition, the Company
establishes reserves for remedial measures required from time to time at its
own facilities. Any expenditures for remediation programs it may be required
to undertake, either individually or in the aggregate, are not expected to have
a material adverse effect on the financial condition or results of operations
of the Company. The Company's environmental reserves totaled $27.2 at
September 30, 1996 and $22.8 at December 31, 1995 ($27.2 with the inclusion of
Cressona).
Management does not anticipate that commitments, operating expenses or capital
expenditures for environmental compliance through and including the next fiscal
year will have a material adverse effect on the Company's financial condition
or results of operations. Based on historical trends toward stricter
environmental standards, however, it appears likely that the Company will incur
additional expenditures to remain in compliance with federal and state
environmental laws.
-14-
<PAGE> 15
Part II. Other Information
Item 1. Legal Proceedings
STRINGFELLOW
In 1983, the United States and the State of California commenced an action
under CERCLA in the United States District Court for the Central District of
California against the Company and 30 other potentially responsible parties in
connection with the Stringfellow disposal site located at Glen Avon,
California. In a proceeding in the United States District Court for the
Central District of California, it was determined that both the defendants and
the State of California are responsible for certain costs associated with the
cleanup of the Stringfellow site. The issue of the allocation of liability
among the defendants and the State was tried before a Special Master who filed
his Findings of Fact, Conclusions of Law and Report and Recommendation of the
Special Master Regarding the State Share Fact Finding Hearing on November 30,
1993. On January 23, 1995, the United States District Court entered an order
adopting the findings, conclusions and recommendations of the Special Master
with certain modifications, which do not adversely impact the Company. The
order allocates liability on the basis of two different legal claims, each of
which has a different legal standard of apportionment. As to CERCLA claims,
the order allocates liability as follows: 65 percent to the State, ten percent
to Stringfellow Quarry Company and 25 percent to all other parties (including
the Company). As to the claims asserted against the State under state law
theories such as negligence and breach of a mandatory duty, the order allocates
100 percent of the liability to the State. Reconsideration or appellate review
of the order may be sought by one or more of the parties and the State may
assert protection of the Eleventh Amendment to the United States Constitution,
which limits suits against states in federal courts.
On March 27, 1996, the United States Supreme Court issued its decision in
Seminole Tribe of Florida v. Florida, which reversed an earlier Supreme Court
decision that had held that Congress had the authority to abrogate protections
of the Eleventh Amendment barring certain suits against states in federal
courts, including under CERCLA. On July 16, 1996, the State of California
filed a motion for reconsideration of the District Court's liability rulings
against the State, based upon the Seminole Tribe decision. In that motion, the
State contends that the Eleventh Amendment is a jurisdictional bar which cannot
be waived through conduct in litigation and that the State has not expressly
waived its Eleventh Amendment immunity. Consequently, the State argues that
the liability rulings against the State must be reversed or the defendants'
counterclaims limited to defensive recoupment. The defendants filed an
opposition to that motion on August 2, 1996, which maintains that Seminole
Tribe does not alter prior law by recognizing the Eleventh Amendment as a
jurisdictional bar nor does the case address the doctrine of defensive
recoupment. The opposition also asserts that Seminole Tribe does not affect
the question of waiver of Eleventh Amendment immunity by conduct in litigation
or the District Court's prior finding that the State waived its Eleventh
Amendment immunity through its conduct of the lawsuit. The parties are
scheduled to present oral argument to the Special Master on the State's motion
on November 13, 1996. Oral argument to the Special Master also has been
scheduled for the same date on the defendants' motion that CERCLA liability
cannot be imposed on them retroactively, and on the United States' and the
defendants' joint motion for entry of a judgment which will permit the parties
to appeal rulings in the case to the United States Court of Appeals for the
Ninth Circuit. After hearing argument on such motions, the Special Master will
submit his recommendations to the District Court for rulings.
Based on the present circumstances, the Company does not believe that any
liability imposed in connection with the Stringfellow site will have a material
adverse effect on the Company's financial condition or results of operations
given the nature and extent of its involvement at the site and available
reserves. See "Legal Proceedings-- Stringfellow" in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
-15-
<PAGE> 16
HAMMONS V. ALCAN, ET AL.
Alumax and four other producers of primary aluminum, together with The Aluminum
Association, an industry trade association, were served with a summons and
complaint in March 1996, alleging violations of California's State antitrust
act (the Cartwright Act). The suit was originally filed in the Superior Court
for Los Angeles County, but was removed by the defendants to the United States
District Court for the Central District of California. Plaintiff alleges that
the defendants conspired, together with the United States Government and the
governments of several other sovereign nations, to fix the prices of primary
aluminum by agreeing to reduce production. The allegations arise from the
Memorandum of Understanding Concerning the Aluminum Market ("MOU") negotiated
by the United States and other governments in 1993 and 1994, and executed by
them in Brussels in 1994, and the actions of the defendants alleged to have
been undertaken in accordance with the terms of the MOU.
The complaint was brought by a California bicycle manufacturer as a purported
class action on behalf of all direct and indirect purchasers of primary
aluminum and aluminum products produced during the period January 1, 1994 to
March 5, 1996. The complaint seeks injunctive relief and recovery of damages
that, when trebled, are alleged to be in excess of $26 billion. Following
removal of the action to the District Court, the defendants filed a motion to
dismiss. Upon considering that motion, plaintiff's opposition and the
defendants' reply, the court by order dated May 28, 1996, converted the motion
to dismiss to a motion for summary judgment by the defendant-aluminum
producers. In the same order, the court granted The Aluminum Association's
motion to dismiss for lack of personal jurisdiction. Following the filing of
briefs in support and in opposition to summary judgment, the court granted
summary judgment in favor of the defendant-aluminum producers and dismissed the
complaint with prejudice by order dated July 1, 1996. The court denied
plaintiff's subsequent motion for reconsideration by order entered on July 16,
1996.
On July 17, 1996, the plaintiff filed a notice of appeal to the United States
Court of Appeals for the Ninth Circuit from the United States District Court's
orders granting The Aluminum Association's motion to dismiss and the aluminum
producers' motion for summary judgment and the order denying the plaintiff's
motion for reconsideration. Plaintiff's appeal to the United States Court of
Appeals is currently in the process of being briefed.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
3.01 Alumax Inc. Restated By-Laws (as amended on September 5, 1996).
10.01 Agreement, dated as of June 28, 1996, by and between Minas Penoles, S.A. de C.V. and
The Fresnillo Company.
11.01 Calculation of Earnings per Common Share.
27.01 Financial Data Schedule. (for SEC use only)
</TABLE>
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<PAGE> 17
(b) Information concerning the Current Report on Form 8-K filed by the
Company during the quarter ended September 30, 1996 is presented below.
<TABLE>
<CAPTION>
Date of Report Matters Reported
- -------------- ----------------
<S> <C>
September 25, 1996 The Company reported the sale on September 25, 1996 of certain of its
fabricated products businesses in Western Europe and the United States to
Euramax International, Ltd. (Items 2 and 7). In addition, the Company and
Eduard Hueck GmbH & Co. KG ("Hueck") announced on October 10, 1996 that they
have entered into negotiations regarding the possible acquisition of Hueck by
the Company (Item 5).
</TABLE>
-17-
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Alumax Inc.
By /s/ Helen M. Feeney
---------------------------------------
Helen M. Feeney
Vice President and
Corporate Secretary
By /s/ Michael T. Vollkommer
---------------------------------------
Michael T. Vollkommer
Vice President and Controller
Date: November 12, 1996
-18-
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
3.01 Alumax Inc. Restated By-Laws (as amended on September 5, 1996).
10.01 Agreement, dated as of June 28, 1996, by and between Minas Penoles, S.A. de C.V.
and The Fresnillo Company.
11.01 Calculation of Earnings per Common Share.
27.01 Financial Data Schedule. (for SEC use only)
</TABLE>
-19-
<PAGE> 1
EXHIBIT 3.01
RESTATED BY-LAWS
OF
ALUMAX INC.
AS AMENDED ON SEPTEMBER 5, 1996
ARTICLE I
Stockholders
Section 1.1. Annual Meetings. An annual meeting of
stockholders shall be held for the election of Directors at such date, time and
place either within or without the State of Delaware as may be designated by
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of
stockholders may only be called pursuant to a resolution approved by a majority
of the Board of Directors or by the Chairman of the Board, to be held at such
date, time and place either within or without the State of Delaware as may be
stated in the notice of the meeting. Stockholders are not permitted to call a
special meeting or to require the Board of Directors to call a special meeting
of stockholders.
Section 1.3. Notice of Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the written
notice of any meeting shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting to each stockholder entitled to vote
at such meeting. If mailed, such notice shall be deemed to be given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records of the
Corporation.
Section 1.4. Adjournments. Any meeting of stockholders,
annual or special, may be adjourned from time to time, to reconvene at the same
or some other place, and notice need not be given of any such adjourned meeting
if the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the Corporation may transact
any business which might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of
<PAGE> 2
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 1.5. Quorum. At each meeting of stockholders, except
where otherwise provided by law or the Restated Certificate of Incorporation or
these By-laws, the holders of a majority of the outstanding shares of stock
entitled to vote on a matter at the meeting, present in person or represented
by proxy, shall constitute a quorum. For purposes of the foregoing, where a
separate vote by class or classes is required for any matter, the holders of a
majority of the outstanding shares of such class or classes, present in person
or represented by proxy, shall constitute a quorum to take action with respect
to that vote on that matter. Two or more classes or series of stock shall be
considered a single class if the holders thereof are entitled to vote together
as a single class at the meeting. In the absence of a quorum of the holders of
any class of stock entitled to vote on a matter, the holders of such class so
present or represented may, by majority vote, adjourn the meeting of such class
from time to time in the manner provided by Section 1.4 of these By-laws until
a quorum of such class shall be so present or represented. Shares of its own
capital stock belonging on the record date for the meeting to the Corporation
or to another corporation, if a majority of the shares entitled to vote in the
election of Directors of such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of the Corporation to vote stock, including but not limited to
its own stock, held by it in a fiduciary capacity.
Section 1.6. Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board of Directors, if any, or in the
absence of the Chairman of the Board of Directors by the President, or in the
absence of the President by a Vice President, or in the absence of the
foregoing persons by a chairman designated by the Board of Directors, or in the
absence of such designation by a chairman chosen at the meeting. The
Secretary, or in the absence of the Secretary an Assistant Secretary, shall act
as secretary of the meeting, but in the absence of the Secretary and any
Assistant Secretary, the chairman of the meeting may appoint any person to act
as secretary of the meeting.
The order of business at each such meeting shall be as
determined by the chairman of the meeting. The chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and
procedures and to do all such acts and things as are necessary or desirable for
the proper conduct of the meeting, including, without limitation, the
-2-
<PAGE> 3
establishment of procedures for the maintenance of order and safety,
limitations on the time allotted to questions or comments on the affairs of the
Corporation, restrictions on entry to such meeting after the time prescribed
for the commencement thereof and the opening and closing of the voting polls.
Section 1.7. Inspectors. Prior to any meeting of
stockholders, the Board of Directors or the President shall appoint one or more
inspectors to act at such meeting and make a written report thereof and may
designate one or more persons as alternate inspectors to replace any inspector
who fails to act. If no inspector or alternate is able to act at the meeting
of stockholders, the person presiding at the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspectors shall ascertain the number of
shares outstanding and the voting power of each, determine the shares
represented at the meeting and the validity of proxies and ballots, count all
votes and ballots, determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors and
certify their determination of the number of shares represented at the meeting
and their count of all votes and ballots. The inspectors may appoint or retain
other persons to assist them in the performance of their duties. The date and
time of the opening and closing of the polls for each matter upon which the
stockholders will vote at a meeting shall be announced at the meeting. No
ballot, proxy or vote, nor any revocation thereof or change thereto, shall be
accepted by the inspectors after the closing of the polls. In determining the
validity and counting of proxies and ballots, the inspectors shall be limited
to an examination of the proxies, any envelopes submitted therewith, any
information provided by a stockholder who submits a proxy by telegram,
cablegram or other electronic transmission from which it can be determined that
the proxy was authorized by the stockholder, ballots and the regular books and
records of the corporation, and they may also consider other reliable
information for the limited purpose of reconciling proxies and ballots
submitted by or on behalf of banks, brokers, their nominees or similar persons
which represent more votes than the holder of a proxy is authorized by the
record owner to cast or more votes than the stockholder holds of record. If
the inspectors consider other reliable information for such purpose, they
shall, at the time they make their certification, specify the precise
information considered by them, including the person or persons from whom they
obtained the information, when the information was obtained, the means by
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which the information was obtained and the basis for the inspectors' belief
that such information is accurate and reliable.
Section 1.8. Voting; Proxies. Unless otherwise provided in
the Restated Certificate of Incorporation, each stockholder entitled to vote at
any meeting of stockholders shall be entitled to one vote for each share of
stock held by such stockholder which has voting power upon the matter in
question. If the Restated Certificate of Incorporation provides for more or
less than one vote for any share on any matter, every reference in these
By-laws to a majority or other proportion of stock shall refer to such majority
or other proportion of the votes of such stock. Each stockholder entitled to
vote at a meeting of stockholders or to express consent or dissent to corporate
action in writing without a meeting may authorize another person or persons to
act for such stockholder by proxy, but no such proxy shall be voted or acted
upon after three years from its date, unless the proxy provides for a longer
period. A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power, regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the Corporation generally. A stockholder may revoke any proxy
which is not irrevocable by attending the meeting and voting in person or by
filing an instrument in writing revoking the proxy or another duly executed
proxy bearing a later date with the Secretary of the Corporation. Voting at
meetings of stockholders need not be by written ballot unless the holders of a
majority of the outstanding shares of all classes of stock entitled to vote
thereon present in person or represented by proxy at such meeting shall so
determine. Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of Directors. In all other matters, unless otherwise
provided by law or by the Restated Certificate of Incorporation or these
By-laws, the affirmative vote of the holders of a majority of the shares
present in person or represented by proxy at the meeting and entitled to vote
on the subject matter shall be the act of the stockholders. Where a separate
vote by class or classes is required, the affirmative vote of the holders of a
majority of the shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class or classes,
except as otherwise provided by law or by the Restated Certificate of
Incorporation or these By-laws.
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Section 1.9. Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of such meeting. If no
record date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the day
next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned
meeting.
In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty (60) days prior to
such action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
Section 1.10. List of Stockholders Entitled to Vote. The
Secretary shall prepare and make, at least ten (10) days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof and may be inspected by any
stockholder who is present.
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Section 1.11. Advance Notice of Stockholder Proposals. At
any annual or special meeting of stockholders, proposals by stockholders and
persons nominated for election as Directors by stockholders shall be considered
only if proper for action at the meeting and if advance notice thereof has been
timely given as provided herein and such proposals or nominations are otherwise
proper for consideration under applicable law and the Restated Certificate of
Incorporation and By-laws of the Corporation. Notice of any proposal to be
presented by any stockholder or of the name of any person to be nominated by
any stockholder for election as a Director of the Corporation at any meeting of
stockholders shall be delivered to the Secretary of the Corporation at its
principal executive office not less than sixty (60) nor more than ninety (90)
days prior to the date of the meeting; provided, however, that if the date of
the meeting is first publicly announced or disclosed (in a public filing or
otherwise) less than seventy (70) days prior to the date of the meeting, such
advance notice shall be given not more than ten (10) days after such date is
first so announced or disclosed. Public notice shall be deemed to have been
given more than seventy (70) days in advance of the annual meeting if the
Corporation shall have previously disclosed, in these By-laws or otherwise,
that the annual meeting in each year is to be held on a determinable date,
unless and until the Board of Directors determines to hold the meeting on a
different date. Any stockholder who gives notice of any such proposal shall
deliver therewith the text of the proposal to be presented and a brief written
statement of the reasons why such stockholder favors the proposal and setting
forth such stockholder's name and address, the number and class of all shares
of each class of stock of the Corporation beneficially owned by such
stockholder and any material interest of such stockholder in the proposal
(other than as a stockholder). Any stockholder desiring to nominate any person
for election as a Director of the Corporation shall deliver with such notice a
statement in writing setting forth the name of the person to be nominated, the
number and class of all shares of each class of stock of the Corporation
beneficially owned by such person, the information regarding such person
required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted
by the Securities and Exchange Commission (or the corresponding provisions of
any regulation subsequently adopted by the Securities and Exchange Commission
applicable to the Corporation), such person's signed consent to serve as a
Director of the Corporation if elected, such stockholder's name and address and
the number and class of all shares of each class of stock of the Corporation
beneficially owned by such stockholder. As used herein, shares "beneficially
owned" shall mean all shares as to which such person, together with such
person's affiliates and associates (as defined in Rule
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12b-2 under the Securities Exchange Act of 1934), may be deemed to beneficially
own pursuant to Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, as well as all shares as to which such person, together with such
person's affiliates and associates, has the right to become the beneficial
owner pursuant to any agreement or understanding, or upon the exercise of
warrants, options or rights to convert or exchange (whether such rights are
exercisable immediately or only after the passage of time or the occurrence of
conditions). The person presiding at the meeting, in addition to making any
other determinations that may be appropriate to the conduct of the meeting,
shall determine whether a proposal is proper for action at the meeting and
whether such notice has been duly given and shall direct that proposals and
nominees not be considered if such notice has not been given or the proposal is
otherwise not proper for action at the meeting.
ARTICLE II
Board of Directors
Section 2.1. Powers; Number; Qualifications. The business
and affairs of the Corporation shall be managed by or under the direction of
the Board of Directors, except as may be otherwise provided by law or in the
Restated Certificate of Incorporation. The Board of Directors shall consist of
three (3) or more members, the number thereof to be determined from time to
time by the Board of Directors. Directors need not be stockholders.
Section 2.2. Election; Term of Office; Resignation; Removal;
Vacancies. The Directors of the Corporation shall be divided into three
classes, as nearly equal in number as reasonably possible, as determined by the
Board of Directors, with the initial term of office of the first class of such
Directors to expire at the first annual meeting of stockholders thereafter, the
initial term of office of the second class of such Directors to expire at the
second annual meeting of stockholders thereafter and the initial term of office
of the third class of such Directors to expire at the third annual meeting
thereafter, with each class of Directors to hold office until their successors
have been duly elected and qualified. At each annual meeting of stockholders
following such initial classification and election, Directors elected to
succeed the Directors whose terms expire at such annual meeting shall be
elected to hold office for a term expiring at the annual meeting of
stockholders in the third year following the year of their election and until
their successors have been duly elected and qualified. If the number of
Directors is changed, any increase or decrease shall
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be apportioned among the classes so as to maintain or attain a number of
Directors in each class as nearly equal as reasonably possible, but no decrease
in the number of Directors may shorten the term of any incumbent Director. Any
Director may resign at any time upon written notice to the Board of Directors
or to the President or the Secretary of the Corporation. Such resignation
shall take effect at the time specified therein, and unless otherwise specified
therein no acceptance of such resignation shall be necessary to make it
effective. Any Director or the entire Board of Directors may be removed, with
cause in accordance with the provisions of the Restated Certificate of
Incorporation, by the holders of a majority of the shares then entitled to vote
at an election of Directors. Whenever the holders of any class or series of
stock are entitled to elect one or more Directors by the Restated Certificate
of Incorporation, the provisions of the preceding sentence shall apply to the
vote of the holders of the outstanding shares of that class or series and not
to the vote of the outstanding shares as a whole. Unless otherwise provided in
the Restated Certificate of Incorporation or these By-laws, vacancies and newly
created directorships resulting from any increase in the authorized number of
Directors elected by all of the stockholders having the right to vote as a
single class or from any other cause shall be filled by a majority of the
Directors then in office, although less than a quorum, or by the sole remaining
Director. Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more Directors by the Restated Certificate
of Incorporation, vacancies and newly created directorships of such class or
classes or series may be filled by a majority of the Directors elected by such
class or classes or series thereof then in office, or by the sole remaining
Director so elected. Any Director elected or appointed to fill a vacancy shall
hold office until the next election of the class of Directors of the Director
which such Director replaced, and until his or her successor is elected and
qualified or until his or her earlier resignation or removal.
Section 2.3. Regular Meetings. Regular meetings of the Board
of Directors may be held at such places within or without the State of Delaware
and at such times as the Board of Directors may from time to time determine,
and if so determined notice thereof need not be given.
Section 2.4. Special Meetings. Special meetings of the Board
of Directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board of Directors, if any, by
the President or by a majority of the Directors. Reasonable notice thereof
shall be given by the person or persons calling the meeting.
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Section 2.5. Participation in Meetings by Conference
Telephone Permitted. Unless otherwise restricted by the Restated Certificate
of Incorporation or these By-laws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors or of such committee, as the case may be, by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in
a meeting pursuant to this By-law shall constitute presence in person at such
meeting.
Section 2.6. Quorum; Vote Required for Action. At all
meetings of the Board of Directors a majority of the entire Board of Directors
shall constitute a quorum for the transaction of business. The vote of a
majority of the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors unless the Restated Certificate of
Incorporation or these By-laws shall require a vote of a greater number. In
case at any meeting of the Board of Directors a quorum shall not be present,
the members of the Board of Directors present may adjourn the meeting from time
to time until a quorum shall be present.
Section 2.7. Organization. Meetings of the Board of
Directors shall be presided over by the Chairman of the Board of Directors, if
any, or in the absence of the Chairman of the Board of Directors by the
President, if a member of the Board of Directors, or if the President is not a
member of the Board of Directors or in the President's absence by a chairman
chosen at the meeting. The Secretary, or in the absence of the Secretary an
Assistant Secretary, shall act as secretary of the meeting, but in the absence
of the Secretary and any Assistant Secretary, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 2.8. Action by Directors Without a Meeting. Unless
otherwise restricted by the Restated Certificate of Incorporation or these
By-laws, any action required or permitted to be taken at any meeting of the
Board of Directors, or of any committee thereof, may be taken without a meeting
if all members of the Board of Directors or of such committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee.
Section 2.9. Compensation of Directors. The stockholders or
the Board of Directors may from time to time by resolution fix the fees or
other compensation of the Directors for services as such to the Corporation,
including attendance at meetings of the Board of Directors or committees of the
Board.
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ARTICLE III
Committees
Section 3.1. Executive Committee. The Board of Directors
shall designate an Executive Committee to consist of three or more Directors.
The Board of Directors shall designate one of the members of the Executive
Committee as Chairman of the Executive Committee. The Executive Committee
shall have and may exercise, so far as may be permitted by law, all of the
powers and authority of the Board in the management of the business and affairs
of the Corporation during the intervals between meetings of the Board of
Directors, and may authorize the seal of the Corporation to be affixed to or
imprinted on all papers which may require it. The Board shall have the power
at any time to fill vacancies in, to change the membership of, or to dissolve,
the Executive Committee. The Executive Committee may hold meetings and make
rules for the conduct of its business and appoint such committees and
assistants as it shall from time to time deem necessary. A majority of the
members of the Executive Committee shall constitute a quorum. The Executive
Committee shall keep minutes of its meetings, in which minutes shall be
recorded all action taken, and all action of the Executive Committee shall be
reported to the Board at the meeting next succeeding such action. The
Executive Committee shall also be authorized and empowered to authorize the
issue of securities or other instruments of the Corporation including, but not
limited to, Common Stock, par value $0.01 per share, of the Corporation.
Section 3.2. Finance Committee. The Board of Directors shall
designate a Finance Committee to consist of three or more Directors. The Board
of Directors shall designate one of the members of the Finance Committee as
Chairman of the Finance Committee. The Finance Committee shall have the power
to authorize the investment from time to time of the liquid or working assets
of the Corporation in readily marketable securities not purchased as a
permanent or semi-permanent investment as a part of the Corporation's
operations, and to authorize the sale of any such investment. The Board shall
have power at any time to fill vacancies in, to change the membership of, or to
dissolve, the Finance Committee, and the Finance Committee shall not have power
to fill any vacancies in such Committee. The Finance Committee may hold
meetings and make rules for the conduct of its business and appoint such
committees as it shall from time to time deem necessary. The Finance Committee
shall elect its Secretary and may designate such other assistants as it shall
from time to time deem necessary. A majority of the members
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of the Finance Committee shall constitute a quorum. The Finance Committee
shall keep minutes of its meetings, in which minutes shall be recorded all
action taken, and all action of the Finance Committee shall be reported to the
Board at the meeting next succeeding such action.
Section 3.3. Audit Committee. The Board of Directors shall
designate an Audit Committee to consist of three or more Directors. No
Director who is also an officer shall be a member of the Audit Committee. The
Board of Directors shall designate one of the members of the Audit Committee as
Chairman of the Audit Committee. The Audit Committee shall recommend to the
Board a firm of independent public accountants, which shall conduct the annual
audit of the accounts of the Corporation, and the nature and scope of the
audit, which shall be in accordance with accepted accounting practices, and it
shall furnish the Board with a written report at least annually containing its
said recommendations and any comments it may desire to make about the financial
organization or accounting practices of the Corporation and the qualifications
or performance of its past or proposed auditing firm. The Audit Committee
shall recommend to the Board policies with regard to avoidance of employee
conflicts of interest and shall review the administration of such policies on a
regular basis. The Board shall have power at any time to fill vacancies in, to
change the membership of, or to dissolve, the Audit Committee, and the Audit
Committee shall not have power to fill any vacancies in such Committee. The
Audit Committee may hold meetings and make rules for the conduct of its
business. The Audit Committee shall elect its Secretary and may designate such
other assistants as it shall from time to time deem necessary. A majority of
the members of the Audit Committee shall constitute a quorum. The Audit
Committee shall keep minutes of its meetings, in which minutes shall be
recorded all action taken and all action of the Audit Committee shall be
reported to the Board at the meeting next succeeding such action.
Section 3.4. Nominating Committee. The Board of Directors
shall designate a Nominating Committee to consist of three or more Directors.
The Board of Directors shall designate one of the members of the Nominating
Committee who is not an officer of the Corporation as Chairman of the
Committee. The Nominating Committee shall recommend to the Board prospective
members of the Board of Directors. In fulfilling its duties, the Nominating
Committee shall consider suggestions from all sources it deems appropriate,
including stockholders. The Board shall have the power at any time to fill
vacancies in, to change the membership of, or to dissolve, the Nominating
Committee, and the Nominating Committee shall not have the power to fill any
vacancies in
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such Committee. The Nominating Committee may hold meetings and make rules for
the conduct of its business and appoint such committees as it may from time to
time deem necessary. The Nominating Committee shall elect its Secretary and
may designate such other assistants as it shall from time to time deem
necessary. A majority of the members of the Nominating Committee shall
constitute a quorum. The Nominating Committee shall keep minutes of its
meetings, in which minutes shall be recorded all action taken, and all action
of the Nominating Committee shall be reported to the Board at the meeting next
succeeding such action.
Section 3.5. Human Resources and Compensation Committee. The
Board of Directors shall designate a Human Resources and Compensation Committee
to consist of three or more Directors. No Director who is an officer of the
Corporation or its subsidiaries or who is otherwise employed by, or a
consultant to, the Corporation or its subsidiaries shall be a member of the
Human Resources and Compensation Committee. The Board of Directors shall
designate one of the members of the Human Resources and Compensation Committee
as Chairman of such Committee. The Human Resources and Compensation Committee
shall (i) establish, implement and monitor the Corporation's program for
executive development, succession planning and compensation of Executive
Officers and other senior managerial employees of the Corporation and (ii)
perform various administrative tasks with respect to certain employee benefit
matters. The Human Resources and Compensation Committee shall also be
authorized and empowered to authorize the issue of securities or other
instruments of the Corporation including, but not limited to, Common Stock, par
value $0.01 per share, of the Corporation in connection with any grant, award
or other transaction under or in connection with an employee benefit plan
maintained or sponsored by the Corporation, its subsidiaries or affiliated
companies or under any other compensatory contract, agreement or arrangement to
which the Corporation, its subsidiaries or affiliated companies is a party.
The Board shall have the power at any time to fill vacancies in, to change the
membership of, or to dissolve, the Human Resources and Compensation Committee,
and the Human Resources and Compensation Committee shall not have the power to
fill any vacancies in such Committee. The Human Resources and Compensation
Committee may hold meetings and make rules for the conduct of its business.
The Human Resources and Compensation Committee shall elect its Secretary and
may designate such other assistants as it shall from time to time deem
necessary. A majority of the members of the Human Resources and Compensation
Committee shall constitute a quorum. The Human Resources and Compensation
Committee shall keep minutes of its meetings, in which minutes shall be
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recorded all action taken, and all action of the Human Resources and
Compensation Committee shall be reported to the Board at the meeting next
succeeding such action.
Section 3.6. Other Committees. The Board of Directors may,
by resolution passed by a majority of the whole Board of Directors, designate
one or more other committees, each committee to consist of one or more of the
Directors of the Corporation, which shall and may exercise, so far as may be
permitted by law, such powers as shall be conferred or authorized by the
resolution appointing them. A majority of any such committee may determine its
action and fix the time and place of its meetings, unless the Board of
Directors shall otherwise provide. The Board shall have power at any time to
change the membership of any such committee, to fill vacancies, and to
discharge any such committee.
Section 3.7. Telephonic Participation in Meetings. Unless
otherwise restricted by the Restated Certificate of Incorporation of the
Corporation, or these By-laws, any member of any committee designated by the
Board may participate in a meeting of such committee through conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to this By-law shall constitute presence in person at such
meeting.
Section 3.8. Action by Written Consent. Unless otherwise
restricted by the Restated Certificate of Incorporation of the Corporation, or
by these By-laws, any action required or permitted to be taken at any meeting
of any committee of the Board of Directors may be taken without a meeting if
all members of such committee consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of such committee.
ARTICLE IV
Officers
Section 4.1. Officers; Election. As soon as practicable
after the annual meeting of stockholders in each year, the Board of Directors
shall elect a President and a Secretary, and it may, if it so determines, elect
from among its members a Chairman of the Board of Directors. The Board of
Directors may also elect one or more Vice Presidents, one or more Assistant
Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more
Assistant Treasurers and such other officers as the Board of Directors may deem
desirable or appropriate and may give any of them such further
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designations or alternate titles as it considers desirable. Any number of
offices may be held by the same person unless the Restated Certificate of
Incorporation or these By-laws otherwise provide.
Section 4.2. Term of Office; Resignation; Removal; Vacancies.
Unless otherwise provided in the resolution of the Board of Directors electing
any officer, each officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
officer may resign at any time upon written notice to the Board of Directors or
to the President or the Secretary of the Corporation. Such resignation shall
take effect at the time specified therein, and unless otherwise specified
therein no acceptance of such resignation shall be necessary to make it
effective. The Board of Directors may remove any officer with or without cause
at any time. Any such removal shall be without prejudice to the contractual
rights of such officer, if any, with the Corporation, but the election of an
officer shall not of itself create contractual rights. Any vacancy occurring
in any office of the Corporation by death, resignation, removal or otherwise
may be filled by the Board of Directors at any regular or special meeting or by
unanimous written consent.
Section 4.3. Powers and Duties. The officers of the
Corporation shall have such powers and duties in the management of the
Corporation as shall be stated in these By-laws or in a resolution of the Board
of Directors which is not inconsistent with these By-laws and, to the extent
not so stated, as generally pertain to their respective offices, subject to the
control of the Board of Directors. The Secretary shall have the duty to record
the proceedings of the meetings of the stockholders, the Board of Directors and
any committees in a book to be kept for that purpose. The Board of Directors
may require any officer, agent or employee to give security for the faithful
performance of his or her duties.
Section 4.4. Voting Upon Stock in Other Corporations. Unless
otherwise ordered by the Board of Directors, the Chairman of the Board or the
President or any Executive Vice President or any Vice President or the
Secretary or the Treasurer shall have full power and authority on behalf of the
Corporation to execute and deliver a proxy or proxies for and/or to attend and
to act and to vote at any meetings of stockholders of any corporation in which
the Corporation may hold stock, and at any such meeting shall possess and may
exercise any and all rights and powers incident to the ownership of such stock
and which, as the owner thereof, the Corporation might have possessed and
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exercised if present. The Board of Directors, by resolution, from time to
time, may confer like powers upon any other person or persons.
ARTICLE V
Stock
Section 5.1. Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by or in the name of
the Corporation by the Chairman of the Board of Directors, if any, or the
President or a Vice President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary, of the Corporation, representing
the number of shares of stock in the Corporation owned by such holder. If such
certificate is manually signed by one officer or manually countersigned by a
transfer agent or by a registrar, any other signature on the certificate may be
a facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.
If the Corporation is authorized to issue more than one class
of stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications or restrictions of
such preferences and/or rights shall be set forth in full or summarized on the
face or back of the certificate which the Corporation shall issue to represent
such class or series of stock, provided that, except as otherwise provided by
law, in lieu of the foregoing requirements, there may be set forth on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock a statement that the Corporation will furnish without
charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
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Section 5.2. Lost, Stolen or Destroyed Stock Certificates;
Issuance of New Certificates. The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner of
the lost, stolen or destroyed certificate, or such owner's legal
representative, to give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of such new
certificate.
ARTICLE VI
Miscellaneous
Section 6.1. Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.
Section 6.2. Seal. The Corporation may have a corporate seal
which shall have the name of the Corporation inscribed thereon and shall be in
such form as may be approved from time to time by the Board of Directors. The
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.
Section 6.3. Waiver of Notice of Meetings of Stockholders,
Directors and Committees. Whenever notice is required to be given by law or
under any provision of the Restated Certificate of Incorporation or these
By-laws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, Directors or members of a
committee of Directors need be specified in any written waiver of notice unless
so required by the Restated Certificate of Incorporation or these By-laws.
Section 6.4. Indemnification of Directors, Officers and
Employees. The Corporation shall indemnify to the full extent permitted by law
any person made or threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person or such person's testator or intestate is or was a
Director, officer or employee of the Corporation
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<PAGE> 17
or serves or served at the request of the Corporation any other enterprise as a
Director, officer or employee. Expenses, including attorneys' fees, incurred
by any such person in defending any such action, suit or proceeding shall be
paid or reimbursed by the Corporation promptly upon receipt by it of an
undertaking of such person to repay such expenses if it shall ultimately be
determined that such person is not entitled to be indemnified by the
Corporation. The rights provided to any person by this By-law shall be
enforceable against the Corporation by such person who shall be presumed to
have relied upon it in serving or continuing to serve as a Director, officer or
employee as provided above. For purposes of this By-law, the term
"Corporation" shall include any predecessor of the Corporation and any
constituent corporation (including any constituent of a constituent) absorbed
by the Corporation in a consolidation or merger; the term "other enterprise"
shall include any corporation, partnership, joint venture, trust or employee
benefit plan; service "at the request of the Corporation" shall include service
as a Director, officer or employee of the Corporation which imposes duties on,
or involves services by, such Director, officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed
to be indemnifiable expenses; and action by a person with respect to an
employee benefit plan which such person reasonably believes to be in the
interest of the participants and beneficiaries of such plan shall be deemed to
be action not opposed to the best interests of the Corporation.
The indemnification and payment of expenses provided by, or
granted pursuant to, this Section 6.4 shall not be deemed exclusive of any
other rights to which those seeking indemnification or payment of expenses may
be entitled under any by-law, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
Anything in these By-laws to the contrary notwithstanding, no
elimination of this Section 6.4, and no amendment of this Section 6.4 adversely
affecting the right of any person to indemnification hereunder, shall be
effective until the 60th day following notice to such person of such action,
and no elimination of or amendment to this Section 6.4 shall deprive any person
of his or her rights hereunder arising out of alleged or actual events or acts
occurring prior to such 60th day or actual or alleged failures to act prior to
such 60th day.
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<PAGE> 18
The Corporation shall not, except by elimination or amendment
of this Section 6.4 in a manner consistent with the preceding paragraph, take
any corporate action or enter into any agreement which prohibits, or otherwise
limits the rights of any person to, indemnification in accordance with the
provisions of this Section 6.4. The indemnification of any person provided by
this Section 6.4 shall continue after such person has ceased to be a Director,
officer or employee of the Corporation and shall inure to the benefit of such
person's heirs, executors, administrators and legal representatives.
Section 6.5. Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its Directors or
officers, or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its Directors or
officers are Directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the Director or officer
is present at or participates in the meeting of the Board of Directors or
committee thereof which authorizes the contract or transaction, or solely
because his or her or their votes are counted for such purpose, if: (1) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested Directors, even though the disinterested Directors be less than a
quorum; or (2) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (3) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a committee
thereof or the stockholders. Common or interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
Section 6.6. Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.
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Section 6.7. Amendment of By-laws. These By-laws may be
amended or repealed, and new By-laws adopted, by the Board of Directors, but
the stockholders entitled to vote may adopt additional By-laws and may amend or
repeal any By-law whether or not adopted by them.
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<PAGE> 1
EXHIBIT 10.01
THIS AGREEMENT ENTERED INTO AS OF JUNE 28, 1996, BY AND BETWEEN MINAS PENOLES,
S.A. DE C.V., A COMPANY INCORPORATED UNDER THE LAWS OF THE UNITED MEXICAN
STATES (HEREINAFTER "PENOLES"); AND THE FRESNILLO COMPANY, A COMPANY
INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK, U.S.A. (HEREINAFTER
"TFC").
W I T N E S S E T H:
WHEREAS, TFC is the owner of the fully issued, outstanding and non-assessable
shares of the capital stock set forth in Schedule "A" attached hereto
(hereinafter the "Shares") of Compania Fresnillo, S.A. de C.V., Compania Minera
Las Torres, S.A. de C.V., Minera La Encantada, S.A. de C.V., Minera Proano,
S.A. de C.V., Fresnillo Servicios, S.A. de C.V., and Fresnillo Exploraciones,
S.A. de C.V. (collectively the "Companies");
WHEREAS, TFC wishes to sell to PENOLES the Shares, including any interests in
exploration properties and projects owned and/or controlled by any of the
Companies; and
WHEREAS, PENOLES wishes to acquire and purchase the Shares.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
set forth, the parties hereto agree as follows:
1.- SALE OF SHARES
TFC hereby agrees to sell and transfer to PENOLES and PENOLES agrees to
purchase and acquire all of the Shares, including any exploration properties
and projects owned and/or controlled by any of the Companies, free and clear of
any lien or encumbrance, for an aggregate purchase price of One Hundred Thirty
Nine Million Nine Hundred Fifty One Thousand Two Hundred Forty U.S. Dollars
(US$139,951,240) less applicable Mexican withholding income tax of Twenty Two
Million Seven Hundred Seventy Thousand One Hundred Seventy Four and 80/100 U.S.
dollars (US$22,770,174.80), (the "Purchase Price"), payable at the closing to
be held at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York at 11:00 a.m. on July 1, 1996. The sales shall be effective as of 12:00
noon on June 30, 1996.
2.- CLOSING OF THE SALE OF SHARES
On the closing of the sale of the Shares:
(a) PENOLES shall wire transfer to TFC at such bank account in New York,
New York as TFC designates the Purchase Price in immediately available funds;
and
(b) TFC shall deliver to PENOLES (i) the Shares, duly endorsed or such
other documentation of transfer as the parties hereto may agree; (ii) a copy of
a certificate issued
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<PAGE> 2
by the appropriate authorities of the State of New York confirming that TFC is
in "good standing" to the extent that concept is recognized; (iii) a
Certificate of the Secretary of TFC confirming that TFC is a resident of the
United States with Federal Employer Identification Number 13-5593662 (TFC shall
deliver a Certificate of Residency, Form 6166, upon receipt from the United
States Internal Revenue Service), and (iv) a Certificate of the Secretary of
TFC certifying that TFC is entitled to relief under the Convention between the
Government of the United Mexican States and the Government of the United States
of America for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income and Protocol (the "Convention") because
it falls under the provisions of paragraph 1(d) or 1(f) of Article 17 of the
Convention.
3.- UNDERTAKINGS BY TFC
TFC hereby undertakes to (i) designate a representative resident in Mexico for
tax purposes and to notify the tax authorities of said designation within 15
days as of the designation as provided in Article 160 of the Mexican Income Tax
Law and to file such returns as are required under said Mexican Income Tax Law,
and (ii) provide PENOLES a copy of said designation, notice and returns filed
for the sale of the shares of the capital stock of Fresnillo Servicios, S.A. de
C.V. and Fresnillo Exploraciones, S.A. de C.V. and to provide PENOLES the
documents listed in Section 2(b)(ii), (iii) and (iv) for the sale of the shares
of the capital stock of Compania Minera Las Torres, S.A. de C.V. and Minera La
Encantada, S.A. de C.V., in order for PENOLES not to withhold any Mexican
income tax pursuant to the Convention.
4.- UNDERTAKINGS BY PENOLES
PENOLES hereby undertakes to:
(a) Cause the Companies to cooperate fully with TFC, its officers,
representatives and advisors, providing such information, documents and access
to each of the Companies' accounting, tax, financial and corporate records as
may be required by TFC for the determination of TFC's tax cost of the Shares in
order for TFC to define any Mexican income tax applicable to the sale and
purchase of the Shares as provided in Section 3(i) above;
(b) Give notice to Mexico's Federal Competition Commission as required
under Mexico's Federal Economic Competition Law with respect to the purchase of
the shares of capital stock of Compania Fresnillo, S.A. de C.V.:
(c) Withhold the applicable 20% Mexican income tax from the portion of
the Purchase Price applicable to the sale of the shares of the capital stock of
Compania Fresnillo, S.A. de C.V. and Minera Proano, S.A. de C.V., pay it to
the appropriate Mexican tax authorities and to provide a copy of the
corresponding tax return to TFC;
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<PAGE> 3
(d) Cause each of the Companies to hold shareholders meetings
within 30 calendar days following the closing, designating new Directors and
their respective Alternates in lieu of the Directors and Alternates designated
by TFC and releasing and indemnifying such TFC designees from any liability
they may have incurred during their tenure;
(e) Give notice within 30 calendar days following the closing, to
each of the Companies of the acquisition of the Shares so that PENOLES becomes
the shareholder of record of said Shares; and
(f) Cause each of the Companies to give notice within 30 calendar
days following the closing, to the Mexican Foreign Investment Registry and the
Public Registry of Mining of the acquisition of the Shares.
5.- RELEASE AND INDEMNIFICATION
PENOLES shall and shall cause each of the Companies to jointly and severally
indemnify and save harmless TFC and its stockholder Alumax Inc., and their
respective directors, officers, employees, agents, affiliates, successors, and
assigns as well as their representatives on the Boards of Directors of the
Companies from any and all actions, claims, demands or causes of action and any
and all costs, expenses, damages, losses, or liabilities, whether contingent or
otherwise, whatsoever relating in any way to the Companies, including, without
limitation, registration and recordal fees, exploration costs, development
costs, environmental claims, labor claims, taxes or royalty payments.
6.- SURVIVAL OF OBLIGATIONS
All obligations of each of the parties hereto in Sections 3, 4 and 5 above
shall survive the closing and continue indefinitely.
7.- NOTICES
Unless otherwise provided herein, any notice or communication to any party
hereto may be given by delivering the same by hand to a representative of such
party or by cable or telecopier or by registered, postage prepaid mail,
addressed as follows:
(a) If to PENOLES:
Minas Penoles, S.A. de C.V.
Rio de la Plata 48, 15th Floor
Col. Cuauhtemoc
06500 Mexico, D.F.
Att'n: Jamie Lomelin, President
Telecopier No. (525) 231-3569
3
<PAGE> 4
(b) If to TFC:
The Fresnillo Company
c/o Alumax Inc.
5655 Peachtree Parkway
Norcross, Georgia 30092-2812
Att'n: Vice President and General Counsel
Telecopier No. (770)246-6769
or to such other address as the parties may from time to time designate for
themselves in writing and any such notice, so cabled, telecopied or mailed
shall be deemed to have been made and received at the latest on the business
day following the cabling or telecopying, or on the fifth business day
following the mailing thereof.
8.- EXPENSES
Each party hereto shall be responsible for its own costs and expenses,
including legal, administrative and tax costs as well as travel expenses.
9.- INUREMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
10.- ARBITRATION
In the event of TFC and PENOLES being unable to resolve any dispute under this
Agreement, it shall be resolved through binding arbitration. Either party may
initiate resolution of such dispute through binding arbitration, by giving
written notice of such decision to the other party. Such notice shall identify
the arbitrator nominated by such party and the other party shall have twenty
days to nominate a second arbitrator. Within twenty days after the nomination
of the second arbitrator by the party receiving the election to arbitrate or by
the American Arbitration Association, as hereinafter provided, the two
arbitrators shall jointly nominate a third arbitrator to act as chairman. In
the event of being unable to agree on such an arbitrator, TFC and PENOLES shall
proceed to the American Arbitration Association for the nomination of this
arbitrator. If either of TFC or PENOLES fails to nominate its own arbitrator
the said American Arbitration Association shall do so at the request of the
other party. To the extent not otherwise provided in this Section, the
arbitration shall be conducted in accordance with the rules of International
Arbitration of the American Arbitration Association. The arbitration
proceedings will take place in New York, New York in the English language. All
costs and expenses of any such arbitration shall be borne by the parties as
determined by the arbitrators. Arbitrators need not be nationals of countries
other than the United States or Mexico. The arbitrators shall interpret and
enforce this Agreement to the fullest extent possible in accordance with its
terms but if a dispute cannot be resolved by application of that standard, they
may decide ex aequo et bono. A
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<PAGE> 5
judgment upon the award rendered may be entered into any court of competent
jurisdiction or application may be made to such court for a judicial acceptance
of the award or an order of enforcement, as the case may be.
11.- SECTION HEADINGS
Section headings are inserted for the sake of convenience only and shall not be
used in construing or interpreting this Agreement.
12.- GOVERNING LAW AND INTERPRETATION
This Agreement shall be governed and interpreted in accordance with the
internal laws of the State of New York, United States of America, without
regard to choice of law rules as if this Agreement was executed and performance
hereunder was entirely within the State of New York. One or more specific
agreements may be executed by and between TFC and PENOLES in respect of the
sale of the shares of the capital stock of one or more of the Companies. In
the event that the terms and conditions of any such separate agreement is
inconsistent or conflicts with the terms and conditions of this Agreement, the
terms and conditions of this Agreement shall prevail and govern the transaction
or issue.
13.- ENTIRE AGREEMENT
This Agreement sets forth the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
cancels any and all prior agreements and understandings among the parties,
express or implied, oral or in writing.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
MINAS PENOLES, S.A. DE C.V.
Per: /s/ Jaime Lomelin
---------------------------
Name: Jaime Lomelin
Title: President
THE FRESNILLO COMPANY
Per: /s/ R.P. Wolf
---------------------------
Name: R.P. Wolf
Title: Vice-President
5
<PAGE> 6
SCHEDULE A
<TABLE>
<CAPTION>
COMPANY NUMBER OF SHARES SERIES %
- ------- ---------------- ------ -
<S> <C> <C> <C>
Compania Fresnillo, S.A. de C.V. 1,840,200 B 40.0
Compania Minera Las Torres, S.A. de C.V. 14,100 B 14.10
Minera La Encantada, S.A. de C.V. 14,100 B 14.10
Minera Proano, S.A. de C.V. 684 B 0.040592
Fresnillo Servicios, S.A. de C.V. 400,400 B 40.0
Fresnillo Exploraciones, S.A. de C.V. 1,041,600 B 40.0
</TABLE>
6
<PAGE> 1
EXHIBIT 11.01
ALUMAX INC.
CALCULATION OF EARNINGS PER COMMON SHARE
(In Millions, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary earnings per common share
1. Net earnings ....................................... $52.4 $43.0 $230.9 $192.6
2. Deduct -- Series A Convertible
Preferred dividends .............................. (2.3) (2.3) (7.0) (7.0)
----- ----- ------ ------
3. Earnings applicable to common shares ............... $50.1 $40.7 $223.9 $185.6
===== ===== ====== ======
4. Average primary shares outstanding ................. 45.6 45.4 45.6 45.2
===== ===== ====== ======
5. Primary earnings per common share
(line 3 divided by line 4) ....................... $1.10 $ .90 $ 4.91 $ 4.11
===== ===== ====== ======
Fully diluted earnings per common share
6. Earnings applicable to common shares ............... $50.1 $40.7 $223.9 $185.6
7. Add -- Series A Convertible Preferred dividends .... (2.3) (2.3) (7.0) (7.0)
----- ----- ------ ------
8. Earnings applicable to common shares ............... $52.4 $43.0 $230.9 $192.6
===== ===== ====== ======
9. Average fully diluted shares outstanding ........... 55.2 55.0 55.2 54.8
===== ===== ====== ======
10. Fully diluted earnings per common share
(line 8 divided by line 9) ....................... $0.95 $ .78 $ 4.18 $ 3.51
===== ===== ====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED FINANCIAL STATEMENTS OF ALUMAX INC. AT SEPTEMBER 30, 1996
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 68
<SECURITIES> 0
<RECEIVABLES> 470
<ALLOWANCES> 18
<INVENTORY> 524
<CURRENT-ASSETS> 1,165
<PP&E> 3,019
<DEPRECIATION> 1,016
<TOTAL-ASSETS> 3,343
<CURRENT-LIABILITIES> 499
<BONDS> 674
0
2
<COMMON> 0
<OTHER-SE> 1,627
<TOTAL-LIABILITY-AND-EQUITY> 3,343
<SALES> 2,463
<TOTAL-REVENUES> 2,463
<CGS> 1,970
<TOTAL-COSTS> 2,279
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5
<INTEREST-EXPENSE> 50
<INCOME-PRETAX> 390
<INCOME-TAX> 159
<INCOME-CONTINUING> 231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 231
<EPS-PRIMARY> 4.91
<EPS-DILUTED> 4.18
</TABLE>
