-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KYXBh1/ShyAjSlAvpRovdkSO0lM1kBWEr3CzYJmGwCJpTO7tYhhFggyX/X8igkvQ d6e1K9IG9Z2oLMrfWgWIEg== 0000950147-97-000439.txt : 19970701 0000950147-97-000439.hdr.sgml : 19970701 ACCESSION NUMBER: 0000950147-97-000439 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHELPS DODGE CORP CENTRAL INDEX KEY: 0000078066 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 131808503 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00082 FILM NUMBER: 97633503 BUSINESS ADDRESS: STREET 1: 2600 NORTH CENTRAL AVE CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6022348100 MAIL ADDRESS: STREET 1: 2600 NORTH CENTRAL AVENUE CITY: PHOENIX STATE: AZ ZIP: 85004-3089 11-K 1 ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K --------- (Mark One) [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE NO LONGER REQUIRED] For the fiscal year ended December 31, 1996 --------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ____________________ to ___________________ Commission file number 1-82 ------- PHELPS DODGE EMPLOYEE SAVINGS PLAN ---------------------------------- PHELPS DODGE CORPORATION ------------------------ 2600 North Central Avenue Phoenix, Arizona 85004-3089 SIGNATURES ---------- The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee has duly caused this Annual Report to be signed by the undersigned thereunto duly authorized. PHELPS DODGE EMPLOYEE SAVINGS PLAN Date: By: ------------------------ ------------------------------- John C. Replogle, Chairman Benefits Administration Committee -2- PHELPS DODGE EMPLOYEE SAVINGS PLAN ---------------------------------- FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION ----------------------------------------------- * * * DECEMBER 31, 1996 AND 1995 -------------------------- -3- PHELPS DODGE EMPLOYEE SAVINGS PLAN ---------------------------------- INDEX ----- Page ---- Report of Independent Accountants----------------------------------------- 5 Statement of Net Assets Available For Benefits, with Fund Information----- 6 Statement of Changes in Net Assets Available for Benefits, with Fund Information--------------------------------------------------------------- 8 Notes to Financial Statements--------------------------------------------- 10 Additional Information: * I. Schedule of Assets Held for Investment Purposes at December 31, 1996---------------------------------------------- 18 II. Schedule of Reportable Transactions for the Year Ended December 31, 1996---------------------------------------- 19 * Other schedules required by Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. -4- Report of Independent Accountants To the Benefits Administration Committee and Participants of the Phelps Dodge Employee Savings Plan In our opinion, the financial statements listed in the accompanying index present fairly, in all material respects, the net assets available for benefits of the Phelps Dodge Employee Savings Plan at December 31, 1996 and 1995, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Benefits Administration Committee (the Committee); our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Committee, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information included in Schedules I and II is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by ERISA. The Fund Information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. Schedules I and II and the Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PRICE WATERHOUSE LLP Phoenix, Arizona June 20, 1997 -5- Phelps Dodge Employee Savings Plan ---------------------------------- Statement of Net Assets Available for Benefits, With Fund Information --------------------------------------------------------------------- December 31, 1996 ----------------- (in thousands)
Phelps Occidental Inter- Dodge Petroleum Money Interest Equity S&P 500 Growth national Small CAP Common Common Market Income Balanced Income Index Stock Equity Equity Stock Stock Loan Assets Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total - --------------------------- ------- -------- -------- ------ ------- ------ -------- --------- ------- -------- ---- ----- Investments, at Current Value (cost basis $261,821): Common Stocks $0 $0 $0 $0 $0 $0 $0 $0 $46,344 $228 $0 $46,572 Mutual Funds 29,930 0 1,620 51,044 3,675 68,482 2,954 4,311 0 0 0 162,016 Guaranteed Investment Contracts 0 49,793 0 0 0 0 0 0 0 0 0 49,793 Loans to Participants 0 0 0 0 0 0 0 0 0 0 15,139 15,139 ------- ------- ------ ------- ------ ------- ------ ------ ------- ---- ------- -------- 29,930 49,793 1,620 51,044 3,675 68,482 2,954 4,311 46,344 228 15,139 273,520 ------- ------- ------ ------- ------ ------- ------ ------ ------- ---- ------- -------- Receivables: Loan Repayments 75 92 2 82 8 138 4 8 83 0 (492) 0 Employee Contributions 134 176 10 204 27 316 20 31 194 0 0 1,112 Employer Contributions 1,242 1,457 89 1,768 266 2,483 211 297 1,515 0 0 9,328 ------- ------- ------ ------- ------ ------- ------ ------ ------- ---- ------- -------- 1,451 1,725 101 2,054 301 2,937 235 336 1,792 0 (492) 10,440 ------- ------- ------ ------- ------ ------- ------ ------ ------- ---- ------- -------- Net Assets Available for Benefits $31,381 $51,518 $1,721 $53,098 $3,976 $71,419 $3,189 $4,647 $48,136 $228 $14,647 $283,960 ======= ======= ====== ======= ====== ======= ====== ====== ======= ==== ======= ========
See Accompanying Notes to Financial Statements -6- Phelps Dodge Employee Savings Plan ---------------------------------- Statement of Net Assets Available for Benefits, With Fund Information --------------------------------------------------------------------- December 31, 1995 ----------------- (in thousands)
Phelps Occidental Dodge Petroleum Money Interest Equity Growth Common Common Market Income Income Stock Stock Stock Loan Assets Fund Fund Fund Fund Fund Fund Fund Total - ---------------------------------- ------- -------- ------- ------ ------- ----------- ------ ------- Investments, at Current Value (cost basis $194,125): Common Stocks $0 $0 $0 $0 $42,165 $247 $0 $42,412 Mutual Funds 24,526 0 37,218 63,762 0 0 0 125,506 Guaranteed Investment Contracts 0 46,023 0 0 0 0 0 46,023 Loans to Participants 0 0 0 0 0 0 12,790 12,790 ------- ------- ------- ------- ------- ---- ------- -------- 24,526 46,023 37,218 63,762 42,165 247 12,790 226,731 ------- ------- ------- ------- ------- ---- ------- -------- Receivables: Loan Repayments 63 92 64 106 64 0 (389) 0 Employee Contributions 133 202 180 320 200 0 0 1,035 Employer Contributions 1,194 1,651 1,684 2,692 1,536 0 0 8,757 ------- ------- ------- ------- ------- ---- ------- -------- 1,390 1,945 1,928 3,118 1,800 0 (389) 9,792 ------- ------- ------- ------- ------- ---- ------- -------- Net Assets Available for Benefits $25,916 $47,968 $39,146 $66,880 $43,965 $247 $12,401 $236,523 ======= ======= ======= ======= ======= ==== ======= ========
See Accompanying Notes to Financial Statements -7- Phelps Dodge Employee Savings Plan ---------------------------------- Statement of Changes in Net Assets Available for Benefits, With Fund Information - -------------------------------------------------------------------------------- Year Ended December 31, 1996 ---------------------------- December 31, 1996 ----------------- (in thousands)
Money Interest Equity S&P 500 Growth Market Income Balanced Income Index Stock Fund Fund Fund Fund Fund Fund - ----------------------------------------- -------- -------- -------- ------- ------- -------- Additions to Net Assets Attributed to: Investment Income: Realized Gains (Losses) on Investments $0 $0 $2 $589 $68 ($1,718) Change in Unrealized Appreciation (Depreciation) 0 0 (13) 4,667 282 (1,722) Dividends 1,280 0 115 3,140 0 10,688 Interest 152 2,486 3 28 6 44 ------- ------- ------ ------- ------ ------- 1,432 2,486 107 8,424 356 7,292 ------- ------- ------ ------- ------ ------- Transfers from Laurinburg Savings Plan 410 1,336 0 387 0 500 (Note 1a) ------- ------- ------ ------- ------ ------- Contributions: Employee 1,987 2,569 106 2,803 212 4,805 Employer 1,875 2,284 110 2,597 318 3,857 ------- ------- ------ ------- ------ ------- 3,862 4,853 216 5,400 530 8,662 ------- ------- ------ ------- ------ ------- Total Additions 5,704 8,675 323 14,211 886 16,454 ------- ------- ------ ------- ------ ------- Deductions from Net Assets Attributed to: Distributions to Participants and Beneficiaries (1,782) (3,210) (1) (2,087) (55) (2,702) Other Charges, Net 11 (21) 4 2 0 5 Loans to Participants, Net of Repayments (3) 4 15 (231) (12) (338) Fund Exchanges, Net 1,535 (1,898) 1,380 2,057 3,157 (8,880) ------- ------- ------ ------- ------ ------- Total Deductions (239) (5,125) 1,398 (259) 3,090 (11,915) ------- ------- ------ ------- ------ ------- Increase/(Decrease) in Net Assets During the Year 5,465 3,550 1,721 13,952 3,976 4,539 Net Assets Available for Benefits: Beginning of Year 25,916 47,968 0 39,146 0 66,880 ------- ------- ------ ------- ------ ------- End of Year $31,381 $51,518 $1,721 $53,098 $3,976 $71,419 ======= ======= ====== ======= ====== ======= Phelps Occidental Dodge Petroleum International Small CAP Common Common Equity Equity Stock Stock Loan Fund Fund Fund Fund Fund Total ------------ -------------- --------- ----------- ------ --------- Additions to Net Assets Attributed to: Investment Income: Realized Gains (Losses) on Investments $25 $20 $770 $6 $0 ($238) Change in Unrealized Appreciation (Depreciation) 103 (15) 2,873 19 0 6,194 Dividends 106 291 1,335 10 0 16,965 Interest 5 6 35 0 1,232 3,997 ------ ------ ------- ---- ------- -------- 239 302 5,013 35 1,232 26,918 ------ ------ ------- ---- ------- -------- Transfers from Laurinburg Savings Plan 0 0 0 0 713 3,346 (Note 1a) ------ ------ ------- ---- ------- -------- Contributions: Employee 253 427 2,754 0 0 15,916 Employer 249 356 2,337 0 0 13,983 ------ ------ ------- ---- ------- -------- 502 783 5,091 0 0 29,899 ------ ------ ------- ---- ------- -------- Total Additions 741 1,085 10,104 35 1,945 60,163 ------ ------ ------- ---- ------- -------- Deductions from Net Assets Attributed to: Distributions to Participants and Beneficiaries (30) (6) (2,311) 0 (534) (12,718) Other Charges, Net 4 5 (12) (6) 0 (8) Loans to Participants, Net of Repayments 28 (5) (293) 0 835 0 Fund Exchanges, Net 2,446 3,568 (3,317) (48) 0 0 ------ ------ ------- ---- ------- -------- Total Deductions 2,448 3,562 (5,933) (54) 301 (12,726) ------ ------ ------- ---- ------- -------- Increase/(Decrease) in Net Assets During the Year 3,189 4,647 4,171 (19) 2,246 47,437 Net Assets Available for Benefits: Beginning of Year 0 0 43,965 247 12,401 236,523 ------ ------ ------- ---- ------- -------- End of Year $3,189 $4,647 $48,136 $228 $14,647 $283,960 ====== ====== ======= ==== ======= ========
-8- Phelps Dodge Employee Savings Plan ---------------------------------- Statement of Changes in Net Assets Available for Benefits, With Fund Information - -------------------------------------------------------------------------------- Year Ended December 31, 1995 ---------------------------- (in thousands)
Phelps Occidental Dodge Petroleum Money Interest Equity Growth Common Common Market Income Income Stock Stock Stock Loan Fund Fund Fund Fund Fund Fund Fund Total - ----------------------------------- -------- ---------- -------- -------- -------- ------------ ------ ------- Additions to Net Assets Attributed to: Investment Income: Realized Gains (Losses) on Investments $0 $0 $357 $869 ($67) $3 $0 $1,162 Change in Unrealized Appreciation (Depreciation) 0 0 6,297 12,045 814 24 0 19,180 Dividends 1,300 0 2,142 3,689 1,188 12 0 8,331 Interest 8 2,438 2 4 14 0 956 3,422 ------- ------- ------- ------- ------- ---- ------- -------- 1,308 2,438 8,798 16,607 1,949 39 956 32,095 ------- ------- ------- ------- ------- ---- ------- -------- Contributions: Employee 1,733 2,766 2,219 3,775 2,477 0 0 12,970 Employer 1,760 2,547 2,380 3,826 2,277 0 0 12,790 ------- ------- ------- ------- ------- ---- ------- -------- 3,493 5,313 4,599 7,601 4,754 0 0 25,760 ------- ------- ------- ------- ------- ---- ------- -------- Total Additions 4,801 7,751 13,397 24,208 6,703 39 956 57,855 ------- ------- ------- ------- ------- ---- ------- -------- Deductions from Net Assets Attributed to: Distributions to Participants and Beneficiaries (1,770) (2,336) (2,270) (2,512) (2,056) (16) (150) (11,110) Other Charges, Net 39 1 (6) (4) (28) (13) (21) (32) Loans to Participants, Net of 0 Repayments (60) (99) (66) (268) (213) 0 706 0 Fund Exchanges, Net 467 (1,413) 332 242 413 (41) 0 0 ------- ------- ------- ------- ------- ---- ------- -------- Total Deductions (1,324) (3,847) (2,010) (2,542) (1,884) (70) 535 (11,142) ------- ------- ------- ------- ------- ---- ------- -------- Increase/(Decrease) in Net Assets During the Year 3,477 3,904 11,387 21,666 4,819 (31) 1,491 46,713 Net Assets Available for Benefits: Beginning of Year 22,439 44,064 27,759 45,214 39,146 278 10,910 189,810 ------- ------- ------- ------- ------- ---- ------- -------- End of Year $25,916 $47,968 $39,146 $66,880 $43,965 $247 $12,401 $236,523 ======= ======= ======= ======= ======= ==== ======= ========
See Accompanying Notes to Financial Statements -9- NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTE 1 - DESCRIPTION OF PLAN - ---------------------------- a. General ------- The Phelps Dodge Corporation Savings and Deferred Profit Sharing Plan (the Plan), a defined contribution plan, was established by Phelps Dodge Corporation (the Corporation) effective January 1, 1953, for the benefit of eligible salaried employees (the Participants). Hourly employees became eligible for the savings feature of the Plan on April 1, 1989. Subsequently, the Plan name was changed to Phelps Dodge Employee Savings Plan. Employees at Phelps Dodge Magnet Wire's El Paso and Laurinburg facilities became eligible to participate in the savings feature of the Plan on April 1, 1994. Salaried employees at that El Paso facility became eligible for the profit sharing feature of the Plan on January 1, 1995. Salaried employees at Phelps Dodge High Performance Conductors in West Caldwell, New Jersey, became eligible to participate in the savings feature of the Plan on July 1, 1996. The Laurinburg Savings Plan was merged into this Plan during November 1996. The Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA). A brief description of the Plan is included in the following paragraphs. Participants should refer to the Plan document for a complete description of Plan provisions. b. Administration -------------- The Plan is sponsored by the Corporation and administered by the Benefits Administration Committee (the Committee) composed of six employees of the Corporation who are appointed by the Corporation's Board of Directors. Plan assets are held by a trust (the Trust) administered by M & I Marshall and Ilsley Trust Company of Arizona (the Trustee). Fees and expenses of the Trust, other than brokerage commissions and taxes paid in connection with security transactions, and other expenses relating to the administration of the Plan are currently paid by the Corporation. c. Investment Options ------------------ Participant investments are self-directed. The Trust is comprised of the following investment funds: Money Market Fund - high quality, short-term cash instruments including certificates of deposit and U.S. Treasury bills issued by banks, corporations and the U.S. government or its agencies. Interest Income Fund - high quality government, corporate and mortgage backed debt and -10- other fixed income securities. Equity Income Fund - income-producing stocks with demonstrated higher returns than the overall market; a portion may be invested in bonds or other fixed income securities, especially those convertible to stocks. Growth Stock Fund - primarily invests in stocks of mid-sized companies whose stock is expected to grow faster than the overall market. Phelps Dodge Common Stock Fund - invests only in common stock of Phelps Dodge Corporation. Effective March 15, 1996, four new investment fund options were added: S&P 500 Index Fund - primarily stocks of the same companies as in the S&P 500 Index. Balanced Fund - a mix of stocks, U.S. Treasury bonds and money market cash instruments; the allocation of assets may shift substantially from time-to-time. International Equity Fund - invests in stocks of European and Pacific Basin companies and government securities of developed and developing countries. Small Cap Equity Fund - invests in a combination of small and mid-sized value and growth stocks. In addition, certain participants hold assets in the Occidental Petroleum Common Stock Fund as a result of the transfer of assets from the Columbian Chemicals Company plan. Participant loans are held in a separate Loan Fund. d. Contributions ------------- A profit sharing contribution made for certain salaried and Phelps Dodge Mercantile hourly employee participants by the Corporation (the Company Profit Sharing Contribution) was limited to the lesser of 4% for the years 1996 or earlier, and 8% for 1997 and thereafter, of consolidated net income of the Corporation or 7 1/2% of the aggregate eligible base pay of Participants and can be made only to the extent that it does not reduce consolidated net income below $0.50 per common share for such year after provision for payment of preferred and preference share dividends. Profit sharing contributions, which are included in Employer Contributions in the Statement of Net Assets Available for Benefits, With Fund Information, totaled $8,885,000 for 1996, and $8,344,000 for 1995. Participants were allowed to make voluntary contributions from 1% to 10% of their base pay on an after-tax basis (After-tax Contributions) to the Plan by payroll deduction from July 1, 1986 to March 31, 1989. Effective April 1, 1989, these voluntary After-tax Contributions were eliminated and Participants became eligible to make pretax contributions (Pretax Contributions), -11- subject to certain limitations, equal to 2% - 10% of their base pay before March 15, 1996, 1% - 10% after that date and up to 100% of their PD Partners payments as of October 1, 1996, and up to 16% for certain hourly employees at a later date to be designated by the Committee. Pretax Contributions are eligible for a matching contribution from the Corporation (Company Matching Contribution) equal to 50% of the first 5% of the base pay deferred. All contributions are invested in one or more of the investment funds available within the Plan as elected by participants. Participants are fully vested in their total account balance. e. Distributions ------------- Participants' interests in the Trust become distributable upon severance of their service with the Corporation or to their beneficiaries in the event of their death or, effective July 1, 1995, upon attaining age 59 1/2. The distribution may be a single lump sum or a series of substantially equal annual, quarterly or monthly cash installments beginning no earlier than age 55 and continuing over a period not to exceed 10 years, at the election of the Participant or beneficiary. Distributions are generally made in cash, although distributions from the Phelps Dodge Common Stock Fund and Occidental Petroleum Stock Fund may also be made in common shares. Effective March 15, 1996, cash distributions are based upon the market price of the funds within two days prior to the time of distribution. Previously, accounts were valued monthly and cash distributions were based on the market price of funds about one month prior to the time of distribution. Participants may withdraw their After-tax Contributions and earnings thereon at any time. The Plan also provides, with certain limitations, for hardship withdrawals from employee Pretax, Company Matching and Company Profit Sharing Contributions; however, earnings on any of these contributions are ineligible for hardship withdrawal. Hardship withdrawals are not granted unless other financial resources are not reasonably available, including after-tax savings or a loan from the Plan. All withdrawals or distributions are made in accordance with procedures outlined in the Plan document. f. Loans ----- Participants may borrow amounts as provided in the Plan. Up to two loans may be borrowed and are repayable over a maximum of 5 years with the exception of loans for the purchase of a primary residence which may extend to 15 years. The minimum loan is $1,000 and the maximum loan is an amount equal to $50,000 minus the participant's highest outstanding loand balance during the past 12 months. All loans bear the Trustee's prime interest rate plus 2% at the end of the month preceding the month in which the loan is applied for. The prime rate at December 31, 1996 was 8.25%. Loans are repaid by payroll deduction and interest is credited to Participant accounts. Loans are secured by the Participant's previous contributions to the Plan. g. Plan Termination ---------------- The Plan may be amended or terminated at any time by the Corporation. No such action may cause any portion of the Trust to revert to the Corporation or to be used or diverted for any purpose other than for the exclusive benefit of Participants or their beneficiaries. -12- NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - --------------------------------------------------- The financial statements of the Plan are prepared on the accrual basis of accounting. Plan investments, other than Guaranteed Investment Contracts, are presented at fair value. The fair values of common stock and mutual fund shares are based upon the closing market price on the valuation date. The Guaranteed Investment Contracts are valued based upon their respective face values plus accrued interest on the valuation date. Participant loans are valued at amounts advanced to participants less principal payments received. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Security transactions are recorded on a trade date basis. Expenses paid by the Plan in connection with such transactions include brokerage commissions and taxes which are included in the cost of securities purchased and deducted from the proceeds of securities sold. Realized gains (losses) resulting from the sale of investments are based upon carrying value at the end of the prior year or the acquisition date if later. The change in unrealized appreciation (depreciation) is determined by comparison of the carrying value at the end of the prior year or the acquisition date if later. Dividend income is recognized on the ex-dividend date. Interest income is recognized as earned. Employer and employee contributions are recognized on the accrual basis. Benefit obligations for persons who have withdrawn from participation in the Plan are not recorded as liabilities in the accompanying financial statements and are as follows: December 31, 1996 1995 ---- ---- Money Market Fund------------------------------- 277,004 85,000 Interest Income Fund---------------------------- 73,620 151,000 Balanced Fund----------------------------------- 34,929 - Equity Income Fund------------------------------ 424,795 288,000 S&P 500 Index Fund------------------------------ 18,472 - Growth Stock Fund------------------------------- 456,030 393,000 International Equity Fund----------------------- 13,241 - Small CAP Equity Fund--------------------------- 13,377 - Phelps Dodge Common Stock Fund------------------ 645,308 173,000 Loan Fund--------------------------------------- 66,948 72,000 -13- NOTE 3 - INVESTMENTS - -------------------- The current value of the following investments are individually equal to or greater than 5% of total investments at: December 31, 1996 1995 ---- ---- (in thousands) Barclays Money Market Fund I--------------------- $ 31,396 - Fidelity Government Money Market Portfolio------- - 24,526 Commonwealth Synthetic GIC Backed Security GIC, 6.04% Open Maturity Rate Resets Calendar Quarter---- 34,880 - Fidelity Short Term Interest Fund---------------- - 23,053 Fidelity Equity Income Fund---------------------- 51,044 37,218 Fidelity Magellan Fund--------------------------- 68,482 63,762 Phelps Dodge Corporation Common Stock------------ 45,609 42,165 Loans to Participants 8% - 12.5%, Maturing Through June 2011----------------------------- 15,139 12,790 Other-------------------------------------------- 26,970 23,217 --------- --------- $ 273,520 226,731 ========= ========= NOTE 4 - UNITIZED FUNDS - ----------------------- In 1996, several investment funds were unitized to allow the Trustee to participate in late day trading. Unitization requires the establishment and maintenance of a cash reserve to settle the sale of the units with cash from the reserve rather than having to wait at least one business day for the settlement of the underlying mutual fund as would normally be the case without unitization. The value of the fund determined using the number of units and net asset value per unit may not agree to the statement of net assets available for benefits with fund information, due to pending trades and in-kind distributions. -14- The following represents the number of units and the net asset value per unit for all unitized funds at December 31, 1996: Net Asset Value Fund Number of Units Per Unit ---- --------------- -------- Commonwealth Synthetic GIC Backed Security GIC, 6.04% Open Maturity Rate Resets Calendar Quarter 4,234,630 10.524 PD Stagecoach Fund (Arizona) 150,262 10.782 PD Barclays Equity Index Fund (Arizona) 318,465 11.435 PD Euro Pacific Fund (Arizona) 267,562 11.012 Small Cap Fund: IAI Midcap Growth, Lazard Small Cap 390,816 11.155 Phelps Dodge Corporation Common Stock 669,828 68.971 NOTE 5 - RELATED PARTY TRANSACTIONS - ----------------------------------- The Trustee invests in the Corporation's common stock in accordance with the provisions of the Plan. The following is a summary of transactions in the Corporation's common stock: Year Ended December 31, 1996 1995 ---- ---- (in thousands) Cost of shares purchased----------------------- 12,000 9,973 Number of shares purchased--------------------- 182 170 Proceeds from shares sold---------------------- 11,553 5,289 Number of shares sold-------------------------- 174 86 Value of shares distributed-------------------- 626 905 Number of shares distributed------------------- 10 15 -15- NOTE 6 - TAX STATUS - ------------------- The Plan received a determination letter from the Internal Revenue Service dated September 13, 1996, which stated that the Plan met the requirements of Section 401(a) of the Internal Revenue Code and that the earnings of the Trust are exempt from taxation under Section 501(a) of the Code. The Corporation believes that Plan amendments since that date will not change that status and the Plan, as amended and operated, continues to satisfy such requirements. NOTE 7 - PARTICIPATION IN THE PLAN - ---------------------------------- The following is a summary of the number of Participants invested in the investment options offered by the Plan as of: December 31, 1996 1995 ---- ---- Money Market Fund----------------------------------- 2,666 2,609 Interest Income Fund-------------------------------- 3,147 3,186 Balanced Fund--------------------------------------- 225 - Equity Income Fund---------------------------------- 3,357 3,023 S&P 500 Index Fund---------------------------------- 463 - Growth Stock Fund----------------------------------- 3,956 3,717 International Equity Fund--------------------------- 359 - Small CAP Equity Fund------------------------------- 501 - Phelps Dodge Common Stock Fund---------------------- 3,264 3,150 Occidental Petroleum Common Stock Fund-------------- 38 40 Loan Fund------------------------------------------- 2,460 2,195 -16- NOTE 8 - REALIZED GAINS (LOSSES) ON INVESTMENTS - ----------------------------------------------- Realized Carrying Gains Proceeds Value (Losses) -------- ----- -------- Year Ended December 31, 1996 (in thousands) Investments: Phelps Dodge Common Stock----------- $ 12,179 $ 11,409 $ 770 Mutual Funds and Other Common Stocks--------------------- 30,096 31,104 (1,008) ------- -------- -------- $ 42,275 $ 42,513 $ (238) ======= ======== ======== Year Ended December 31, 1995 (in thousands) Investments: Phelps Dodge Common Stock----------- $ 6,193 $ 6,260 $ (67) Mutual Funds and Other Common Stocks--------------------- 8,100 6,871 1,229 ------- -------- -------- $ 14,293 $ 13,131 $ 1,162 ======= ======== ======== NOTE 9 - INVESTMENT IN GUARANTEED INVESTMENT CONTRACTS - ------------------------------------------------------ On August 12, 1994, Canadian and U.S. Government regulators took control of Confederation Life Insurance Company (Confederation). The Plan's Interest Income Fund assets include a Guaranteed Investment Contract (GIC) with Confederation. The GIC was purchased on March 20, 1991, with an 8.59% contract rate of interest, with interest paid annually on April 1 and principal payable at maturity, April 1, 1996. The carrying value of the GIC at the time of seizure was $5,354,886, representing principal of $4,969,045 and accrued interest of $385,841. The Plan has frozen the Confederation GIC and has not allowed any distributions, withdrawals, loans or elective investment transfers of this portion of the Interest Income Fund from August 12, 1994 through May 1997. The accrual of interest on the Confederation GIC was discontinued on the seizure date and the nonaccrual has resulted in approximately $750,000 of interest income through the April 1, 1996 maturity date not being realized by participants or recognized in Statement of Changes in Net Assets Available for Benefits, With Fund Information, for the years ended December 31, 1996 and 1995. The Confederation GIC is included in the December 31, 1996 and 1995 Statements of Net Assets Available for Benefits, With Fund Information at the carrying value as of the date of seizure. In May 1996, Canadian and U.S. regulators agreed in principal to a split of assets to settle each country's claims separately. Final settlement terms were carried out during April and May 1997, -17- with 100% of principal plus approximately $400,000 in earnings deposited to participants' accounts. -18- Phelps Dodge Employee Savings Plan Schedule of Assets Held for Investment Purposes December 31, 1996 (in thousands)
Number of Description of Investment including maturity date, Current Shares rate of interest, collateral, par or maturity value Cost Value - --------------- -------------------------------------------------------------- ---------------------- ------------------ 31,396 MONEY MARKET FUND $31,396 $31,396 Barclays Money Market Fund I INTEREST INCOME FUND 5,349 Confederation Life Insurance Company 5,349 5,349 Guaranteed Investment Contract, 8.59% matures April 1, 1996 3,090 Lincoln National Insurance Company 3,090 3,090 Guaranteed Investment Contract, 8.02% matures December 31, 1998 2,768 Principal Mutual Insurance Company 2,768 2,768 Guaranteed Investment Contract, 5.06% matures December 31, 1998 3,490 Sun Life of Canada Insurance Company 3,491 3,491 Guaranteed Investment Contract, 5.74% matures June 20, 2000 34,170 Commonwealth Synthetic GIC 34,880 34,880 Backed Security GIC, 6.04% Open maturity Rate resets calendar quarter BALANCED FUND 129 PD Stagecoach Fund (Arizona) 1,550 1,540 EQUITY INCOME FUND 1,191 Fidelity Equity Income Fund 47,982 51,044 S&P 500 INDEX FUND 177 PD Barclays Equity Index Fund 3,156 3,463 GROWTH STOCK FUND 848 Fidelity Magellan Fund 71,935 68,482 INTERNATIONAL EQUITY FUND 108 PD Euro Pacific Fund 2,696 2,812 SMALL CAP EQUITY FUND 113 IAI Midcap Growth 2,064 1,987 115 Lazard Small CAP 2,047 2,128 PHELPS DODGE COMMON STOCK FUND* 674 Phelps Dodge Corporation Common Stock 33,975 45,609 2 In-Kind Held for Distribution 102 114 10 OCCIDENTAL PETROLEUM COMMON STOCK FUND 201 228 Occidental Petroleum Company Common Stock LOAN FUND Loans to Participants 15,139 15,139 8% - 12.5%, maturing through June 2011 ------------------ --------------------- TOTAL INVESTMENTS $261,821 $273,520 ================== ===================== *Represents a party-in-interest.
-19- PHELPS DODGE EMPLOYEE SAVINGS PLAN ITEM 27d FORM 5500 SCHEDULE OF REPORTABLE TRANSACTIONS* YEAR ENDED DECEMBER 31, 1996
Identity of Expense Current Value of Party Number of Purchase Selling Lease Incurred with Cost Asset on Net Gain Involved Description of Asset Transactions Price Price Rental Transaction of Asset Transaction Date or (Loss) - ---------------------------------- ------------ ----------- ---------- ------ ------------- -------- ---------------- --------- M & I Money Market Fund Purchases 160 37,525,161 37,525,161 0 Sales 197 32,765,048 32,765,048 0 M & I Interest Income Fund Purchases 158 14,111,802 14,111,802 0 Sales 191 35,712,113 35,712,113 0 M & I Equity Income Fund Purchases 209 16,985,008 16,985,008 0 Sales 207 8,835,174 8,630,137 205,037 M & I Growth Stock Fund Purchases 195 26,766,811 26,766,811 0 Sales 209 18,993,077 20,022,126 (1,429,049) M & I Phelps Dodge Common Stock Fund Purchases 189 12,000,411 12,000,411 0 Sales 193 11,553,165 8,395,712 3,157,453 M & I Loan Fund Purchases 790 6,683,267 6,683,267 0 Sales 133 5,092,261 5,092,261 0
*Transactions or series of transactions in excess of 5 percent of the current value of the Plans assets as of December 31, 1995 as defined in Section 2520.103.6 of the Department of Labor Rules and Regulations for Reporting and Disclosure Under ERISA. -20- EX-23.1 2 ACCOUNTANTS CONSENT Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-26442) of Phelps Dodge Corporation of our report dated June 20, 1997 appearing on page 5 of this Form 11-K. PRICE WATERHOUSE LLP Phoenix, Arizona June 30, 1997 -----END PRIVACY-ENHANCED MESSAGE-----