10-Q

________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2000

Commission file number 1-82

PHELPS DODGE CORPORATION

(a New York corporation)

13-1808503

(I.R.S. Employer Identification No.)

2600 N. Central Avenue, Phoenix, AZ 85004-3089

Registrant’s telephone number: (602) 234-8100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes x   No  .

Number of Common Shares outstanding at August 8, 2000: 78,719,898 shares.

i

PHELPS DODGE CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2000

Table of Contents

			Page
Part I. Financial Information
	Item 1. Financial Statements
		Statement of Consolidated Operations		1
		Consolidated Balance Sheet		2
		Consolidated Statement of Cash Flows		3
		Consolidated Statement of Common Shareholders’ Equity		4
		Financial Data by Business Segment		5
		Notes to Consolidated Financial Information		6
		Review by Independent Accountants		9
		Report of Independent Accountants on Review of Interim Financial Information		10
	Item 2. Management’s Discussion and Analysis
		Results of Operations		11
		Results of Phelps Dodge Mining Company		12
		Results of Phelps Dodge Industries		13
		Other Matters Relating to the Statement of Consolidated Operations		14
		Changes in Financial Condition		14
Part II. Other Information
	Item 1. Legal Proceedings			15
	Item 4. Submission of Matters to a Vote of Security Holders			15
	Item 6. Exhibits and Reports on Form 8-K			15
	Signatures			16
	Index to Exhibits			16

-1-

PHELPS DODGE CORPORATION AND SUBSIDIARIES

Part I. Financial Information

Item 1. Financial Statements		Second Quarter						First six months
		2000			1999			2000			1999
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited; in millions except per share data)
Sales and other operating revenues		$	1,112.9			691.1			2,232.6			1,354.2
Operating costs and expenses
	Cost of products sold (see Note 3)		895.2			554.2			1,768.6			1,083.2
	Depreciation, depletion and amortization		119.1			71.1			238.5			144.3
	Selling and general administrative expense (see Note 3)		34.8			25.3			67.0			49.8
	Exploration and research expense		14.4			12.3			27.2			21.1
	Non-recurring charges and other (see Note 6)		44.2			83.0			46.3			83.0
			1,107.7			745.9			2,147.6			1,381.4
Operating income (loss)			5.2			(54.8	)		85.0			(27.2	)
	Interest expense		(54.0	)		(24.0	)		(109.4	)		(48.1	)
	Capitalized interest		0.9			-			1.3			0.1
	Miscellaneous income and expense, net		5.0			1.0			11.4			(6.4	)
Loss before taxes, minority interests, equity in net earnings (loss) of affiliated companies and cumulative effect of accounting change			(42.9	)		(77.8	)		(11.7	)		(81.6	)
	Provision for taxes on income		5.9			20.1			(5.3	)		18.7
	Minority interests in consolidated subsidiaries		(1.5	)		0.9			(2.9	)		0.5
	Equity in net earnings (loss) of affiliated companies		0.7			(0.7	)		1.5			5.4
Loss before cumulative effect of accounting change			(37.8	)		(57.5	)		(18.4	)		(57.0	)
	Cumulative effect of accounting change (see Note 7)		-			-			-			(3.5	)
Net loss		$	(37.8	)		(57.5	)		(18.4	)		(60.5	)
Average number of shares outstanding - basic			78.4			57.8			78.4			57.8
Basic loss per share before cumulative effect of accounting change		$	(0.48	)		(0.99	)		(0.23	)		(0.98	)
	Cumulative effect of accounting change (see Note 7)		-			-			-			(0.06	)
Basic loss per share		$	(0.48	)		(0.99	)		(0.23	)		(1.04	)
Average number of shares outstanding - diluted			78.4			57.8			78.4			57.8
Diluted loss per share before cumulative effect of accounting change		$	(0.48	)		(0.99	)		(0.23	)		(0.98	)
	Cumulative effect of accounting change (see Note 7)		-			-			-			(0.06	)
Diluted loss per share		$	(0.48	)		(0.99	)		(0.23	)		(1.04	)

See Notes to Consolidated Financial Information.

-2-

CONSOLIDATED BALANCE SHEET

(Unaudited; in millions)

				June 30,			December 31,
				2000			1999
Assets
	Cash and cash equivalents		$		246.3			234.2
	Accounts receivable, net				572.3			541.5
	Inventories				440.8			498.3
	Supplies				149.8			149.0
	Other current assets and prepaid expenses (see Note 9)				39.8			172.4
	Deferred income taxes				101.3			98.0
		Current assets			1,550.3			1,693.4
	Investments and long-term accounts receivable				122.7			136.1
	Property, plant and equipment, net				5,935.1			6,037.7
	Non-current deferred income taxes				16.9			16.9
	Other assets and deferred charges				347.6			344.9
			$		7,972.6			8,229.0
Liabilities
	Short-term debt		$		418.0			451.2
	Current portion of long-term debt				121.9			131.3
	Accounts payable and accrued expenses				744.9			786.5
	Accrued income taxes				21.5			49.3
	Dividends payable				39.4			-
		Current liabilities			1,345.7			1,418.3
	Long-term debt				2,157.7			2,172.5
	Deferred income taxes				399.1			385.7
	Other liabilities and deferred credits				849.8			879.4
					4,752.3			4,855.9
Minority interests in consolidated subsidiaries					87.8			96.3
Common shareholders’ equity
	Common shares, 78.7 outstanding (12/31/99 - 78.7)				492.0			491.6
	Capital in excess of par value				1,019.0			1,016.4
	Retained earnings				1,823.3			1,959.8
	Accumulated other comprehensive loss				(190.2	)		(180.3	)
	Other				(11.6	)		(10.7	)
					3,132.5			3,276.8
			$		7,972.6			8,229.0

See Notes to Consolidated Financial Information.

-3-

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited; in millions)

					Six months ended
					June 30,
					2000			1999
Operating activities
	Net loss				$	(18.4	)		(60.5	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Depreciation, depletion and amortization				238.5			144.3
		Deferred income taxes				6.8			(8.8	)
		Equity loss net of dividends received				(0.4	)		(5.4	)
		Changes in current assets and liabilities:
			(Increase) decrease in accounts receivable			(18.4	)		(88.0	)
			(Increase) decrease in inventories			42.2			(5.2	)
			(Increase) decrease in supplies			(1.4	)		3.7
			(Increase) decrease in prepaid expenses			(7.8	)		1.1
			(Increase) decrease in deferred income taxes			(0.1	)		(0.9	)
			Increase (decrease) in interest payable			(12.4	)		(1.7	)
			Increase (decrease) in other accounts payable			(5.4	)		(17.4	)
			Increase (decrease) in accrued income taxes			(21.2	)		(4.1	)
			Increase (decrease) in other accrued expenses			(58.2	)		(2.3	)
		Non-recurring charges and provisions (see Note 6)				53.5			84.7
		Other adjustments, net				(32.8	)		6.5
				Net cash provided by operating activities		164.5			46.0
Investing activities
	Capital outlays					(151.9	)		(64.5	)
	Capitalized interest					(1.1	)		(0.1	)
	Investment in subsidiaries					(12.7	)		(75.3	)
	Proceeds from asset dispositions and other (see Note 9)					149.7			6.4
				Net cash used in investing activities		(16.0	)		(133.5	)
Financing activities
	Increase in debt					22.0			110.0
	Payment of debt					(80.4	)		(41.4	)
	Common dividends					(78.7	)		(58.0	)
	Other, net					0.7			(0.9	)
				Net cash provided by (used in) financing activities		(136.4	)		9.7
Increase (decrease) in cash and cash equivalents						12.1			(77.8	)
Cash and cash equivalents at beginning of year						234.2			221.7
Cash and cash equivalents at end of period					$	246.3			143.9

See Notes to Consolidated Financial Information.

-4-

CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS’ EQUITY

(Unaudited; in millions)

				Common Shares										Accumulated
								Capital in						Other						Common
				Number		At Par		Excess of			Retained			Comprehensive						Shareholders’
				of Shares		Value		Par Value			Earnings			Income (loss)			Other			Equity
Balance at December  31, 1999					78.7	$	491.6	$	1,016.4		$	1,959.8		$	(180.3	)	$	(10.7	)	$	3,276.8
	Stock options exercised				-		0.1		1.0			-									1.1
	Restricted shares issued, net				-		0.3		2.2			-						(0.9	)		1.6
	Other investment adjustments								(0.6	)		-									(0.6	)
	Dividends on common shares											(118.1	)								(118.1	)
	Comprehensive income:
		Net loss										(18.4	)								(18.4	)
		Other comprehensive income, net of tax:
			Translation adjustment												(10.4	)					(10.4	)
			Unrealized gains on securities												0.5						0.5
			Other comprehensive loss												(9.9	)					(9.9	)
		Comprehensive loss																			(28.3	)
Balance at June 30, 2000					78.7	$	492.0	$	1,019.0		$	1,823.3		$	(190.2	)	$	(11.6	)	$	3,132.5

See Notes to Consolidated Financial Information.

-5-

FINANCIAL DATA BY BUSINESS SEGMENT

(Unaudited; in millions)

																	Corporate
						PD Industries											Unallocated
			Phelps														&
			Dodge			Specialty		Wire &						Segment			Reconciling
			Mining			Chemicals		Cable			Total			Subtotal			Eliminations*			Totals
Second Quarter 2000
	Sales & other operating revenues:
		Unaffiliated customers	$	753.9			150.1		208.9			359.0			1,112.9			-			1,112.9
		Intersegment		58.2			-		1.0			1.0			59.2			(59.2	)		-
	Non-recurring charges			5.2			-		39.0			39.0			44.2			-			44.2
	Operating income (loss)			38.1			26.4		(37.9	)		(11.5	)		26.6			(21.4	)		5.2
	Assets at June 30			6,256.2			779.5		711.9			1,491.4			7,747.6			225.0			7,972.6
Second Quarter 1999
	Sales & other operating revenues:
		Unaffiliated customers	$	351.3			134.9		204.9			339.8			691.1			-			691.1
		Intersegment		56.7			-		0.1			0.1			56.8			(56.8	)		-
	Non-recurring charges			34.5			19.9		28.4			48.3			82.8			0.2			83.0
	Operating income (loss)			(33.1	)		10.3		(20.2	)		(9.9	)		(43.0	)		(11.8	)		(54.8	)
	Assets at June 30			3,158.7			756.5		815.9			1,572.4			4,731.1			170.4			4,901.5
First Six Months 2000
	Sales & other operating revenues:
		Unaffiliated customers	$	1,507.3			305.0		420.3			725.3			2,232.6			-			2,232.6
		Intersegment		118.9			-		1.0			1.0			119.9			(119.9	)		-
	Non-recurring charges			5.2			-		41.1			41.1			46.3			-			46.3
	Operating income (loss)			106.4			51.1		(35.7	)		15.4			121.8			(36.8	)		85.0
	Assets at June 30			6,256.2			779.5		711.9			1,491.4			7,747.6			225.0			7,972.6
First Six Months 1999
	Sales & other operating revenues:
		Unaffiliated customers	$	695.4			265.9		392.9			658.8			1,354.2			-			1,354.2
		Intersegment		108.5			-		0.1			0.1			108.6			(108.6	)		-
	Non-recurring charges			34.5			19.9		28.4			48.3			82.8			0.2			83.0
	Operating income (loss)			(28.0	)		40.8		(15.9	)		24.9			(3.1	)		(24.1	)		(27.2	)
	Assets at June 30			3,158.7			756.5		815.9			1,572.4			4,731.1			170.4			4,901.5

*  Represents corporate, unallocated and reconciling elimination activities and assets.

-6-

NOTES TO CONSOLIDATED FINANCIAL

INFORMATION

(Unaudited)

1.	The unaudited consolidated financial information presented herein has been prepared in accordance with the instructions to Form 10-Q and does not include all of the information and note disclosures required by generally accepted accounting principles. Therefore, this information should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 1999. This information reflects all adjustments that are, in the opinion of management, necessary to a fair presentation of the results for the interim periods reported.
2.	The results of operations for the three-month and six-month periods ended June  30, 2000, are not necessarily indicative of the results to be expected for the full year.
3.	The results of operations for the three-month and six-month periods ended June  30, 1999, reflect the reclassification of $5.1 million and $10.0 million, respectively, in operation support costs from selling and general administrative expenses to cost of products sold to conform to the current year presentation.
4.	Depending on market circumstances, we may periodically purchase or liquidate various copper price protection contracts for a portion of our expected future mine production to mitigate the risk of adverse price fluctuations. As of June 30, 2000, the company had a total of approximately 110  million pounds of year 2000 copper cathode production under various price protection agreements with various financial institutions. These annual contracts effectively ensure minimum (approximately 72  cents) and maximum (approximately 95 cents) prices per pound. The minimum and maximum prices are based on the average London Metal Exchange price for the protection period.
5.	Cyprus Amax Acquisition

Liabilities recorded in the acquisition of Cyprus Amax included costs of $22  million associated with merging Cyprus Amax’s operations into the company’s operations (e.g., lease and other cancellation costs and employee termination costs, primarily for duplicate administrative and management functions). Through June 30, 2000, we have paid $11 million for such costs, including approximately $10 million for employee termination and severance costs. Costs for these liabilities are expected to be substantially paid out by the end of 2000.

6.          Restructuring Charges and Non-Recurring Items

On June 27, 2000, we announced a plan to reduce operating costs and restructure operations at our mining and wire and cable segments by (i) curtailing operations at the Miami copper mine in Arizona and the Henderson molybdenum mine in Colorado; (ii) ceasing production at two wire and cable operations in Venezuela; (iii) announcing the planned closure of a telephone cable operation in El Salvador; and (iv) recognizing impairment charges for our wire and cable operations in Austria and the Philippines. These actions resulted in non-recurring, pre-tax charges of $41.3  million ($36.9 million, $0.47 per share, after taxes and minority interests), $6.4 million ($6.4 million, $0.08 per share after taxes and minority interests) in charges to cost of products sold, representing the working capital writedown component of the above actions, and a $7.2 million charge ($7.2  million, $0.09 per share after taxes and minority interests) to miscellaneous income and expense representing the impairment of our equity investment in a wire and cable operation in the Philippines.

In addition to the above items, we recognized certain ongoing costs of $2.9  million ($1.9 million, $0.02 per share after taxes and minority interests) relating to the June 30, 1999, restructuring plan and received a tax refund of $6.5 million and related interest income of $5.8 million ($3.6  million, $0.04 per share after taxes and minority interests) resulting from the settlement of the company’s 1990 and 1991 income tax audits. In total, pre-tax second quarter 2000 restructuring charges and non-recurring items were $52.0  million

-7-

($42.3 million, $0.54 per share after taxes and minority interests).

Of PD Mining’s $5.2 million second quarter 2000 restructuring charge for employee severance related to curtailments at the Miami and Henderson mines, $2.6 million in payments had been made as of June 30, 2000.

During the second quarter of 2000 our wire and cable segment recorded pre-tax restructuring charges and non-recurring items of $52.6 million, of which the current liability portion relating primarily to employee severance and plant removal and dismantling costs was $5.0  million. As of June 30, 2000, $2.2  million in payments had been made.

On June 30, 1999, we announced a plan to reduce costs and improve operating performance at all three of our business segments by (i) curtailing higher-cost copper production by temporarily closing our Hidalgo smelter in New Mexico and the smaller of two concentrators at our Morenci mining operations in Arizona, as well as curtailing production by 50  percent at our copper refinery in El Paso, Texas; (ii) selling a non-core South African fluorspar mining unit; (iii) restructuring certain wire and cable assets to respond to changing market conditions; and (iv) suspending operations at our carbon black plant in the Philippines. These actions resulted in a total non-recurring, pre-tax charge of $96.7 million ($65.7 million, $1.07  per share, after taxes and minority interests) in 1999 and $2.9 million ($1.9 million, $0.02 per share, after taxes) in the 2000 second quarter.

Our mining segment had no charges in the 2000 second quarter from the June 30, 1999, restructuring plan. The current liability components of the restructuring plan for the mining segment related to employee severance, mothballing and take or pay contracts during the first six months of 2000 were as follows:

(in millions)
					Mothballing/
					Take or
		Employee			Pay
		Severance			Contracts			Total
Dec. 31, 1999 balance			1.4			3.5			4.9
Payments made			(0.8	)		(0.6	)		(1.4	)
	June 30, 2000 balance		0.6			2.9			3.5

Our specialty chemicals segment had no charges in the 2000 second quarter from the June 30, 1999, restructuring plan. The current liability components of the restructuring plan for our specialty chemicals segment related to employee severance and disposal and dismantling costs during the first six months of 2000 were as follows:

(in millions)
				Disposal
	Employee			and
	Severance			Dismantling			Total
Dec. 31, 1999 balance		1.0			1.9			2.9
Reclassification of the restructure		(0.6	)		-			(0.6	)
Payments made		(0.3	)		(0.3	)		(0.6	)
June 30, 2000 balance		0.1			1.6			1.7

Our wire and cable segment had non-recurring, pre-tax charges of $2.9 million in the 2000 second quarter from the June 30, 1999 restructuring plan. The components of the restructuring plan related to employee severance and disposal and dismantling

-8-

costs during the first six months of 2000 were as follows:

(in millions)
					Equipment
		Employee			Disposal,
		Severance			Dismantling
		&			&
		Relocation			Relocation			Total
Dec. 31, 1999 balance			3.2			1.0			4.2
Relocation expenses			1.6			3.2			4.8
Additional severance			0.3			-			0.3
Payments made			(2.7	)		(3.2	)		(5.9	)
	June 30, 2000 balance		2.4			1.0			3.4

*  Relocation costs are charged to expense as incurred.

7.          Accounting Standards

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.  133, “Accounting for Derivative Instruments and Hedging Activities.” This statement requires recognition of all derivatives as either assets or liabilities on the balance sheet and measurement of those instruments at fair value. Changes in the fair value of derivatives are re corded each period in current earnings or other comprehensive income (loss). Proper accounting for changes in fair value of derivatives held is dependent on whether the derivative transaction qualifies as an accounting hedge and on the classification of the hedge transaction. The statement was originally required to be adopted on January 1, 2000. Citing concerns about companies’ ability to modify their information systems and educate their managers in time to apply SFAS No. 133, the FASB has delayed its effective date for one year. We will adopt SFAS No. 133 effective January 1, 2001, and are in the process of evaluating the effect this statement will have on our financial reporting and disclosures as well as on our ongoing derivative and hedging activities.

In the 1999 first quarter, we adopted SoP 98-5, “Reporting on the Costs of Start-Up Activities.” The adoption resulted in a $3.5 million after-tax charge, or $0.06 per common share, representing the write-off of previously unamortized start-up costs at our Candelaria mining operation in Chile and our magnet wire operation in Mexico.

In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, “Revenue Recognition in Financial Statements” that provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB No.  101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies. Citing the numerous requests from groups requesting additional time to determine the effect on revenue recognition practices, the SEC issued SAB No. 101B in June 2000 which delayed the implementation date of SAB  101 to no later than the fourth fiscal quarter of 2000. We are currently awaiting additional guidance from the SEC on the application of SAB 101 in order to evaluate the effect this bulletin may have, if any, on our consolidated financial statements.

The Emerging Issues Task Force (EITF) issued Topic No. D-88, “Planned Major Maintenance Activities” in March 2000. Topic D-88 requires companies to disclose in their Form 10-Qs for 2000, their accounting policy for repair and maintenance costs incurred in connection with planned major maintenance activities. Our policy for repair and maintenance costs incurred in connection with planned major maintenance activities is to charge to operations such costs equally over the twelve months of the year in which the major maintenance activities are incurred.

8.          Environmental Matters

As of December 31, 1999, we had a reserve balance of $336.1 million for estimated future costs associated with environmental matters. During the first six months of 2000, net spending against that reserve totaled $15.1 million. As of June 30, 2000, the reserve balance was $321.0 million.

The company has received notice of an agreement to perform a Remedial Investigation/ Feasibility Study (RI/ FS) at a site for which it may have an indemnity obligation. The cost of the RI/ FS is not consid-

-9-

ered to be material. It is not possible to reasonably estimate the potential liability concerning the site; however, the potential liability could be material.

The company has contingencies regarding environmental, closure and other matters. For a further discussion of these contingencies please see Note 19 to the Consolidated Financial Statements of the company’s 1999 Form 10-K.

9.          Asset Sales

On March 30, 2000, we sold Cyprus Australia Coal Company, a wholly owned subsidiary, to Glencore Coal Australia Pty. Ltd., a subsidiary of Switzerland-based Glencore International AG, for US$150 million in cash. We acquired Cyprus Australia Coal Company as part of our acquisition of Cyprus Amax Minerals Company on October 16, 1999. Cyprus Australia Coal Company owned 48  percent of Oakbridge Pty. Ltd. and 50  percent of the Springvale Mine in Australia.

10.        Debt

An agreement on a new, unsecured revolving credit facility was entered into by the company and several lenders on May 10, 2000.

The facility is to be used for general corporate purposes, primarily as a commercial paper backstop. This facility, which replaces the June 1997 agreement, permits borrowings of up to $1 billion until its maturity on May 10, 2005. It allows for one-year extensions beyond the maturity date under certain circumstances. Interest is payable at a fluctuating rate based on the agent bank’s base rate or a fixed rate based on the London Interbank Offered Rate (LIBOR), or at fixed rates offered independently by the several lenders, for maturities of from one month to twelve months. This agreement provides for an annual facility fee of 15 basis points (0.15 percent) on total commitments. The agreement requires the company to maintain minimum consolidated tangible net worth of $1.5 billion and limits indebtedness to 60 percent of total consolidated capitalization.

REVIEW BY INDEPENDENT ACCOUNTANTS

         The financial information as of June 30, 2000, and for the three-month and six-month periods ended June 30, 2000 and 1999, included in Part I pursuant to Rule 10-01 of Regulation S-X has been reviewed by PricewaterhouseCoopers LLP (PricewaterhouseCoopers), the company’s independent accountants, in accordance with standards established by the American Institute of Certified Public Accountants. PricewaterhouseCoopers’ report is included in this quarterly report.

         PricewaterhouseCoopers does not carry out any significant or additional audit tests beyond those that would have been necessary if its report had not been included in this quarterly report. Accordingly, such report is not a “report” or “part of a registration statement” within the meaning of Sections 7 and 11 of the Securities Act of 1933 and the liability provisions of Section 11 of such Act do not apply.

-10-

[PRICEWATERHOUSECOOPERS Logo]

Report of Independent Accountants

To the Board of Directors and Shareholders

of the Phelps Dodge Corporation

We have reviewed the accompanying consolidated balance sheet of Phelps Dodge Corporation and its subsidiaries as of June 30, 2000, and the related consolidated statements of operations, for each of the three-month and six-month periods ended June 30, 2000 and 1999, and the consolidated statement of cash flows for the six-month periods ended June 30, 2000 and 1999 and consolidated statement of common shareholders’ equity for the six month period ended June 30, 2000. This financial information is the responsibility of the Corporation’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial information for it to be in conformity with generally accepted accounting principles.

We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1999, and the related consolidated statements of operations, of cash flows and of common shareholders’ equity for the year then ended (not presented herein), and in our report dated January 26, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 1999, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Phoenix, Arizona

July 19, 2000

-11-

Item 2. Management’s Discussion and Analysis

         The U.S. securities laws provide a “safe harbor” for certain forward-looking statements. This quarterly report contains “forward-looking statements” that express expectations of future events or results. All statements based on future expectations rather than historical facts are forward-looking statements that involve a number of risks and uncertainties, and Phelps Dodge Corporation (the company, which may be referred to as Phelps Dodge, we, us or ours) cannot give assurance that such statements will prove to be correct. Please refer to the Management’s Discussion and Analysis sections of the company’s report on Form 10-K for the year ended December 31, 1999.

RESULTS OF OPERATIONS

         Earnings

         The company had consolidated earnings in the 2000 second quarter of $4.5 million, or 6 cents per common share, before after-tax, restructuring charges and non-recurring items of $42.3 million, or 54 cents per share, from the company’s restructuring plan announced on June 27, 2000, and other non-recurring items arising during the quarter (see Note 6 to the Consolidated Financial Information for a description of the restructuring plan and the non-recurring items). By comparison, earnings for the second quarter of 1999 were $1.2 million, or 2 cents per share, before after-tax restructuring charges of $58.7 million, or $1.01 per share. After restructuring charges and non-recurring items, the 2000 second quarter net loss was $37.8 million, or 48 cents per share, compared with a 1999 second quarter net loss of $57.5 million, or 99 cents per share.

         Earnings before restructuring charges and non-recurring items were higher in the 2000 second quarter than in the corresponding 1999 period principally as a result of higher average copper prices and increased production from the properties acquired in the October 16, 1999, Cyprus Amax Minerals Company (Cyprus Amax) acquisition. These increases were partially offset by higher copper production costs primarily due to higher electric power and diesel fuel costs and a production shortfall at El Abra.

         The New York Commodity Exchange (COMEX) spot price per pound of copper cathode, upon which we base our selling price, averaged 80 cents in the 2000 second quarter, compared with 67 cents, or 19 percent higher, than the corresponding 1999 period. From July 1 to August 8, 2000, the COMEX price averaged 85 cents per pound, closing at 86 cents per pound on August 8, 2000.

         Any material change in the price we receive for copper, or in our unit production costs, has a significant effect on our results. Our share of current annual production is approximately 2.4 billion pounds of copper. Accordingly, each 1-cent per pound change in our average annual realized copper price, or in our average annual unit production costs, causes a variation in annual operating income before taxes of approximately $24 million.

         Depending on market circumstances, we may periodically purchase or liquidate various copper price protection contracts for a portion of our expected future mine production to mitigate the risk of adverse price fluctuations. See Note 4 to the Consolidated Financial Information for a discussion of such contracts as of June 30, 2000.

         Sales

         Sales were $1,112.9 million in the 2000 second quarter, compared with $691.1 million in the corresponding 1999 period. This increase principally resulted from the higher average copper and carbon black prices, combined with higher sales volumes of copper and molybdenum.

         Business Segments

         Results for 2000 and 1999 can be meaningfully compared by separate reference to our reporting divisions, Phelps Dodge Mining Company and Phelps Dodge Industries. Phelps Dodge Mining Company is a business segment that includes our worldwide copper operations from mining through rod production, marketing and sales; molybdenum operations from mining through manufacturing, marketing and sales; other mining operations and investments; and worldwide mineral exploration and development programs. Phelps Dodge Industries includes our specialty chemicals segment and our wire and cable segment.

-12-

RESULTS OF PHELPS DODGE MINING COMPANY

         Phelps Dodge Mining Company (PD Mining) is an international business comprising a group of companies involved in vertically integrated copper operations including mining, concentrating, electrowinning, smelting, refining, rod production, marketing and sales, and related activities. Copper is sold primarily to others as rod, cathode or concentrates, and as rod to our wire and cable segment. PD Mining, at times, smelts and refines copper and produces copper rod for others on a toll basis. PD Mining also is an integrated producer of molybdenum, with mining, roasting and processing facilities producing molybdenum concentrate as well as metallurgical and chemical products. PD Mining also produces gold, silver, molybdenum and copper chemicals as by-products, and sulfuric acid from our air quality control facilities. This business segment also includes our worldwide mineral exploration programs.

		Second Quarter
		2000		1999
Copper production (thousand short tons):
	Total production		367.4		240.2
	Less minority participants’ shares(A)		64.9		41.5
	Net Phelps Dodge share		302.5		198.7
Copper sales (thousand short tons):
	Net Phelps Dodge share from own mines		307.8		189.4
	Purchased copper		106.8		73.3
	Total copper sales		414.6		262.7
New York Commodity Exchange
	Average spot price per pound - copper cathodes	$	0.80		0.67
Molybdenum production (million pounds)			12.5		0.2
Molybdenum sales (million pounds)			15.5		0.2
Metals Week
	Average dealer oxide price per pound - molybdenum	$	2.62		2.64
		(in  millions)
Sales and other operating revenues - unaffiliated customers		$	753.9		351.3
Operating income (loss)(B)(C)		$	38.1		(33.1	)

		First Six Months
		2000		1999
Copper production (thousand short tons):
	Total production		739.2		492.8
	Less minority participants’ shares(A)		132.3		84.8
	Net Phelps Dodge share		606.9		408.0
Copper sales (thousand short tons):
	Net Phelps Dodge share from own mines		623.2		402.3
	Purchased copper		205.8		134.3
	Total copper sales		829.0		536.6
New York Commodity Exchange
	Average spot price per pound - copper cathodes	$	0.81		0.65
Molybdenum production (million pounds)			25.2		0.4
Molybdenum sales (million pounds)			31.9		0.4
Metals Week
	Average dealer oxide price per pound - molybdenum	$	2.57		2.67
		(in millions)
Sales and other operating revenues - unaffiliated customers		$	1,507.3		695.4
Operating income (loss)(B)(C)		$	106.4		(28.0	)

(A) Minority participant interests include (i) a 15 percent undivided interest in the Morenci, Arizona, copper mining complex held by Sumitomo Metal Mining Arizona, Inc., (ii) a one-third partnership interest in Chino Mines Company in New Mexico held by Heisei Minerals Corporation, (iii) a 20 percent interest in Candelaria in Chile held by SMMA Candelaria, Inc., a jointly owned indirect subsidiary of Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation, and (iv) a 49 percent interest in the El Abra copper mining operation in Chile held by Corporacion Nacional del Cobre de Chile (Codelco).

(B) Includes pre-tax charges of $5.2 million for costs associated with the June 30, 2000, restructuring plans (see Note 6 to the Consolidated Financial Information).

(C) Includes pre-tax charges of $34.5 million for costs associated with the June  30, 1999, restructuring plans (see Note 6 to the Consolidated Financial Information).

         PD Mining - Sales

         PD Mining sales and other operating revenues to unaffiliated customers increased by $402.6 million, or 115 percent, in the 2000 second quarter compared with the corresponding 1999 period. This variance reflected the effect of increased copper sales volumes (approximately $206 million) primarily resulting from the acquisition of Cyprus Amax, increased average selling price for copper (approximately $108 million), an increase in molybdenum sales revenue as a result of the properties acquired as part of Cyprus Amax

-13-

acquisition (approximately $61 million) and increased rod premiums (approximately $14 million).

         PD Mining - Operating Income

         PD Mining reported operating income of $43.3 million in the 2000 second quarter before non-recurring, pre-tax restructuring charges of $5.2 million (see Note 6 to the Consolidated Financial Information). This compares with operating income of $1.4 million in the corresponding 1999 period before non-recurring, pre-tax restructuring charges of $34.5 million (see Note 6 to the Consolidated Financial Information). This increase primarily reflected the higher average copper price for sales of PD-mined copper (approximately $49 million) and higher sales volumes of PD-mined copper (approximately $16 million). These increases were partially offset by higher copper production costs (approximately $25 million) and losses from molybdenum operations (approximately $5 million). Higher 2000 copper production costs when compared with the second quarter of 1999 primarily were due to higher diesel fuel and power costs, higher depreciation expenses and the impact of higher cost production from the properties acquired from Cyprus Amax.

         The higher costs for power and petroleum products increased our second quarter 2000 mining operating costs by approximately $11 million, relative to the first quarter of 2000.

         PD Mining - Other Matters

         On May 8, 2000, we announced the curtailment of molybdenum production at our Henderson mine in Colorado. This curtailment will reduce molybdenum production by approximately 5 million pounds annually and result in a workforce reduction of approximately 130 workers. The severance related costs associated with the curtailment resulted in a non-recurring, pre-tax restructuring charge of $4.3 million ($2.7 million or 3 cents per share after taxes).

         On June 27, 2000, we announced the curtailment of operations at our Miami mine in Arizona. The curtailment will result in a reduction in the workforce of approximately 65 positions. The severance related costs associated with the curtailment resulted in a non-recurring, pre-tax restructuring charge of $0.9 million ($0.6 million or 1 cent per share after taxes).

RESULTS OF PHELPS DODGE INDUSTRIES

         Phelps Dodge Industries (PD Industries), our manufacturing division, produces engineered products principally for the global energy, telecommunications, transportation and specialty chemicals sectors. Its operations are characterized by products with significant market share, internationally competitive cost and quality, and specialized engineering capabilities. The manufacturing division includes our specialty chemicals segment and our wire and cable segment. Our specialty chemicals segment includes Columbian Chemicals Company and its subsidiaries (Columbian Chemicals or Columbian). Our wire and cable segment consists of three worldwide product line businesses including magnet wire, energy and telecommunications cables, and specialty conductors.

		Second Quarter
		2000			1999
		(in millions)
Sales and other operating revenues - unaffiliated customers:
	Specialty chemicals	$	150.1			134.9
	Wire and cable		208.9			204.9
		$	359.0			339.8
Operating income (loss):
	Specialty chemicals(A)	$	26.4			10.3
	Wire and cable(B)(D)		(37.9	)		(20.2	)
		$	(11.5	)		(9.9	)

		First Six
		Months
		2000			1999
		(in millions)
Sales and other operating revenues - unaffiliated customers:
	Specialty chemicals	$	305.0			265.9
	Wire and cable		420.3			392.9
		$	725.3			658.8
Operating income (loss):
	Specialty chemicals(A)	$	51.1			40.8
	Wire and cable(B)(C)(D)		(35.7	)		(15.9	)
		$	15.4			24.9

(A) Includes a pre-tax charge of $19.9 million in the 1999 second quarter for costs associated with the suspension of operations at a carbon black facility in the Philippines (see Note 6 to the Consolidated Financial Information).

(B) Includes pre-tax charges of $45.4 million for costs associated with the June  27, 2000, and June 30, 1999, restructuring plans (see Note 6 to the Consolidated Financial Information).

(C)	Includes a pre-tax charge of $2.1 million in the 2000 first quarter for costs associated with the June 30, 1999, restructuring plan.
(D)	Includes a pre-tax charge of $28.4 million in the 1999 second quarter for costs associated with the restructuring of certain wire and cable operations (see Note 6 to the Consolidated Financial Information).

-14-

         PD Industries - Sales

         PD Industries reported sales to unaffiliated customers of $359.0 million in the 2000 second quarter, compared with $339.8 million in the corresponding 1999 period. The increase reflected higher sales both in the specialty chemicals and wire and cable segments. An 11 percent specialty chemicals sales increase principally reflected higher average selling prices following an increase in feedstock costs. A 2 percent increase in wire and cable sales was primarily a result of higher copper prices and higher sales volumes to the aerospace and geophysical markets.

         PD Industries - Operating Income

         PD Industries reported 2000 second quarter operating income of $33.9 million before non-recurring, pre-tax charges of $45.4 million for costs associated with the June 27, 2000 and June 30, 1999 restructuring plans. Operating income in the 1999 second quarter was $38.4 million before non-recurring pre-tax charges of $48.3 million for costs relating to the June 30, 1999 restructuring plan. The decrease from the 1999 second quarter was principally due to the effect of higher feedstock costs at our specialty chemicals segment as a result of increased petroleum prices.

OTHER MATTERS RELATING TO THE STATEMENT OF CONSOLIDATED OPERATIONS

         Depreciation, Depletion and Amortization

         Depreciation, depletion and amortization expense was $119.1 million in the 2000 second quarter, compared with $71.1 million in the corresponding 1999 period. The 2000 depreciation expense includes depreciation at the recently acquired Cyprus Amax properties.

         Selling and General Administrative Expense

         Selling and general administrative expense was $34.8 million in the 2000 second quarter, compared with $25.3 million in the corresponding 1999 period. The increase is primarily related to the addition of administrative functions to support the recently acquired Cyprus Amax properties and the inclusion of molybdenum selling expenses from the Cyprus Amax properties. (Also, see Note 3 to the Consolidated Financial Information for a brief discussion of a reclassification of certain 1999 expenses.)

         Exploration and Research and Development Expense

         Our 2000 second quarter exploration and research expense was $14.4 million, an increase of $2.1 million from that in the 1999 second quarter. The increase is a result of higher exploration spending in Brazil, primarily on the Sossego copper project.

         Interest Expense

         Net interest expense was $53.1 million in the 2000 second quarter compared with $24.0 million in the 1999 second quarter. The increase primarily reflected the assumption of Cyprus Amax’s debt.

         Miscellaneous Income and Expense, Net

         Miscellaneous income and expense, net, increased by $4.0 million in the 2000 second quarter compared with the corresponding 1999 period. This change principally reflected interest income of $5.9 million on income tax refunds, higher interest income ($1.3 million), and higher currency exchange gains ($2.0 million), offset by the impairment of our investment in PD Philippines ($7.2 million).

         Provision for Taxes on Income

         The effective tax benefit rate of 14 percent for the three-month period ended June 30, 2000, varies from the customary effective tax rate of 37 percent as a result of certain non-recurring charges in foreign jurisdictions that did not generate tax benefits, partially offset by the receipt of a $6.5 million tax refund resulting from 1990 and 1991 federal income tax audits.

         Equity Earnings

         Equity in net earnings of affiliated companies increased by $1.4 million primarily due to the 2000 second quarter gain on the sale of land by an equity-basis wire and cable operation.

CHANGES IN FINANCIAL CONDITION

         Debt

         At June 30, 2000, our total debt was $2,697.6 million, compared with $2,755.0 million at year-end 1999. The $57.4 million decrease principally reflected the use of proceeds from the sale of the company’s wholly owned subsidiary, Cyprus Australia Coal Company, for $150 million (please refer to Note 9 to the Consolidated Financial Information). Our ratio of debt to total capitalization was 45.6 percent at June 30, 2000, compared with 45.0 percent at December 31, 1999.

-15-

         An agreement on a new, unsecured revolving credit facility was entered into by the company and several lenders on May 10, 2000. For a discussion of this agreement, please see Note 10 to the Consolidated Financial Information.

         Capital Expenditures and Investments

         Capital expenditures and investments during the first six months of 2000 were $114.6 million for PD Mining, $46.1 million for PD Industries, including $19.0 million for the purchase of the remaining 40 percent minority interest in our Hungarian carbon black facility, and $3.9 million for Corporate and other. Capital expenditures and investments in the corresponding 1999 period were $37.9 million for PD Mining and $100.5 million for PD Industries, including $76.1 million for the acquisition of an 85 percent interest in the Korean carbon black manufacturing business of Korea Kumho Petrochemical Co. Ltd. The company expects capital expenditures and investments for the year 2000 to be approximately $336 million for PD Mining, including $133 million for the company’s share of the Morenci mine-for-leach project, and approximately $100 million for PD Industries.

         Dividends

         On June 10, 2000, we paid a regular quarterly dividend of 50 cents per share on our common shares for the 2000 second quarter; the total amount paid was $39.4 million. On June 21, 2000, the Board of Directors declared a regular dividend in the 2000 third quarter of 50 cents per common share. The dividend is to be paid on September 8, 2000, to shareholders of record at the close of business on August 18, 2000.

         Share Purchases

         This year through August 8, we have not purchased any of our shares under our May 7, 1997, share purchase authorization. Under that program, 1.7 million shares remain authorized for purchase. There were 78.7 million common shares outstanding at June 30, 2000.

         Other Matters

         For a discussion of costs incurred associated with merging Cyprus Amax’s operations into our operations, please refer to Note 5 of the Consolidated Financial Information. For a discussion of the status of the current liability components of the 1999 restructuring charges, please refer to Note 6 of the Consolidated Financial Information. For a discussion of new accounting standards, please refer to Note 7 of the Consolidated Financial Information.

Part II.  Other Information

Item 1.  Legal Proceedings

Reference is made to Paragraph III of Item 3. Legal Proceedings of the Corporation’s Form 10-K for the year ended December 31, 1999, regarding the following matter:

         In February 1999, the Connecticut Department of Environmental Protection advised the company of its intent to file suit regarding purported violations of the state air emissions limitations associated with the Phelps Dodge Norwich rod mill in Norwich, Connecticut. Since that time, the company initiated several measures to address the Department’s concerns and continued efforts to resolve these issues with the Department. Through these efforts, the company believes it has satisfied the Department concerning future operations, although the company is pursuing clarification of certain conditions contained in its permits. Also, although no complaint has yet been filed, the company has been advised that the Office of the Attorney General intends to pursue a complaint regarding alleged past air and waste noncompliance.

Item 4.  Submission of Matters to a Vote of Security Holders

         Our annual meeting was held on May 3, 2000. A total of 66,848,465 common shares, or about 84.91 percent of our issued and outstanding common shares, were represented at the meeting. Set forth below is a description of the matters voted upon at the meeting and a summary of the voting regarding each matter:

		For		Withheld
Election of Directors:
	Robert N. Burt		66,487,580	360,885
	Robert D. Krebs		66,496,455	352,010

	For		Against		Abstain
Appointment of Auditors		66,600,287		55,951		192,227

         There were no broker non-votes included in the results of the election of directors listed above, or in the appointment of auditors.

Item 6.  Exhibits and Reports on Form 8-K

(a)	Any exhibits required to be filed by the company are listed in the Index to Exhibits.
(b)	No reports on Form 8-K were filed by us during the quarter ended June 30, 2000.

-16-

Signatures

         Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PHELPS DODGE CORPORATION

(Corporation or Registrant)

Date:  August 14, 2000  By:  Stanton K. Rideout
                             Stanton K. Rideout
                         Vice President and
                         Controller
                         (Principal Accounting
                         Officer)

Index to Exhibits

3.2	Bylaws of the Corporation, as amended, effective July 1, 2000 (SEC File No. 1-82).
10.9	Third amendment to the Phelps Dodge Corporation Supplemental Retirement Plan, effective as of January 1, 2000 (SEC File No. 1-82).
10.10	Second amendment to the Phelps Dodge Corporation Supplemental Savings Plan, effective as of January 1, 2000 (SEC File No. 1-82).
10.11	First amendment to the Phelps Dodge Corporation Directors Stock Unit Plan, effective as of January 1, 2001 (SEC File  No. 1-82).
10.12	First amendment to the Phelps Dodge 1998 Stock Option and Restricted Stock Plan, effective as of May 4, 2000 (SEC File No. 1-82).
12	Computation of ratios of total debt to total capitalization.
15	Letter from PricewaterhouseCoopers LLP with respect to unaudited interim financial information.
27	Financial Data Schedule

EX-3.2

   1
                                   Exhibit 3.2
                                                  Amended Effective July 1, 2000



                                  B Y - L A W S

                            PHELPS DODGE CORPORATION


                  ARTICLE I. NAME, LOCATION and CORPORATE SEAL

         Sec. 1. The name of this Corporation is PHELPS DODGE CORPORATION.

         Sec. 2. The principal office of the Company shall be in the City of
Phoenix, County of Maricopa, State of Arizona. The Company shall also have such
other offices, either within or without the United States, and may transact its
business at such other places, as the Board of Directors may appoint.

         Sec. 3. The corporate seal of the Company shall have inscribed thereon
the name of the corporation, and the year of its creation. It shall be of the
form impressed upon the margin hereof. It shall be in charge of the Secretary. A
duplicate of the seal may be kept and used by the Treasurer or by any Assistant
Secretary or Assistant Treasurer, when so ordered by the Board of Directors.

                                             (Imprint of corporate seal)



         ARTICLE II. SHAREHOLDERS

         Sec. 1. Annual Meeting. The annual meeting of shareholders shall be
held at 12:00 noon on the first Wednesday in May of each year, or at such other
time on that day or at such time on such other day as the Board of Directors
shall from time to time determine, at the principal office of the Company in the
City of Phoenix, County of Maricopa, State of Arizona, or at such other place
within or without the State of New York as the Board of Directors shall from
time to time determine, for the purpose of electing Directors and for the
transaction of such other business as may properly be brought before the
meeting.

         The Secretary shall cause to be sent by first class mail not less than
ten nor more than fifty days before the date of such meeting, a notice thereof
addressed to each shareholder of record entitled to vote at such meeting at his
or her address as it appears on the books of the Company. Notice may also be
sent by third class mail not less than twenty-four nor more than fifty days
before the date of such meeting. Any previously scheduled annual meeting of
shareholders may be postponed by resolution of the Board of Directors upon
public announcement of the postponement on or prior to the date previously
scheduled for such annual meeting of shareholders.
   2
         Sec. 2. Special Meetings. Special meetings of the shareholders may be
held at the principal office of the Company in the City of Phoenix, County of
Maricopa, State of Arizona, or at such other place within or without the State
of New York as the Board of Directors or the Chairman of the Board shall from
time to time determine, and may be called by vote of a majority of the Board of
Directors, or by the Chairman of the Board. Special meetings of the
shareholders, or of the holders of a particular class or series of shares, shall
also be called when required by the Certificate of Incorporation at the times
and in the manner therein set forth.

         Notice of the time, place and purposes of any such special meeting
shall be served personally or sent by first class mail to each shareholder of
record entitled to vote at such meeting, not less than ten nor more than fifty
days before the date of such meeting, at his or her address as it appears on the
books of the Company. Notice may also be sent by third class mail not less than
twenty-four nor more than fifty days before the date of such meeting. A written
waiver of notice of any meeting may be made by any shareholder. Any previously
scheduled special meeting of the shareholders may be postponed by resolution of
the Board of Directors upon public announcement of the postponement on or prior
to the date previously scheduled for such special meeting of shareholders.

         Sec. 3. Quorum. At any meeting of shareholders, unless otherwise
provided by law or by the Certificate of Incorporation, the holders of shares
(of any class) aggregating a majority of the total number of shares of all
classes of the Company then issued and outstanding and entitled to vote at the
meeting, present in person or represented by proxy, shall constitute a quorum,
provided that, unless otherwise provided by law or by the Certificate of
Incorporation, when a specified item of business is required to be voted on by
any one or more of a particular class or series of shares, voting as a separate
class, the holders of a majority of the shares so eligible to vote as a separate
class shall constitute a quorum for the transaction of such specified item of
business.

         The shareholders present at any duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of
sufficient shareholders to constitute the remaining shareholders less than a
quorum. Whether or not a quorum is present at a meeting, the person presiding at
the meeting or the holders of a majority of the shares of all classes of the
Company entitled to vote at the meeting so present or represented may adjourn
the meeting from time to time. At any such adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the meeting as originally called.

         Sec. 4. Chairman and Secretary. Meetings of shareholders shall be
presided over by the Chairman of the Board or, if he is not present, by the
President or, if neither of them is present, by a Vice Chairman, or if none of
them is present, by a Vice President or, if neither the Chairman of the Board,
the President, a Vice Chairman nor a Vice President is present, by a person to
be chosen at the meeting. The Secretary of the Company shall act as Secretary at
all meetings of the shareholders, but in the absence of the Secretary the
presiding officer may appoint any person to act as Secretary of the meeting.


                                      -2-
   3
         Sec. 5. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation, each shareholder entitled to vote at a meeting of
shareholders shall be entitled to one vote, in person or by proxy, for each
share having voting power held by him or her on the record date for such
meeting, as appears on the books of the Company.

         Only the person in whose name shares stand on the books of the Company
at the time of closing of the transfer books for such meeting shall be entitled
to vote, in person or by proxy, the shares so standing in his or her name.

         The Board of Directors shall have the power and authority to fix a day
not less than ten nor more than fifty days prior to the day of holding any
meeting of shareholders, as the day as of which shareholders entitled to notice
of and to vote at such meeting shall be determined; and all persons who are
holders of record of shares with voting rights on such day, and no others, shall
be entitled to notice of and to vote at such meeting.

         Sec. 6. Inspectors of Election. The Board of Directors, in advance of
any shareholders' meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so appointed, the
person presiding at a shareholders' meeting may, and on the request of any
shareholder entitled to vote thereat shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board of Directors in advance of the meeting or at the
meeting by the person presiding thereat. 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 at such meeting with strict impartiality and
according to the best of his or her ability. Thereafter each inspector shall
have at such meeting all of the powers and duties provided by law.

         Sec. 7. Business Conducted at Meetings. At an annual meeting of
shareholders, only such business may be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting
business must be (a) specified in the notice of meeting (including any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
shareholder of the Company who was a shareholder of record at the time of giving
of notice provided for in this Section 7, who is entitled to vote at the meeting
and who complies with the notice procedures set forth in this Section 7. For
business to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Company. To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal office of the Company not less than 60 days nor
more than 90 days prior to the meeting; provided, however, that in the event
that the date of the annual meeting is scheduled for a day other than the first
Wednesday in May in such year and less than 70 days' notice or prior public
announcement of the new date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so received not later than the
close of business on the 10th day following the day on which


                                      -3-
   4
such notice of the new date of the annual meeting was mailed or such public
announcement was made.

         A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address of the shareholder proposing such business, as they appear on the
Company's books, and of the beneficial owner, if any, on whose behalf such
notice is being given, (c) the class and number of shares of the Company which
are owned beneficially and of record by such shareholder and by such beneficial
owner, and (d) any material interest in such business of such shareholder or of
such beneficial owner.

         At a special meeting of shareholders, only such business may be
conducted as shall have been properly brought before the meeting. To be properly
brought before a special meeting, business must be related to the purpose or
purposes set forth in the notice of the meeting (including any supplement
thereto) given by or at the direction of the Board of Directors or the Chairman
of the Board.

         Notwithstanding anything in the By-Laws to the contrary, no business
shall be conducted at a meeting of shareholders except in accordance with the
procedures set forth in this Section 7. The chairman of a meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 7, and if the chairman should so determine, he or she shall declare to
the meeting that any such business not properly brought before the meeting shall
not be transacted. In addition to the provisions of this Section 7, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in these By-Laws shall be deemed to affect any rights of
shareholders to request inclusion of proposals in the Company's proxy statement
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended
from time to time (the "Exchange Act") and to put before such meeting any
proposals so included in the Company's proxy statement at his or her request.

         Sec. 8. Nomination of Directors. Only persons who are nominated in
accordance with the procedures set forth in this Section 8 shall be eligible for
election as Directors at any meeting of shareholders held for the election of
Directors (an "Election Meeting"). Nominations of persons for election to the
Board of Directors of the Company may be made at an Election Meeting by or at
the direction of the Board of Directors or by a shareholder of the Company who
was a shareholder of record at the time of giving of notice provided for in this
Section 8, who is entitled to vote for the election of Directors at such
Election Meeting and who complies with the notice procedures set forth in this
Section 8. Such nominations, other than those made by or at the direction of the
Board of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Company. To be timely, a shareholder's notice must be delivered
to or mailed and received at the principal office of the Company not less than
60 days nor more than 90 days prior to such Election Meeting; provided, however,
that in the event the date of the Election Meeting is scheduled for a day other


                                      -4-
   5
than the first Wednesday in May and less than 70 days' notice or prior public
announcement of the date of such Election Meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of such Election Meeting was mailed or such public
announcement was made. Notwithstanding anything in the foregoing sentence to the
contrary, in the event that the number of Directors to be elected to the Board
of Directors of the Company at such Election Meeting is increased or there is a
vacancy to be filled at such Election Meeting in a class of Directors whose
terms do not expire at such Election Meeting and there is no public announcement
at least 70 days prior to such Election Meeting naming all of the nominees for
Director or specifying the size of the increased Board of Directors or the
number of Directors to be elected, a shareholder's notice required by this
Section 8 shall also be considered timely, but only with respect to nominees for
any positions created by such increase or vacancy, if it shall be delivered to
or mailed and received at the principal office of the Company not later than the
close of business on the 10th day following the day on which such public
announcement is first made by the Company.

         Such shareholder's notice to the Secretary shall set forth (a) as to
each person whom the shareholder proposes to nominate for election or
re-election as a Director, (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of the Company which are owned
beneficially by such person and (iv) any other information concerning such
person that is required to be disclosed in connection with the solicitation of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act (including without limitation
such person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected); and (b) as to the shareholder giving
the notice and the beneficial owner, if any, on whose behalf the nomination is
made, (i) the name and address of such shareholder, as they appear on the
Company's books, and of such beneficial owner and (ii) the class and number of
shares of the Company which are owned beneficially and of record by such
shareholder and by such beneficial owner. At the request of the Board of
Directors any person nominated by the Board of Directors for election as a
Director shall furnish to the Secretary of the Company that information required
to be set forth in a shareholder's notice of nomination which pertains to the
nominee.

         No person shall be eligible for election as a Director of the Company
unless nominated in accordance with the procedures set forth in this Section 8.
In the event that a person is validly designated as a nominee in accordance with
the foregoing and shall thereafter become unable or unwilling to stand for
election to the Board of Directors, the Board of Directors or the shareholder
who proposed such nominee, as the case may be, may designate a substitute
nominee. The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
provisions of this Section 8, and if the chairman should so determine, he or she
shall declare to the meeting that the defective nomination shall be disregarded.
In addition to the provisions of this Section 8, a shareholder shall also comply
with all applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth herein.


                                      -5-
   6
         Sec. 9. Public Announcement. For purposes of this Article II, "public
announcement" shall mean disclosure in a communication sent by first class mail
to shareholders, in a press release reported by the Dow Jones News Service,
Reuters Information Services, Inc., Associated Press or comparable national news
service or in a document filed by the Company with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.


         ARTICLE III. DIRECTORS

         Sec. 1. Number; Classification of Board; Newly Created Directorships
and Vacancies. The business of the Company shall be managed under the direction
of its Board of Directors, which shall consist of not less than nine nor more
than twelve Directors, provided that whenever the holders of any one or more
series of Preferred Shares of the Company become entitled to elect one or more
Directors to the Board of Directors in accordance with any applicable provisions
of the Certificate of Incorporation, such maximum number of Directors shall be
increased automatically by the number of Directors such holders are so entitled
to elect. Such increase shall remain in effect until the right of such holders
to elect such Director or Directors shall cease and until the Director or
Directors elected by such holders shall no longer hold office. The exact number
of Directors within the foregoing minimum and maximum limitations shall be
determined from time to time by resolution adopted by the affirmative vote of a
majority of the entire Board.

         Except as otherwise provided in any applicable provisions of the
Certificate of Incorporation relating to Preferred Shares of the Company, the
Directors shall be divided into three classes, designated Class I, Class II and
Class III. All classes shall be as nearly equal in number as possible. The terms
of office of the Directors initially classified shall be as follows: at the 1988
annual meeting of shareholders, Class I Directors shall be elected for a
one-year term expiring at the 1989 annual meeting of shareholders, Class II
Directors for a two-year term expiring at the 1990 annual meeting of
shareholders, and Class III Directors for a three-year term expiring at the 1991
annual meeting of shareholders. At each annual meeting of shareholders after the
1988 annual meeting, Directors so classified who are elected to replace those
whose terms expire at such annual meeting shall be elected to hold office until
the third succeeding annual meeting. Each Director so classified shall hold
office until the expiration of his term and until his successor has been elected
and qualified.

         Except as otherwise provided in any applicable provisions of the
Certificate of Incorporation relating to Preferred Shares of the Company, (a)
newly created directorships resulting from an increase in the number of
Directors and vacancies occurring on the Board of Directors for any reason may
be filled by vote of the Directors (including a majority of Directors then in
office if less than a quorum exists), and (b) if the number of Directors is
changed, (i) any newly created directorships or any decrease in directorships
shall be apportioned by the Board among the classes so as to make all classes as
nearly equal as possible, and (ii) when the number of Directors is increased by
the Board and any newly created directorships are filled by the Board, there
shall be


                                      -6-
   7
no classification of the additional Directors until the next annual meeting of
shareholders. Any Director elected by the Board to fill a newly created
directorship or a vacancy shall hold office until the next annual meeting of
shareholders and until his successor, classified in accordance with these
By-Laws, has been elected and qualified. No decrease in the number of Directors
constituting the Board shall shorten the term of any incumbent Director.

         Sec. 2. Quorum. One-third, but in any event not fewer than five (5)
members of the Board of Directors, shall constitute a quorum for transacting
business at all meetings. In the event of a quorum not being present, a lesser
number may adjourn the meeting to a time not more than twenty (20) days later.

         Sec. 3. Place of Meetings. The Directors may hold their meetings either
within or without the State of New York.

         Sec. 4. Meetings. Regular and special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board, any Vice
Chairman, the President, any Executive Vice President or Senior Vice President,
or any member of the Executive Committee of the Board and shall be held at such
time and place as the notice of the meeting shall specify. Notice of any such
meeting shall be given to each Director (a) personally (either orally or in
writing) not less than 12 hours in advance of such meeting, (b) by telex or
similar method of communication dispatched to his usual place of business not
less than 24 hours in advance of such meeting, or (c) by mail or telegram
dispatched to his address on file at the Company for such purpose not less than
two days in advance of such meeting. Such notice shall be given by the Secretary
or, if the Secretary is not available, by the individual calling the meeting
and, in the case of special meetings, shall also specify the object of the
meeting. At any such meeting held without notice at which every member of the
Board shall be present or shall waive notice in writing before or after the
meeting, any business may be transacted which might have been transacted if
notice of the meeting had been duly given.

         Regular meetings may also be held at such times and places as the Board
may designate from time to time, and no notice shall be required for any such
regular meeting when held as so designated.

         Any one or more members of the Board may participate in a meeting of
the Board by means of a conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at the
meeting.

         Sec. 5. Removal. Any officer elected or appointed by the Board of
Directors, may be removed at any time by the affirmative vote of a majority of
the whole Board.

         Sec. 6. Compensation. Each Director of the Company who is neither an
officer or employee of the Company or of a subsidiary of the Company nor a
Chairman of a Committee of


                                      -7-
   8
the Board of Directors of the Company shall receive an annual retainer of Thirty
Six Thousand Dollars ($36,000). Each Director of the Company who is not an
officer or employee of the Company or of a subsidiary of the Company and who is
a Chairman of a Committee of the Board of Directors of the Company shall receive
an annual retainer of Thirty Nine Thousand Dollars ($39,000). In addition, each
Director of the Company who is not an officer or employee of the Company or of a
subsidiary of the Company shall receive: (i) a fee of One Thousand Dollars
($1,000) per meeting for attendance at any regular or special meeting of the
Board or as a member or by invitation at any regular or special meeting of any
Committee of the Board and (ii) a fee of One Thousand Dollars ($1,000) for each
day (prorated for part of a day) that such Director renders service to the
Company in excess of that required by such Director's usual responsibilities
either as a member of the Board of Directors of the Company or as a member of a
Committee thereof.

         Sec. 7. Indemnification--Third Party and Derivative Actions.

                  (a) The Company shall indemnify any person made, or threatened
to be made, a party to an action or proceeding other than one by or in the right
of the Company to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any Director or officer of the Company
served in any capacity at the request of the Company, by reason of the fact that
he, his testator or intestate, is or was a Director or officer of the Company,
or is or was serving such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement and expenses (including attorneys' fees)
incurred in connection with such action or proceeding, or any appeal therein,
provided that no indemnification may be made to or on behalf of such person if
(i) his acts were committed in bad faith or were the result of his active and
deliberate dishonesty and were material to such action or proceeding or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.

                  (b) The Company shall indemnify any person made, or threatened
to be made, a party to an action by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he, his testator or intestate,
is or was a Director or officer of the Company, or is or was serving at the
request of the Company as a Director or officer of any other corporation of any
type or kind, domestic or foreign, or of any partnership, joint venture, trust,
employee benefit plan or other enterprise, against judgments, amounts paid in
settlement and expenses (including attorneys' fees) incurred in connection with
such action, or any appeal therein, provided that no indemnification may be made
to or on behalf of such person if (i) his acts were committed in bad faith or
were the result of his active and deliberate dishonesty and were material to
such action or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.

                  (c) For the purpose of this Section 7, the Company shall be
deemed to have requested a person to serve an employee benefit plan where the
performance by such person of his


                                      -8-
   9
duties to the Company also imposes duties on, or otherwise involves services by,
such person to the plan or participants or beneficiaries of the plan; excise
taxes assessed on a person with respect to an employee benefit plan pursuant to
applicable law shall be considered fines.

                  (d) The termination of any civil or criminal action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such Director or officer has not met the standard of conduct set forth in this
Section 7. However, no Director or officer shall be entitled to indemnification
under this Section 7 if a judgment or other final adjudication adverse to the
Director or officer establishes (i) that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or (ii) that he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.

         Sec. 8. Payment of Indemnification; Repayment.

                  (a) A person who has been successful, on the merits or
otherwise, in the defense of a civil or criminal action or proceeding of the
character described in Section 7 of this Article shall be entitled to
indemnification as authorized in such Section.

                  (b) Except as provided in Section 8(a), any indemnification
under Section 7 of this Article, unless ordered by a court, shall be made by the
Company only if authorized in the specific case:

                           (1) by the Board of Directors acting by a quorum
consisting of Directors who are not parties to the action or proceeding giving
rise to the indemnity claim upon a finding that the Director or officer has met
the standard of conduct set forth in Section 7 of this Article; or

                           (2) if a quorum under the foregoing clause (1) is not
obtainable or, even if obtainable, a quorum of disinterested Directors so
directs:

                                    (i) by the Board of Directors upon the
opinion in writing of independent legal counsel (i.e., a reputable lawyer or law
firm not under regular retainer from the Company or any subsidiary corporation)
that indemnification is proper in the circumstances because the standard of
conduct set forth in Section 7 of this Article has been met by such Director or
officer, or

                                    (ii) by the holders of the Common Shares of
the Company upon a finding that the Director or officer has met such standard of
conduct.

                  (c) Expenses incurred by a Director or officer in defending a
civil or criminal action or proceeding shall be paid by the Company in advance
of the final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of such Director or officer to repay such amount in
case he is ultimately found, in accordance with this Article, not to be entitled


                                      -9-
   10
to indemnification or, where indemnity is granted, to the extent the expenses so
paid exceed the indemnification to which he is entitled.

                  (d) Any indemnification of a Director or officer of the
Company under Section 7 of this Article, or advance of expenses under Section
8(c) of this Article, shall be made promptly, and in any event within 60 days,
upon the written request of the Director or officer.

         Sec. 9. Enforcement; Defenses. The right to indemnification or advances
as granted by this Article shall be enforceable by the Director or officer in
any court of competent jurisdiction if the Company denies such request, in whole
or in part, or if no disposition thereof is made within 60 days. Such person's
expenses incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company. It shall be a defense to any such action (other than
an action brought to enforce a claim for the advance of expenses under Section
8(c) of this Article where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in Section 7 of this Article, but the burden of proving such defense shall be on
the Company. Neither the failure of the Company (including its Board of
Directors, its independent legal counsel, and the holders of its Common Shares),
to have made a determination that indemnification of the claimant is proper in
the circumstances nor the fact that there has been an actual determination by
the Company (including its Board of Directors, its independent legal counsel,
and the holders of its Common Shares) that indemnification of the claimant is
not proper in the circumstances, shall be a defense to the action or create a
presumption that the claimant is not entitled to indemnification.

         Sec. 10. Contract; Savings Clause; Preservation of Other Rights.

                  (a) The foregoing indemnification provisions shall be deemed
to be a contract between the Company and each Director and officer who serves in
such capacity at any time while these provisions as well as the relevant
provisions of the New York Business Corporation Law are in effect and any repeal
or modification thereof shall not affect any right or obligation then existing
with respect to any state of facts then or previously existing or any action or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a contract right may not be modified
retroactively without the consent of such Director or officer.

                  (b) If this Article or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify each Director or officer of the Company against
judgments, fines, amounts paid in settlement and expenses (including attorneys'
fees) incurred in connection with any actual or threatened action or proceeding,
whether civil or criminal, including an actual or threatened action by or in the
right of the Company, or any appeal therein, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated and to
the full extent permitted by applicable law.

                  (c) The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote


                                      -10-
   11
of shareholders or Directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a Director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. The Company is hereby authorized to provide further indemnification if
it deems it advisable by resolution of shareholders or Directors or by
agreement.

         Sec. 11. Indemnification of Persons Not Directors or Officers of the
Company. The Company may, by resolution adopted by the Board of Directors of the
Company, indemnify any person not a Director or officer of the Company, who is
made, or threatened to be made, a party to an action or proceeding, whether
civil or criminal, by reason of the fact that he, his testator or intestate, is
or was an employee or other agent of the Company, against judgments, fines,
amounts paid in settlement and expenses (including attorneys' fees) incurred in
connection with such action or proceeding, or any appeal therein, provided that
no indemnification may be made to or on behalf of such person if (i) his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to such action or proceeding, or (ii) he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled.

         ARTICLE IV. EXECUTIVE AND OTHER COMMITTEES

         Sec. 1. The Board of Directors shall, by an affirmative vote of a
majority of the whole Board, appoint from the Directors an Executive Committee
not more than nine and not less than three, of which one-third (but not less
than two) shall constitute a quorum. Should it be impracticable at any time, due
to absence or illness of members or other cause, to obtain a quorum of the
members so appointed for any desired meeting, the Secretary, or, if the
Secretary is not available, the member calling the meeting, may call upon any
other Director or Directors, not members of such Executive Committee but who
have been designated by the Board as alternate members of the Executive
Committee, to make up a quorum for that particular meeting, which other Director
or Directors shall for the time being be members of said Executive Committee,
and the acts and proceedings of the Committee as so constituted for such meeting
shall have the same force and effect as the acts and proceedings of meetings
where a quorum of the regular committee is in attendance.

         The Board of Directors may from among their number also, by a similar
vote, appoint any other committees.

         The Board of Directors shall fill vacancies in the Executive Committee
by election from Directors; and at all times it shall be the duty of the Board
of Directors to keep the membership of the Executive Committee up to the
required number.

         Any member of the Executive Committee who shall cease to be a Director
shall ipso facto cease to be a member of the Committee.


                                      -11-
   12
         All action by the Executive Committee, or by other committees appointed
by the Board of Directors, shall be reported to said Board at its meeting next
succeeding such action, and, except to the extent stated in the second sentence
of the first paragraph of Section 2 of this Article, shall be subject to
revision, alteration, or approval by the Board of Directors.

         The Executive and other committees shall each fix its own rules of
procedure and arrange its own place of meeting; but in every case (except in the
case of the Executive Committee) a majority of such committee shall be necessary
to constitute a quorum, and in every case (except in the case of the Executive
Committee) the affirmative vote of a majority of the members of each of such
committees shall be necessary for its adoption of any resolution. Any one or
more members of the Executive or any other committee may participate in a
meeting of such committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at the meeting.

         Meetings of the Executive Committee shall be held whenever called by
the Chairman of the Board, any Vice Chairman, the President, any Executive Vice
President or Senior Vice President or any member of that Committee, and shall be
held at such time and place as the notice of the meeting shall specify. Notice
of any such meeting shall be given to each member of the Committee (a)
personally (either orally or in writing) not less than 12 hours in advance of
such meeting, (b) by telex or similar method of communication dispatched to his
usual place of business not less than 24 hours in advance of such meeting, or
(c) by mail or telegram dispatched to his address on file at the Company for
such purpose not less than two days in advance of such meeting. Such notice
shall be given by the Secretary or, if the Secretary is not available, by the
individual calling the meeting and shall also specify the object of the meeting.

         The Executive Committee shall keep regular minutes and cause them to be
recorded in a book to be kept in the principal office of the Company for that
purpose.

         Sec. 2. Powers of Committees. The Executive Committee shall, whenever
the Board of Directors is not in session, direct the management of the affairs
of the Company in all cases in which specific directions to the contrary shall
not have been given, or specific action of the Board of Directors is required by
law. Notwithstanding anything to the contrary stated in the fifth paragraph of
Section 1 of this Article, the rights of third persons acquired in reliance on
an Executive Committee resolution prior to receiving notice of action by the
Board of Directors shall not be prejudiced by action by the Board of Directors.

         Other committees appointed by the Board of Directors shall have such
powers as the Board may delegate by resolution.

         Sec. 3. Compensation. The members of the Executive Committee and the
members of any other committee appointed by the Board of Directors shall receive
such compensation for their services as from time to time shall be fixed by the
Board of Directors.


                                      -12-
   13
         ARTICLE V. OFFICERS AND THEIR DUTIES

         Sec. 1. Officers. The officers of the Company shall be: Chairman of the
Board of Directors, President, Treasurer, Secretary, and Controller, and such
Vice Chairmen, such Vice Presidents (one or more of whom may be designated
Executive Vice President or Senior Vice President), and such Assistant Vice
Presidents, Assistant Treasurers, Assistant Secretaries, and Assistant
Controllers as the Board of Directors in its discretion may elect or appoint. No
officer other than the Chairman of the Board need be a member of the Board of
Directors. Any number of offices may be held by the same person, except that the
same person shall not be (i) Treasurer and Controller or (ii) Chairman of the
Board or President and Secretary.

         Officers shall be elected annually at the first meeting of the Board of
Directors following the annual meeting of shareholders, subject to the power of
the Board of Directors to fill vacancies at any time. All officers shall serve
at the pleasure of the Board of Directors and may be removed as provided in
Article III, Section 5 of these By-Laws.

         Sec. 2. Chairman of the Board. The Chairman of the Board of Directors
shall be the chief executive officer of the Company and shall be responsible to
the Board of Directors for the administration and operations of the Company. He
shall preside at all meetings of the Board of Directors and at all meetings of
shareholders. By virtue of his office he shall be a member of the Executive
Committee of the Board of Directors and shall preside at meetings of the
Executive Committee. He shall have such other powers and perform such other
duties as from time to time may be assigned to him by, and shall be responsible
solely to, the Board of Directors. He may sign, with the Treasurer, all
promissory notes of the Company and any guarantees of the Company in respect of
borrowed money, and, with the Secretary when the corporate seal is to be
affixed, all share certificates, bonds, mortgages and other contracts of the
Company.

         Sec. 2-A. Vice Chairmen. Each Vice Chairman shall have such powers and
perform such duties as from time to time may be assigned to him by the Board of
Directors or the Chairman of the Board. Any Vice Chairman may sign, with the
Treasurer, all promissory notes of the Company and any guarantees of the Company
in respect of borrowed money, and, with the Secretary when the corporate seal is
to be affixed, all share certificates, bonds, mortgages, and other contracts of
the Company.

         Sec. 3. President. The President shall have such powers and perform
such duties as from time to time may be assigned to him by the Board of
Directors or by the Chairman of the Board. He may sign, with the Treasurer, all
promissory notes of the Company and any guarantees of the Company in respect of
borrowed money, and, with the Secretary when the corporate seal is to be
affixed, all share certificates, bonds, mortgages, and other contracts of the
Company.


                                      -13-
   14
         Sec. 3-A. Vice Presidents. Each Vice President shall have such powers
and perform such duties as from time to time may be assigned to him by the Board
of Directors, the Chairman of the Board, any Vice Chairman, or the President.
Any Vice President may sign, with the Treasurer, all promissory notes of the
Company and any guarantees of the Company in respect of borrowed money, and,
with the Secretary when the corporate seal is to be affixed, all share
certificates, bonds, mortgages, and other contracts of the Company.

         Sec. 4. Assistant Vice Presidents. The Board of Directors may elect or
appoint one or more Assistant Vice Presidents, each of whom shall have such
powers and perform such duties as from time to time may be assigned to him by
the Board of Directors, the Chairman of the Board, any Vice Chairman, the
President, or any Vice President.

         Sec. 5. Secretary. The Secretary shall keep a record of all proceedings
of the Board of Directors, and of all meetings of the shareholders, and of the
Executive Committee and of all other committees, in books provided for that
purpose, and he shall attend to giving and serving all notices of the Company.
The Secretary shall keep in safe custody the seal of the Company and he shall
affix such seal on all share certificates, bonds, mortgages, and other contracts
of the Company executed under such seal. He shall have charge of the records of
shareholders of the Company, including transfer books, and share ledgers, and
such other books and papers as the Board of Directors shall direct, and in
general shall perform all the duties incident to the office of Secretary.

         Sec. 6. Assistant Secretaries. The Board of Directors may appoint one
or more Assistant Secretaries, who shall have power to sign, with the Chairman
of the Board, any Vice Chairman, the President, or any Vice President, share
certificates of the Company. In the absence of the Secretary, the Assistant
Secretaries shall be vested with the powers of, and any one of them may perform
the duties of, the Secretary. Each Assistant Secretary shall perform such other
duties as from time to time may be assigned to him by the Board of Directors,
the Chairman of the Board, any Vice Chairman, the President, or any Vice
President.

         Sec. 7. Treasurer. The Treasurer shall have in his charge all the funds
and securities of the Company. When necessary or proper, he, or such other
officer or officers of the Company as may be so duly authorized by the Board of
Directors, shall endorse on behalf of the Company for collection checks, notes
or other obligations and shall deposit the same to the credit of the Company in
such bank or banks or depositories as the Board of Directors may designate or as
may be designated by persons authorized by the Board of Directors to make such
designations. He, or such other officers or employees of the Company or any of
its subsidiaries, acting individually unless otherwise provided, as may from
time to time be designated by the Board of Directors or be designated in writing
by any officer or officers of the Company duly authorized by the Board of
Directors to make such designations, shall sign all receipts and vouchers for
payments made to the Company, and shall sign all checks, drafts or bills of
exchange, provided that the Board of Directors from time to time may designate
other persons as authorized signatories of the Company or authorize other
persons to make such designations on behalf of the Company. The Treasurer
jointly with the Chairman of the Board, any Vice Chairman, the President, or any
Vice President


                                      -14-
   15
shall sign all promissory notes of the Company and any guarantees of the Company
in respect of borrowed money, and shall pay out and dispose of the same under
the direction of the Board; he shall keep a complete set of books, showing the
financial transactions of the Company, and shall exhibit his books to any
Director upon application at the office of the Company, during business hours;
he shall make such reports as the Board of Directors or the Executive Committee
may from time to time request; and he shall perform all acts incidental to the
office of Treasurer, subject, nevertheless, to the control of the Board of
Directors.

         He shall give such bonds for the faithful discharge of his duties as
Treasurer as the Board of Directors may require.

         Sec. 8. Assistant Treasurers. The Board of Directors may appoint one or
more Assistant Treasurers. In the absence of the Treasurer, the Assistant
Treasurers shall be vested with the powers of, and any one of them may perform
the duties of, the Treasurer. Each Assistant Treasurer shall perform such other
duties as from time to time may be assigned to him by the Board of Directors,
the Chairman of the Board, any Vice Chairman, the President, or any Vice
President.

         Sec. 9. Controller. The Controller shall have supervision and direction
of all accounts of the Company, and shall see that the system of accounts is
duly enforced and maintained.

         There shall be kept in his office a general set of books containing a
complete set of all the business transactions of the Company, and he shall, as
often as necessary, make an examination of the accounts of any officer, agent or
employee entrusted with the handling or care of money of the Company.

         It shall be the duty of the Controller to know that all money belonging
to the Company, collected from any source by any officer, agent or employee, is
properly accounted for and promptly paid into the treasury, and that all
accounts of the Company are properly and promptly settled.

         It shall be the duty of the Controller to know that all bonds required
of officers, agents and employees for the faithful performance of their duties
are given. Such bonds shall be transmitted to the Controller for safe custody
and shall be released only upon a complete and satisfactory settlement of the
accounts covered by them, unless otherwise ordered by the Board.

         Sec. 10. Additional Officers; Division Officers. In addition to the
above officers, the Board of Directors may also appoint one or more general
counsel and one or more auditors and such other officers as they may deem wise
and advisable for the best interests of the Company, who shall perform such
duties as from time to time may be assigned to them by the Board of Directors.
If the Board of Directors establishes divisions of the Corporation, the Board
may also establish such division offices and appoint such division officers as
the Board deems appropriate. Such division officers shall have such powers and
perform such duties as from time to time may be assigned to them by the Board of
Directors. The Board of Directors shall fix salaries for all officers of the


                                      -15-
   16
Company, or may delegate, to any committee of the Board or to the Chairman of
the Board, the power to fix salaries of officers of the Company in cases where
the Board deems it appropriate to so delegate.

         Sec. 11. Voting upon Stocks. Unless otherwise ordered by the Board of
Directors, the Chairman of the Board, any Vice Chairman, the President or any
Vice President shall have full power and authority on behalf of the Company to
attend, act and vote, or in the name of the Company to execute proxies
appointing any person or persons to attend, act and vote on behalf of the
Company, at any meeting of stockholders of any corporation in which the Company
may hold stock, and at any such meeting such officer or person or persons
appointed in any such proxy, as the case may be, shall possess and may exercise
on behalf of the Company any and all rights, powers and privileges incident to
the ownership of such stock. The Board of Directors may by resolution from time
to time confer like powers upon any other person or persons.

         Sec. 12. Sales of Stock. Neither the corporation of Phelps Dodge
Corporation nor any subsidiary company by it controlled, shall speculate in the
stock either of Phelps Dodge Corporation or of any subsidiary company, or shall
buy or sell same except in the regular course of legitimate business of such
company or for the purpose of retirement and this provision shall be unalterable
save by the vote of the holders of a majority of the stock of the company voting
thereon at a meeting called, as provided by these By-Laws.

         ARTICLE VI. SHARE CERTIFICATES AND TRANSFERS

         Sec. 1. Certificates for Shares. The Board of Directors shall prepare,
in form according to law, and approve, certificates evidencing shares of the
Company.

         No certificate shall be valid unless it is signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice President; and also by
the Secretary or an Assistant Secretary. The signatures of the officers upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent or registered by a registrar other than the Company itself or its
employee.

         Sec. 2. Transfer of Shares. Shares of the Company shall be transferred
only on the books of the Company by the holder thereof in person or by his or
her attorney duly authorized thereto in writing, and by cancellation and
surrender of certificates for a like number of shares.


         ARTICLE VII. AMENDMENTS

         These By-Laws, with the exception of Section 12 of Article V, may be
amended or repealed by a vote of a majority of all the Directors at any regular
or special meeting of the Board.


                                      -16-
   17
         ARTICLE VIII.

         The Company expressly elects not to be governed by the provisions
currently designated as Article 2, Chapter 23, Title 10 of the Arizona Revised
Statutes.


                                      -17-

EX-10.9

   1
                                  Exhibit 10.9

                                 THIRD AMENDMENT
                                     TO THE
                            PHELPS DODGE CORPORATION
                          SUPPLEMENTAL RETIREMENT PLAN


         Effective as of January 1, 1997, Phelps Dodge Corporation (the
"Company") adopted the Phelps Dodge Corporation Supplemental Retirement Plan
(the "Plan") as an amendment and restatement of the Comprehensive Executive
Non-qualified Retirement and Savings Plan of Phelps Dodge Corporation. The Plan
subsequently was amended effective January 1, 1998 and January 1, 1999. By this
Amendment, the Company intends to amend the Plan to change the eligibility
provisions of the Plan.

         1. The provisions of this Amendment shall be effective as of January 1,
2000 unless otherwise noted below. This Amendment shall amend only the
provisions of the Plan as set forth herein, and those provisions not expressly
amended hereby shall be considered in full force and effect.

         2. Section 3.1 of the Plan (Selection of Participants) is hereby
amended and restated in its entirety as follows:

                  (a) GENERAL. Any Employee who was participating in the Plan
         prior to January 1, 2000 shall continue to be eligible to participate
         in the Plan, subject to the Plan Administrator's right to terminate a
         Participant's participation pursuant to Sections 3.1(c) or 3.4.
         Effective as of January 1, 2000, all Employees who are eligible to
         participate in the AICP are eligible to participate in the Plan,
         regardless of the individual Employee's AICP Grade classification. From
         such group, the Plan Administrator shall select Employees for
         participation in the Plan. The Plan Administrator's selections shall be
         made in its discretion and shall be final and binding for all purposes
         under this Plan.

                  (b) LIMITATION ON PARTICIPATION. For purposes of Title I of
         ERISA, the Plan is intended to be an unfunded plan of deferred
         compensation covering a select group of management or highly
         compensated employees. As a result, participation in the Plan shall be
         limited to Employees who are properly included in one or both of these
         categories. The Plan Administrator, in the exercise of its discretion,
         may exclude an Employee who otherwise meets the requirements of Section
         3.1(a) from participation in the Plan if it concludes that the
         exclusion of that Employee is necessary to satisfy these requirements.
         The Plan Administrator also may exclude an Employee who otherwise


                                       1
   2
         meets the requirements of Section 3.1(a) for any other reason, or for
         no reason, as the Plan Administrator deems to be appropriate.

                  (c) TERMINATION OF PARTICIPATION. A Participant shall cease to
         participate in the Plan upon either his exclusion from participation by
         the Plan Administrator or upon his termination of employment with the
         sponsoring Employers, except that if he has met the eligibility
         conditions for an immediate or deferred vested retirement benefit, he
         shall remain a Participant for purposes of receiving his benefit at the
         appropriate time.


         IN WITNESS WHEREOF, PHELPS DODGE CORPORATION has caused this Third
Amendment to be executed as of this 28th day of April, 2000.

                                       PHELPS DODGE CORPORATION

                                       By: /s/ Stuart L. Marcus
                                          Stuart L. Marcus
                                          Vice President, Human Resources


                                       2

EX-10.10

   1
                                  Exhibit 10.10

                                SECOND AMENDMENT
                                     TO THE
                            PHELPS DODGE CORPORATION
                            SUPPLEMENTAL SAVINGS PLAN

         Effective as of January 1, 1997, Phelps Dodge Corporation (the
"Company") adopted the Phelps Dodge Corporation Supplemental Savings Plan (the
"Plan") as an amendment and restatement of the Comprehensive Executive
Non-qualified Retirement and Savings Plan of Phelps Dodge Corporation. The Plan
subsequently was amended effective January 1, 1999. By this Amendment, the
Company intends to amend the Plan to change the eligibility provisions of the
Plan.

         1. The provisions of this Amendment shall be effective as of January 1,
2000 unless otherwise noted below. This Amendment shall amend only the
provisions of the Plan as set forth herein, and those provisions not expressly
amended hereby shall be considered in full force and effect.

         2. Section 3.1(a) of the Plan (Selection of Participants - General
Rule) is hereby amended and restated in its entirety as follows:

                  (a) GENERAL RULE. Any Employee who was participating in the
         Plan prior to January 1, 2000 shall continue to be eligible to
         participate in the Plan, subject to the Plan Administrator's right to
         terminate a Participant's participation pursuant to Sections 3.1(c) or
         3.4. Effective as of January 1, 2000, all Employees who are eligible to
         participate in the AICP are eligible to participate in the Plan,
         regardless of the individual Employee's AICP Grade classification. From
         such group, the Plan Administrator shall select Employees for
         participation in the Plan. The Plan Administrator's selections shall be
         made in its discretion and shall be final and binding for all purposes
         under this Plan.


                                       1
   2
         IN WITNESS WHEREOF, PHELPS DODGE CORPORATION has caused this Second

Amendment to be executed as of this 28 day of April, 2000.

                                    PHELPS DODGE CORPORATION

                                    By: /s/ Stuart L. Marcus
                                       --------------------------------
                                    Stuart L. Marcus
                                    Vice President, Human Resources


                                        2

EX-10.11

   1

                                  Exhibit 10.11

                             FIRST AMENDMENT TO THE
                            PHELPS DODGE CORPORATION
                            DIRECTORS STOCK UNIT PLAN

         Effective as of January 1, 1997, Phelps Dodge Corporation
("Corporation") adopted the Phelps Dodge Corporation Directors Stock Unit Plan
("Plan") in order to attract, retain and motivate the best qualified directors
for the benefit of the Corporation and its shareholders. Subsequently, the Plan
was amended and restated, effective January 1, 1998, to reflect the replacement
of the Retirement Plan for Directors of Phelps Dodge Corporation by the Plan and
to change the name of the Plan.

         By this Amendment, the Corporation intends to amend the Plan to modify
the manner in which the number of Units awarded to Eligible Directors is
calculated under the Plan.

         1. The provisions of this First Amendment shall be effective as of
January 1, 2001. This First Amendment shall amend only the provisions of the
Plan as set forth herein and those provisions not expressly amended hereby shall
remain in full force and effect.

         2. Section 3.(a) of the Plan is amended and restated in its entirety to
read as follows:

         Section 3. Units

         (a) Unit Awards. Subject to the requirements of Section 5(a), on each
         January 1, during the term of the Plan, each Eligible Director serving
         as a Director on such date, who has been a Director continuously since
         the prior November 15, shall be awarded the number of Units equal in
         value to Fifty Thousand Dollars ($50,000.00) as of the date of Grant.
         The number of Units granted in accordance with this Section 3(a) shall
         be calculated by dividing $50,000.00 by the Fair Market Value as of the
         December 31 immediately preceding the date of Grant. For purposes of
         this calculation, Unit awards can result in fractional Units being
         credited to an Eligible Director's Account.

         3. Section 4.(a) of the Plan is amended and restated in its entirety to
read as follows:

         Section 4. Vesting and Forfeitures

         (a) Vesting. All of the Units awarded each year pursuant to Section
         3(a) shall be vested as of the date of Grant. Units awarded pursuant to
         Section 3(b) shall be vested as of January 1, 1998.

IN WITNESS WHEREOF, Phelps Dodge Corporation has caused this First Amendment to
be executed this 11 day of July, 2000.

                                   PHELPS DODGE CORPORATION

                                   By:  /s/ DAVID PULATIE

                                   Its: Senior Vice President, Human Resources

EX-10.12

   1

                                 Exhibit 10.12

                                  AMENDMENT TO
                         PHELPS DODGE 1998 STOCK OPTION
                           AND RESTRICTED STOCK PLAN

         WHEREAS, Phelps Dodge Corporation (the "Corporation") adopted the
Phelps Dodge 1998 Stock Option and Restricted Plan (the "Plan"); and

         WHEREAS, pursuant to Section 7 of the Plan, the Board of Directors
retained the right to amend the Plan;

         NOW, THEREFORE, the Plan is amended as follows:

1. The fourth sentence of Section 5.4 of the Plan is deleted in its entirety and
a new fourth sentence is inserted in lieu thereof, to read as follows:

         Without limiting the generality of the foregoing, the Committee may
         approve, pursuant to the foregoing sentence, provisions making
         installments exercisable (1) upon a Participant's Retirement (provided
         that, in the event that the Participant is retiring prior to his normal
         retirement date and such retirement is not determined by the Committee
         to be adverse to the Corporation, such acceleration shall be
         conditioned upon the execution by the Participant of a release in favor
         of the Corporation and its affiliates in a form acceptable to the
         Corporation), (ii) six months (or such greater or lesser period as the
         Committee shall in its discretion determine) from the date on which an
         Option is granted if such Option is granted in conjunction with the
         Participant's exercise of another Option (whether such Option is issued
         under this Plan or a Predecessor Plan) with Common Shares already owned
         by the Participant, (iii) not later than the date the Participant
         ceases to be employed by the Corporation if he ceases to be so employed
         within two years following a Change of Control of the Corporation, and
         (iv) at such time and for such period as the Committee deems
         appropriate, in the event of a Change of Control.

2. Section 6.4 of the Plan is amended to add a new sentence at the end thereof,
to read as follows:

         Notwithstanding the foregoing, if a Participant incurs a tax liability
         in respect of an award of Restricted Stock prior to the time the
         Restricted Period would otherwise lapse hereunder (other than by reason
         of the election by the Participant under the Code to be taxed at the
         time of grant), the Restricted Period shall lapse on the date such tax
         liability arises with respect to the number of whole Common Shares
         having a Fair Market Value at such time no greater than the amount
         required to satisfy all tax withholding requirements applicable thereto
         (as determined in accordance with Section 9.3 hereof). Unless the
         Committee shall instruct otherwise, the Corporation shall withhold such
         released Common Shares to satisfy such withholding obligations.
   2
3. The second sentence of Section 9.3 of the Plan is deleted in its entirety and
a new second sentence is inserted in lieu thereof, to read as follows:

         Subject to any required withholding of Common Shares pursuant to
         Section 6.4, the Committee may, in its discretion, permit a Participant
         to elect, subject to such conditions as the Committee shall impose, (i)
         to have Common Shares otherwise issuable or deliverable under the Plan
         withheld by the Corporation or (ii) to deliver to the Corporation
         previously acquired shares of Stock, in each case, having a Fair Market
         Value sufficient to satisfy all or part of the minimum amount of the
         Participant's total Federal, state and local tax withholding obligation
         associated with the transaction.

                  IN WITNESS WHEREOF, the Corporation has caused this Amendment
to be executed by its duly authorized officer as of the 4th day of May, 2000.

                                   PHELPS DODGE CORPORATION

                                   By:  /s/ DAVID PULATIE

                                   Title: SVP, Human Resources

EX-12

   1
                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                                   Exhibit 12

COMPUTATION OF TOTAL DEBT TO TOTAL CAPITALIZATION
(Unaudited; dollars in millions)




                                                 June 30,       December 31,
                                                   2000            1999
                                                 --------       -----------
                                                          
Short-term debt                                  $  418.0           451.2
Current portion of long-term debt                   121.9           131.3
Long-term debt                                    2,157.7         2,172.5
                                                 --------        --------

     Total debt                                   2,697.6         2,755.0
Minority interests in subsidiaries                   87.8            96.3
Common shareholders' equity                       3,132.5         3,276.8
                                                 --------        --------

     Total capitalization                        $5,917.9         6,128.1
                                                 ========         =======


Ratio of total debt to total capitalization          45.6%           45.0%
                                                 ========         =======

EX-15

   1
                      [PRICEWATERHOUSECOOPERS LETTERHEAD]

                                   Exhibit 15



August 10, 2000


Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549


Commissioners:

We are aware that our report dated July 19, 2000 on our review of interim
financial information of Phelps Dodge Corporation (the "Corporation") for the
period ended June 30, 2000 and included in the Corporation's quarterly report on
Form 10-Q for the quarter then ended is incorporated by reference in its
Registration Statement and Post-Effective Amendment No. 1 and Form S-3 (Nos.
33-44380 and 333-36415) Post-Effective Amendment No. 2 on Form S-3 (No.
33-44380), Registration Statements on Form S-8 (Nos. 33-26442, 33-6141,
33-26443, 33-29144, 33-19012, 2-67317, 33-34363, 33-34362, 33-62648, 333-42231,
and 333-52175) and Post-Effective Amendment No. 4 on Form S-8 to the
Registration Statement on Form S-4 (No. 333-86061).


Very truly yours,



/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Phoenix, Arizona

EX-27

 

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT JUNE 30, 2000 AND THE RELATED CONSOLIDATED
STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30,
2000 OF PHELPS DODGE CORPORATION AND ITS SUBSIDIARIES AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

                             
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-START>                             JAN-01-2000
<PERIOD-END>                               JUN-30-2000
<EXCHANGE-RATE>                                      1
<CASH>                                         246,300
<SECURITIES>                                         0
<RECEIVABLES>                                  572,300
<ALLOWANCES>                                         0
<INVENTORY>                                    440,800
<CURRENT-ASSETS>                             1,550,300
<PP&E>                                       8,801,900
<DEPRECIATION>                               2,866,800
<TOTAL-ASSETS>                               7,972,600
<CURRENT-LIABILITIES>                        1,345,700
<BONDS>                                      2,157,700
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       492,000
<OTHER-SE>                                   2,640,500
<TOTAL-LIABILITY-AND-EQUITY>                 7,972,600
<SALES>                                      2,232,600
<TOTAL-REVENUES>                             2,232,600
<CGS>                                        1,768,600
<TOTAL-COSTS>                                1,768,600
<OTHER-EXPENSES>                               312,000
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             109,400
<INCOME-PRETAX>                               (11,700)
<INCOME-TAX>                                   (5,300)
<INCOME-CONTINUING>                           (18,400)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                  (18,400)
<EPS-BASIC>                                     (0.23)
<EPS-DILUTED>                                   (0.23)