-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FkhR2Mzzh0JVFVcKE3sx6hOXbpgXV8yFufYGE5EX4Jbt9O6rN7qwYyun6oCg7Y6e FiOC+YF96sULHIKbHEsnzQ== 0000007649-99-000012.txt : 19990701 0000007649-99-000012.hdr.sgml : 19990701 ACCESSION NUMBER: 0000007649-99-000012 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASARCO INC CENTRAL INDEX KEY: 0000007649 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 134924440 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-00164 FILM NUMBER: 99656665 BUSINESS ADDRESS: STREET 1: 180 MAIDEN LN CITY: NEW YORK STATE: NY ZIP: 10038 BUSINESS PHONE: 2125102000 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN SMELTING & REFINING CO DATE OF NAME CHANGE: 19760607 10-K/A 1 1998 FORM 10 K/A SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 1998 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 Commission file number 1-164 ASARCO Incorporated (Exact name of registrant as specified in its charter) New Jersey 13-4924440 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 180 Maiden Lane, New York, N. Y. 10038 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 510-2000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange on Title of each class which registered Common Stock, without par value New York Stock Exchange 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_____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. As of February 26, 1999, there were of record 39,669,569 shares of Common Stock, without par value, outstanding, and the aggregate market value of the shares of Common Stock (based upon the closing price of Asarco Common Stock on the New York Stock Exchange Composite Transactions) of ASARCO Incorporated held by nonaffiliates was approximately $0.6 billion. PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE: Part III: Proxy statement in connection with the Annual Meeting to be held on April 28, 1999. Part IV: Exhibit index is on pages C1 through C3. ASARCO Incorporated FORM 10-K/A December 31, 1998 INDEX Page Number FORM 10-K/A i ITEM 14 ii EXHIBIT INDEX C1-C3 FORM 11-K C44-C60 1 ASARCO Incorporated and Subsidiaries FORM 10-K/A December 31, 1998 The undersigned registrant hereby amends the 1998 Annual Report on Form 10-K as set forth in the pages attached hereto to add the information, financial statements and exhibits required by Form 11-K filed with respect to the Savings Plan of ASARCO Incorporated and Participating Subsidiaries pursuant to Rule 15d-21. The following item has been refiled to reflect such amendments: Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K. The Exhibit Index has been amended and is refiled herewith to include as Exhibit 99 the report in 11-K relating to the Savings Plan for Salaried Employees of ASARCO Incorporated and Participating Subsidiaries, which is filed herewith. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. ASARCO Incorporated By /s/ W. Dowd W. Dowd Vice President and Chief Financial Officer Date: June 28, 1999 i PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K ii ASARCO Incorporated EXHIBIT INDEX Exhibit Indexed No. Description on Page 3. Certificate of Incorporation and By-Laws (a) Certificate of Incorporation - restated, filed June 26, 1998 (Filed as an Exhibit to the Company's Report on Form 10-Q for the quarter ended June 30, 1998 and incorporated herein by reference) (b) By-Laws as last amended on June 26, 1991 (Filed as an Exhibit to the Company's 1991 Annual Report on Form 10-K and incorporated herein by reference) 4. Instruments defining the rights of security holders, including indentures (a) There are currently various separate indentures, agreements or similar instruments under which long-term debt of Asarco is currently outstanding. The Registrant hereby agrees to furnish to the Commission, upon request, a copy of any of the instruments which define the rights of holders of long-term debt securities. None of the outstanding instruments represent long-term debt securities in excess of 10% of the total assets of Asarco as of December 31, 1998 (b) Form of Rights Agreement dated as of July 26, 1989, between the Company and First Chicago Trust Company of New York, as Rights Agent, defining the rights of shareholders under a July 1989 Shareholders' Rights plan and dividend declaration (Filed as an Exhibit to the Company's report on Form 8-K filed on July 28, 1989 and incorporated herein by reference) (c) Rights Agreement Amendment dated as of September 24, 1992, between the Company and The Bank of New York, as Successor Rights Agent under the Rights Agreement listed above (Filed as an Exhibit to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference) C1 ASARCO Incorporated EXHIBIT INDEX Exhibit Indexed No. Description on Page (d) Second Rights Agreement Amendment dated as of February 23, 1995, between the Company and The Bank of New York (Filed as an Exhibit to the Company's report on Form 8-K filed on February 24, 1995, and incorporated herein by reference) (e) Form of Rights Agreement dated as of January 28, 1998, between the Company and The Bank of New York, as Rights Agent, defining the rights of shareholders' under a January 1998 Stockholders' Rights plan and dividend declaration (Filed as an Exhibit to the Company's Form 8-K filed on March 2, 1998, and incorporated herein by reference) (f) Indenture Agreement dated as of February 1, 1993 between the Company and Bankers Trust Company, as Trustee, covering the issuance of debt securities registered by the Company in April 1992, not to exceed $250 million (Filed as an Exhibit to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference) (g) Indenture Agreement dated as of October 1, 1994 between the Company and Chemical Bank, as Trustee covering the issuance of debt securities registered by the Company in October 1994, not to exceed $300 million (Filed as an Exhibit to the Company's registration statement on Form S-3 filed on October 12, 1994, and incorporated herein by reference) Material Contracts 10. (a) Stock Option Plan as last amended on November 30, 1994 (Filed as an Exhibit to the Company's 1994 Annual Report on Form 10-K and incorporated herein by reference) (b) Form of Amended Employment Agreement dated February 26, 1997, between the Company and currently 11 of its executive officers, including Messrs. R. de J. Osborne, F.R. McAllister, K.R. Morano, and A.B. Kinsolving (Filed as an Exhibit to the Company's 1996 Annual Report on Form 10-K and incorporated herein by reference) (c) Deferred Fee Plan for Directors, as amended through April 29,1998 C9-C14 (d) Director's Deferred Payment Plan, as amended through April 29, 1998. C15-C20 (e) Retirement Plan for Non-Employee Directors, as amended through January 28, 1998. Effective December 31, 1995, the Company terminated the plan for current and future directors. C2 ASARCO Incorporated EXHIBIT INDEX Exhibit Indexed No. Description on Page (f) Directors' Stock Award Plan, as amended through January 27, 1993 (Filed as an Exhibit to the Company's 1992 Annual Report on Form 10-K and incorporated herein by reference) (g) Stock Incentive Plan adopted by the Company's Shareholders on April 25, 1990, as last amended on November 29, 1995 (Filed as an Exhibit to the Company's 1995 Annual Report on Form 10-K and incorporated herin by reference) (h) Supplemental Pension Plan for Designated Mid-Career Officers, as amended through April 29, 1998 C21-C28 (i) Incentive Compensation Plan for Senior Officers, effective January 1, 1996 (Filed on Exhibit B to the Company's 1996 Proxy Statement filed on March 12, 1996 and incorporated herein by reference) (j) 1996 Stock Incentive Plan, effective April 24, 1996 (Filed as an Exhibit to the Company's Registration Statement on Form S-8 filed on December 17, 1996, and incorporated herein by reference) (k) Compensation Deferral Plan, as amended through April 29, 1998 C29-C35 (l) Supplemental Retirement Plan, as amended through April 29, 1998 C36-C41 (m) Consulting agreement between the Company and Mr. R. C42-C43 de J. Osborne dated November 24, 1998 11. Statement re Computation of Earnings Per Share C4 12. Statement re Computation of Ratios C5 21. Subsidiaries of the Registrant C6-C8 23. Consent of Independent Accountants is included on page A72 of this Annual Report on Form 10-K. 99. Report on Form 11-K relating to the Savings Plan for Salaried Employees of ASARCO Incorporated and Participating Subsidiaries. C44-C60 Copies of exhibits may be acquired upon written request to the Treasurer and the payment of processing and mailing costs. C3 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 11-K ------------------ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------ Commission File No. 1-164 ------------------ For the fiscal year ended December 31, 1998 Savings Plan of ASARCO Incorporated and Participating Subsidiaries ASARCO Incorporated 180 Maiden Lane New York, New York 10038 C44 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Financial Statements and Schedules December 31, 1998 and 1997 C45 Savings Plan of ASARCO Incorporated and Participating Subsidiaries INDEX Page Number Report of Independent Accountants C47 Statement of Net Assets Available for Benefits with Fund Information at December 31, 1998 C48 Statement of Net Assets Available for Benefits with Fund Information at December 31, 1997 C49 Statement of Changes in Net Assets Available for Benefits with Fund Information for the year ended December 31, 1998 C50 Notes to Financial Statements C51-C57 Supplemental Schedules: Form 5500 Item 27a*-Schedule of Assets Held for Investment Purposes at December 31, 1998 C58 Form 5500 Line 27d*-Schedule of Reportable Transactions for the year ended December 31, 1998 C59 Consent of Independent Accountants C60 * Refers to item number in Form 5500 ("Annual Return/Report of Employee Benefit Plan") filed with the Department of Labor for the plan year ended December 31, 1998. C46 REPORT OF INDEPENDENT ACCOUNTANTS ------------- To the Participants and Administrator of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries: In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries (the "Plan") at December 31, 1998 and 1997, and the changes in net assets available for benefits for the year ended December 31, 1998 in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules, as listed in the index on the preceding page, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers LLP New York, New York June 28, 1999 C47 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Net Assets Available for Benefits with Fund Information at December 31, 1998 (dollars in thousands)
Participant Directed ---------------------------------------------------------------------------------- Vanguard Vanguard Vanguard Vanguard Asarco Money Market Short Term U.S. Vanguard Index International Common Reserves Treasury Bond Wellington 500 Portfolio Fund Fund Portfolio Portfolio Fund ------------- ----------- ---------- --------- --------- ---- Investments, at fair value: .............. -- -- -- -- -- -- Asarco Common Stock (cost $26,211) ...... -- -- $ 3,208 -- -- -- Registered investment companies: ........ -- -- -- -- -- -- Vanguard Money Market Reserves Prime .. -- -- -- -- -- -- Portfolio (cost approximates market) . -- -- 20 $ 17,831 -- -- Vanguard Index Trust 500 Portfolio .... -- -- -- -- -- -- (cost $21,975) ....................... $ 44,654 -- -- -- -- -- Vanguard International Growth Fund .... -- -- -- -- -- -- (cost $215) .......................... -- $ 225 -- -- -- -- Vanguard Short Term U.S. Treasury ..... -- -- -- -- -- -- Bond Portfolio (cost $7,889) ......... -- -- -- -- $ 8,005 -- Vanguard Wellington Fund (cost $10,704) -- -- -- -- -- $ 12,373 Vanguard Index Extended Market Fund ... -- -- -- -- -- -- (cost $3,281) ........................ -- -- -- -- -- -- Vanguard U.S. Growth Fund (cost $5,385) -- -- -- -- -- -- Vanguard Windsor II Fund (cost $11,793) -- -- -- -- -- -- Vanguard Bond Index Fund (cost $2,457) -- -- -- -- -- -- Loans to Participants ................... -- -- -- -- -- -- -------- ------- -------- -------- -------- -------- Total Investments ................... 44,654 225 3,228 17,831 8,005 12,373 Contributions Receivable: ................ -- -- -- -- -- -- Participants ........................... 151 4 18 57 35 76 Company ................................ 1 -- -- -- -- 1 Interest receivable ...................... -- -- -- -- -- -- Loans receivable ......................... 43 -- 7 23 17 39 -------- ------- -------- -------- -------- ------- NET ASSETS AVAILABLE FOR PLAN BENEFITS ... $ 44,849 $ 229 $ 3,253 $ 17,911 $ 8,057 $ 12,489 ======== ======= ======== ======== ======== ========
Non- Participant Participant Directed Directed ------------------------------------------------------------- -------------- Vanguard Index Vanguard U.S. Vanguard Vanguard Asarco - Extended Growth Windsor II Bond Index Loan Common Market Fund Fund Fund Fund Fund Stock Fund Total ----------- ---- ---- ---- ---- ---------- ----- Investments, at fair value: .............. Asarco Common Stock (cost $26,211) ...... 12,334 $15,542 Registered investment companies: ........ Vanguard Money Market Reserves Prime .. - -- -- -- -- Portfolio (cost approximates market) . -- -- - -- -- 77 17,928 Vanguard Index Trust 500 Portfolio .... -- -- -- -- -- -- -- (cost $21,975) ....................... -- -- -- -- -- -- 44,654 Vanguard International Growth Fund .... -- -- -- -- -- -- -- (cost $215) .......................... -- -- -- -- -- -- 225 Vanguard Short Term U.S. Treasury ..... -- -- -- -- -- -- -- Bond Portfolio (cost $7,889) ......... -- -- -- -- -- -- 8,005 Vanguard Wellington Fund (cost $10,704) -- -- -- -- -- -- 12,373 Vanguard Index Extended Market Fund ... -- -- -- -- -- -- -- (cost $3,281) ........................ $ 3,994 -- -- -- -- -- 3,994 Vanguard U.S. Growth Fund (cost $5,385) -- $ 8,109 -- -- -- -- 8,109 Vanguard Windsor II Fund (cost $11,793) -- -- $ 14,911 -- -- -- 14,911 Vanguard Bond Index Fund (cost $2,457) -- -- -- $ 2,509 -- -- 2,509 Loans to Participants ................... -- -- -- -- $ 4,431 -- 4,431 -------- -------- -------- -------- -------- ------- ------- Total Investments ................... 3,994 8,109 14,911 2,509 4,431 12,411 132,681 Contributions Receivable: ................ -- -- -- -- -- -- -- Participants ........................... 28 52 87 8 -- -- 516 Company ................................ -- 1 1 -- -- 162 166 Interest receivable ...................... -- -- -- -- 27 -- 27 Loans receivable ......................... 6 10 41 1 (187) -- -- -------- -------- -------- -------- -------- ------- ------ NET ASSETS AVAILABLE FOR PLAN BENEFITS ... $ 4,028 $ 8,172 $ 15,040 $ 2,518 $ 4,271 $ 12,573 $133,390 ======== ======== ======== ======== ======== ======= ========
The accompanying notes are an integral part of these financial statements. C48
Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Net Assets Available for Benefits with Fund Information at December 31, 1997 (dollars in thousands) Participant Directed Directed ------------------------------------------------------------------------------- Vanguard Vanguard Vanguard Asarco Money Market Short Term Vanguard Index Common Reserves U.S. Treasury Vanguard Index 500 Portfolio Fund Portfolio Portfolio Fund Market Fund ----------- ---------- --------- --------- ---- ----------- Investments, at fair value: ..................... -- -- -- -- -- -- Asarco Common Stock (cost $25,211) .............. -- $ 3,260 -- -- -- -- Shares of registered investment ................. -- -- -- -- -- -- companies: ...................................... -- -- -- -- -- -- Vanguard Money Market Reserves Prime ......... -- -- -- -- -- -- Portfolio (cost approximates market) ........ -- 29 $ 17,869 -- -- -- Vanguard Index Trust 500 Portfolio ........... -- -- -- -- -- -- (cost $22,581) .............................. $ 39,654 -- -- -- -- -- Vanguard Short Term U.S. Treasury ............ -- -- -- -- -- -- Bond Portfolio (cost $7,452) ................ -- -- -- $ 7,476 -- -- Vanguard Wellington Fund (cost $9,952) ....... -- -- -- -- $ 12,282 -- Vanguard Index Extended Market Fund .......... -- -- -- -- -- -- (cost $3,113) ............................... -- -- -- -- -- $ 4,026 Vanguard U.S. Growth Fund (cost $3,971) ...... -- -- -- -- -- -- Vanguard Windsor II Fund (cost $10,560) ...... -- -- -- -- -- -- Vanguard Bond Index Fund (cost $1,661) ....... -- -- -- -- -- -- Loans to Participants ........................... _______ _______ ______ _____ ______ ______ Total Investments .......................... 39,654 3,289 17,869 7,476 12,282 4,026 Contributions Receivable: ....................... -- -- -- -- -- -- Participants .................................. 167 22 69 39 90 35 Company ....................................... -- -- -- -- -- -- Interest receivable ............................. -- -- -- -- -- -- Loans receivable ................................ 52 8 28 16 9 8 -------- -------- -------- -------- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS .......... $ 39,873 $ 3,319 $ 17,966 $ 7,531 $12,401 $ 4,069 ============================================================== ======== ======== ======== ======== ========
Non- Participant Participant Directed Directed Directed ------------------------------------------------------ -------------- Vanguard U.S. Vanguard Vanguard Asarco Growth Windsor II Bond Index Loan Common Fund Fund Fund Fund Stock Fund Total --- ---- ---- ---- ---------- ----- Investments, at fair value: ...................... -- -- -- -- -- Asarco Common Stock (cost $25,211) ............... -- -- -- -- $ 17,763 $ 21,023 Shares of registered investment .................. -- -- -- -- -- -- companies: ....................................... -- -- -- -- -- -- Vanguard Money Market Reserves Prime .......... -- -- -- -- -- -- Portfolio (cost approximates market) ......... -- -- -- -- 158 18,056 Vanguard Index Trust 500 Portfolio ............ -- -- -- -- -- -- (cost $22,581) ............................... -- -- -- -- -- 39,654 Vanguard Short Term U.S. Treasury ............. -- -- -- -- -- -- Bond Portfolio (cost $7,452) ................. -- -- -- -- -- 7,476 Vanguard Wellington Fund (cost $9,952) ........ -- -- -- -- -- 12,282 Vanguard Index Extended Market Fund ........... -- -- -- -- -- -- (cost $3,113) ................................ -- -- -- -- -- 4,026 Vanguard U.S. Growth Fund (cost $3,971) ....... $ 5,399 -- -- -- -- 5,399 Vanguard Windsor II Fund (cost $10,560) ....... -- $ 13,870 -- -- -- 13,870 Vanguard Bond Index Fund (cost $1,661) ........ -- -- $1,694 -- -- 1,694 Loans to Participants ............................ ______ $ ______ ______ $4,765 _______ 4,765 Total Investments ........................... 5,399 13,870 1,694 4,765 17,921 128,245 Contributions Receivable: ........................ -- -- -- -- -- -- Participants ................................... 48 101 5 -- -- 576 Company ........................................ -- -- -- -- 199 199 Interest receivable .............................. -- -- -- 31 -- 31 Loans receivable ................................. 16 33 1 (191) -- -- -------- --- -------- -------- ----- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS ........... $ 5,463 $ $ 14,004 $ 1,700 $4,605 $ 18,120 $129,051 ================================================== ======== === ======== ======== ===== ======== ========
The accompanying notes are an integral part of these financial statements. C49 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Statement of Changes in Net Assets Available for Benefits with Fund Information for the year ended December 31, 1998 (dollars in thousands)
Vanguar Vanguard Vanguard Vanguard Asarco Money Marke Short Term Vanguard Index Trust International Common Reserves Prime U.S. Treasury Wellington ADDITIONS: 500 Portfolio Growth Fund Stock Fund Portfolio Bond Portfolio Fund ------------- ----------- ---------- --------- -------------- ---- Investment Income Net appreciation (depreciation) in the -- -- -- -- -- -- fair value of investments .......... $ 10,020 $ 13 $ (7,161) -- $ 115 $ 40 Dividends and Interest ................ 723 4 695 $ 934 419 1,406 Interest (participant loans) .......... ______ ______ _______ _______ ___ _____ Total ............................... 10,743 17 (6,466) 934 534 1,446 Contributions ........................... -- -- -- -- -- -- Participants .......................... 2,130 54 258 809 447 1,073 Company ............................... 7 -- 2,354 2 -- 5 Loan Repayments ......................... 725 5 124 410 214 390 Transfers from other plan ............... 185 -- 63 24 8 -- Interfund transfers ..................... (2,254) 162 1,117 1,540 559 (792) TOTAL ADDITIONS .................... 11,536 238 (2,550) 3,719 1,762 2,122 DEDUCTIONS: Benefit payments ...................... 5,841 5 2,933 3,425 1,084 1,691 General and administrative ............ 1 -- -- 5 1 1 Loans ................................. 718 4 130 344 151 342 TOTAL DEDUCTIONS ................... 6,560 9 3,063 3,774 1,236 2,034 Net increase (decrease) ................. 4,976 229 (5,613) (55) 526 88 NET ASSETS AVAILABLE FOR PLAN BENEFITS, . -- -- -- -- -- BEGINNING OF YEAR .................... 39,873 0 21,439 17,966 7,531 12,401 NET ASSETS AVAILABLE FOR PLAN BENEFITS, . -- -- -- -- -- -- END OF YEAR .......................... $ 44,849 $ 229 $ 15,826 $ 17,911 $ 8,057 12,489
Vanguard Index Vanguard Vanguard Extended Vanguard U.S. Windsor II Bond Index Loan Market Fund Growth Fund Fund Fund Fund Total ----------- ---- ---- ---- ---- ----- Investment Income Net appreciation (depreciation) in the -- -- -- -- -- -- fair value of investments .......... $ (44) $ 1,724 $ 673 $ 28 -- $ 5,408 Dividends and Interest ................ 314 519 1,529 135 -- 6,678 Interest (participant loans) .......... ___ _____ _ _ __ $339 339 -- Total ............................... 270 2,243 2,202 163 339 12,425 Contributions ........................... -- -- -- -- -- -- Participants .......................... 426 639 1,273 116 -- 7,225 Company ............................... 1 4 6 -- -- 2,379 Loan Repayments ......................... 121 205 471 11 (2,488) 188 Transfers from other plan ............... 3 5 20 -- 33 341 Interfund transfers ..................... (369) 369 (1,066) 734 --------- --------- --------- --------- --------- ------- TOTAL ADDITIONS .................... 452 3,465 2,906 1,024 (2,116) 22,558 --------- --------- -------- -------- --------- --------- DEDUCTIONS: Benefit payments ...................... 431 631 1,575 194 399 18,209 General and administrative ............ 2 -- -- -- -- 10 Loans ................................. 60 125 295 12 (2,181) --------- --------- --------- --------- --------- ------- TOTAL DEDUCTIONS ................... 493 _ 756 1,870 206 (1,782) 18,219 --------- --------- - -------- --------- --------- --------- Net increase (decrease) ................. (41) 2,709 1,036 818 (334) 4,339 NET ASSETS AVAILABLE FOR PLAN BENEFITS, . -- -- -- -- -- -- BEGINNING OF YEAR .................... 4,069 5,463 14,004 1,700 4,605 129,051 --------- --------- --------- --------- --------- --------- NET ASSETS AVAILABLE FOR PLAN BENEFITS, . -- -- -- -- -- -- END OF YEAR .......................... $ 4,028 $ 8,172 $ 15,040 $ 2,518 $ 4,271 $ 133,390 ========= ========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements C50 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements 1. Plan Description The following description of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries (the "Plan") provides only general information. Reference should be made to the Plan document for a complete description of the Plan and Plan amendments, including eligibility requirements and vesting provisions. General: Effective January 1, 1980, ASARCO Incorporated (the "Company") established the Savings Plan of ASARCO Incorporated and Participating Subsidiaries, which has been amended thereafter. Contributions commenced in July 1980. The Plan is a defined contribution plan and is administered by the Company's Savings Plan Committee of the Board of Directors in accordance with authority delegated by the Fiduciary Committee. The Plan is designed to provide a method of savings by eligible employees for their retirement and other needs, and to enable them to acquire an ownership interest in the Company. Contributions: Employees are eligible for participation in the Plan after completing thirty days of service. Each eligible employee wishing to participate in the Plan must elect to authorize pre-tax and/or post-tax contributions by payroll deduction. Contributions are stated in whole percentages of 1% to 17% effective October 1,1998 of the participant's basic earnings, as defined. A participant may elect to increase, decrease or suspend the pre-tax or post-tax contributions on the first day of any month. The Internal Revenue Code of 1986 (the "Code"), as amended, limited the maximum amount an employee may contribute on a pre-tax basis to $10,000 and $9,500 in 1998 and 1997, respectively. Matching Company Contribution - The Company matches the first 6% of a participant's monthly contribution at the rate of 50%. The matching contribution may be made in either cash or Asarco Common Stock and in the case of cash, the Plan's trustee, Vanguard Fiduciary Trust Company ("Vanguard"), is required to purchase Asarco Common Stock. Company contributions for the year ended December 31, 1998 consisted of cash in the amount of $2,379,583. The Company is not obligated to make a contribution during any period in which it has no accumulated retained earnings. The Company's contributions are subject to all legal restrictions which may apply, including Sections 401 and 415 of the Code, which limit the annual contributions to an employee's account. C51 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Participants are 100% vested in both their contributions and the Company's matching contribution and earnings thereon upon participation in the Plan. Benefit Payments: Upon retirement or termination of employment (other than by death) prior to age 65, a participant must consent in writing to receive a distribution of account balances. If participants do not consent in writing, payment of a distribution is made upon the earlier of death or attainment of age 65. Participants who retire may elect to receive payments in annual cash installments over a period of up to 10 years. Participants receiving lump sum distributions may choose to receive cash equal to the value of their interest in all accounts or full shares of Asarco Common Stock equal to all or part of their interest in the Asarco Common Stock Fund plus cash equal to the remaining value of their interest in all Accounts. In the event of the death of a participant, his or her entire interest in the Plan will be paid to their designated beneficiary in either a single lump sum or annual cash installments not to exceed 10 years. Loans: The Plan provides for loans to participants who have participated in the Plan for at least one year, subject to certain limitations. The maximum loan allowed to each participant is limited to the lesser of 50% of the total value of the participant's accounts, or $50,000 reduced by the outstanding balance of any plan loans to such participant. A participant's loan is repayable within a maximum of five years or immediately upon termination of employment. Interest is currently accrued at the prime rate, which was in existence on the first day of the month in which the loan was issued. Loans are secured by a lien on the participant's interest in the Plan. Loan repayments are made through payroll withholdings from the participant's earnings. A participant may pre-pay a loan at any time without penalty. 2. Significant Plan Amendments On August 26,1998 the Plan was amended, effective October 1, 1998, to increase the maximum permissible contribution to 17% from 12% for salaried employees. On November 25, 1997 the Plan was amended, effective January 1, 1998 to change the eligibility waiting period from six months of service to the first day of any month following completion of 30 days of service; to permit employees to change contribution rates on a monthly, rather than quarterly, basis; to allow employees who have reached age 64 to transfer Company matching contributions from the Asarco Common Stock fund to other investment options under the Plan; to add the Vanguard International Growth Fund as an investment option; to permit express loans and automated withdrawals; and to increase, in accordance with the Taxpayer Relief Act of 1997, the account balance threshold for automatic cash-outs of terminating employees from $3,500 to $5,000. In addition, on July 30, 1997, the Plan was amended to recognize service by new hires with Southern Peru Copper Corporation for purposes of satisfying eligibility requirements, and to make other technical changes to comply with changes in law. C52 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued 3. Summary of Significant Accounting Policies Valuation of Investments: The Plan's investments are stated at fair value. Units of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The Asarco Common Stock Fund is valued at its year-end unit closing price (comprised of year-end market price plus uninvested cash position). Participant loans are valued at cost which approximates fair value. Basis of Accounting: The financial statements of the Plan are prepared under the accrual method of accounting. Investment Transactions and Investment Income: Transactions are accounted for on a trade-date basis. Average cost is the basis used in the determination of gains or losses on sales of securities. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income. Net appreciation (depreciation) in the fair value of the Plan's investments, as shown in the Statement of Changes in Net Assets Available for Benefits, consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. Contributions: The Company's matching contributions are measured by reference to the participant contributions and are not discretionary. Loans to Participants: Loans to participants are presented in the Statement of Net Assets Available for Plan Benefits as Plan assets. Benefit Payments: Benefit payments are recorded when paid. Plan Expenses: The Company pays all administrative expenses of the Plan including trust, recordkeeping, consulting, audit and legal fees, with the exception of loan administration fees which are charged to participants. Taxes, excluding transfer taxes on shares of Asarco Common Stock distributed to participants or their beneficiaries, and investment fees related to Vanguard Funds are paid from the net assets of such funds. C53 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Risks and Uncertainties: The Plan provides for investment options in various mutual funds. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the Statement of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits. Participants are advised to read a Vanguard prospectus or the Plan's summary plan description before investing in any fund. 4. Investment Funds Vanguard is the investment manager and participant recordkeeper for all investment funds of the Plan. Vanguard is also the trustee of all of the funds. Upon enrollment in the Plan throughout 1998, participants directed their elected contributions to be invested in one or more of the following funds in multiples of 5%: o Vanguard Index Trust 500 Portfolio - A fund invested in all of the stocks included in the Standard & Poor's 500 Composite Index (the "Index") in approximately the same proportions as they are represented in the Index. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 1,322 and 1,413, respectively. o Vanguard Money Market Reserves Prime Portfolio - A fund invested in a portfolio of high quality money market instruments with maturities of one year or less. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 897 and 1,055, respectively. o Vanguard Short Term U.S. Treasury Bond Portfolio - A fund invested primarily in short-term U.S. Treasury securities with an average maturity of two to three years. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 484 and 540, respectively. o Vanguard Wellington Fund - A fund invested in bonds and common stocks. The bonds are held for relative stability of income and principal, while the common stocks are held for potential growth of capital and income. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 849 and 903, respectively. C54 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued o Vanguard Index Extended Market Fund - A fund which provides investment results that correspond to the aggregate price and yield performance of the Wilshire 4500 Index. The Wilshire 4500 Index consists of over 4,500 U.S. common stocks (primarily medium and small capitalization stocks) that are not included in the Standard & Poor's 500 Composite Stock Price Index. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 435 and 470, respectively. o Vanguard U.S. Growth Fund - A fund invested primarily in a diversified portfolio of common stocks with above-average growth potential. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 589 and 555, respectively. o Vanguard Windsor II Fund - A fund invested in common stocks to provide capital appreciation and dividend income. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 954 and 1,014, respectively. o Asarco Common Stock Fund - A fund that invests exclusively in ASARCO Incorporated common stock with a small amount invested in the Vanguard Money Market Reserves Prime Portfolio to allow for timely responsiveness to Plan transactions. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 1,914 and 2,105, respectively. o Vanguard Bond Index Fund - A fund that holds a combination of securities which, taken together, are expected to perform similarly to the Lehman Brothers Aggregate Bond Index. At December 31, 1998 and 1997, the number of Plan participants who held an interest in this fund was 131 and 104, respectively. o Vanguard International Growth Fund - This fund invests in stocks of high quality, seasonal companies based outside the United States. It includes stocks with records of exceptional growth from more than 15 countries (including Japan, the United Kingdom, the Netherlands, Switzerland and Germany.) At December 31, 1998 and 1997, the number of plan participants who held an interest in this fund was 39 and 0 respectively. The Plan also maintains the following fund: o Loan Fund - A fund designed to facilitate the recordkeeping and other administrative functions relating to loans made to participants based on their account balances (See Note 1). These loans are recorded as receivables of the Plan. C55 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued Vanguard as recordkeeper maintains individual account records reflecting each participant's net interest in each fund of the Plan in which such participant invests. Participant's net interest in each fund of the Plan is represented by units of participation. The following schedule shows the number of units and the net asset value per unit in each fund:
December 31, 1998 December 31, 1997 ----------------- ----------------- Net Asset Net Asset Number of Value Number of Value Units Per Unit Units Per Unit Asarco Common Stock Fund* 2,782,722 $5.62 2,530,926 $8.38 Vanguard Index Trust 500 Portfolio* 391,870 $113.95 440,254 $90.07 Vanguard International Growth Fund 11,987 $18.77 N/A N/A Vanguard Money Market Reserves Prime Portfolio* 17,831,043 $1.00 17,869,282 $1.00 Vanguard Short Term U.S. Treasury Bond Portfolio* 771,936 $10.37 732,259 $10.21 Vanguard Wellington Fund* 421,577 $29.35 417,054 $29.45 Vanguard Windsor II Fund* 499,540 $29.85 484,616 $28.62 Vanguard U.S. Growth Fund** 216,296 $37.49 188,118 $28.70 Vanguard Index Extended Market Fund 130,441 $30.62 130,939 $30.75 Vanguard Bond Index Fund 244,273 $10.27 167,917 $10.09
* Represents 5% or more of net assets available for plan benefits as of December 31, 1998 and 1997 ** Represents 5% or more of net assets available for plan benefits as of December 31, 1998 C56 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Notes to Financial Statements - Continued 5. Tax Status The Plan, as amended through July 27, 1994, has received a favorable determination from the Internal Revenue Service ("IRS") that it is a qualified plan and trust under Section 401(a) of the Code and, thus, exempt from federal income taxes under provisions of Section 501(a) of the Code. The Plan has been amended since receiving the determination letter. However, the Plan's management believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. 6. Termination Priorities Although it has not expressed any intent to do so, the Company reserves the right to amend or discontinue the Plan by action of the Board at any time. In the event of termination or partial termination of the Plan or a complete discontinuance of matching Company contributions under the Plan, each affected participant shall be 100% vested in all amounts credited to their account at the date of such termination, partial termination, or complete discontinuance of matching Company contributions. 7. Related Party Transactions The Plan invests in shares of mutual funds managed by an affiliate of Vanguard. Vanguard acts as trustee for only those investments as defined by the Plan. Transactions in such investments qualify as party-in-interest transactions which are exempt from the prohibited transaction rules. C57 Savings Plan of ASARCO Incorporated and Participating Subsidiaries Form 5500 Item 27a Schedule of Assets Held for Investment Purposes at December 31, 1998
Cost or Market Identity of Issue or Borrower Book Value Value Vanguard Index Trust 500 Portfolio $21,974,805 $44,653,571 Asarco Common Stock Fund 26,211,253 15,638,899 Vanguard Money Market Reserves Prime Portfolio 17,831,043 17,831,043 Vanguard Short Term U.S. Treasury Bond Portfolio 7,888,679 8,004,979 Vanguard Wellington Fund 10,704,304 12,373,283 Vanguard Index Extended Market Fund 3,281,368 3,994,095 Vanguard U.S. Growth Fund 5,385,277 8,108,922 Vanguard Windsor II Fund 11,793,336 14,911,264 Vanguard Bond Index Fund 2,456,557 2,508,679 Vanguard International Growth Fund 214,874 225,002 Loan Fund Participants' Loans (interest rates range from 6% to 9%) - 4,431,542 ----------- ------------ TOTAL INVESTMENTS $107,741,496 $132,681,279 ============ ============
C58 Savings Plan of ASARCO Incorporated and Participating Subsidiaries
Form 5500 Line 27d Schedule of Reportable Transactions for the year ended December 31, 1998 Purchase Selling Basis of Net Description of Asset Price Price Asset Gain (Loss) Vanguard Index Trust 500 Portfolio $10,016,644 $15,036,962 $10,630,214 $4,406,748 Vanguard Money Market Reserves Prime Portfolio 11,997,908 12,036,147 12,036,147 - Vanguard Wellington Fund 3,651,906 3,600,870 2,900,566 700,304 Vanguard Windsor II 4,082,237 3,713,661 2,853,154 860,507 Asarco Common Stock Fund 8,067,993 6,476,632 7,060,825 (584,193)
C59 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements of ASARCO Incorporated on Form S-3 (File Nos. 33-45631, 33-55993 and 333-02359) and on Form S-8 (File Nos. 2-67732, 2-83782, 33-34606, 333-16875, 333-18083 and 333-46181) of our report dated June 28, 1999 on our audits of the Statements of Net Assets Available for Benefits of the Savings Plan of ASARCO Incorporated and Participating Subsidiaries as of December 31, 1998 and 1997, the Supplemental Schedules as of December 31, 1998 and for the year then ended and the Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 1998, which report is included in this Annual Report on Form 11-K. PricewaterhouseCoopers LLP New York, New York June 28, 1999 C60 -----END PRIVACY-ENHANCED MESSAGE-----