Document 1go1Xd86p8Ln0Z1bjkOYOpjma

{-^EXWBn^ 1975' VOL.1 MOODY'S. INDUSTRIAL MANUAL A-I ROBERT H. MESSNER, Publisher HENRY porreca, Ass't Publisher. ROBERT p. hanson. Editor-in-Ckief Editorial Board ROBERT W. BURKE KENNETH W. CLIEFORD BRIAN T. COFFEY RICHARD B. DAVIS ALFRED G. ELLINGHAM ALBERT C. ESOKAIT ERWIN W. KAUFMAN HOWARD C. KIEDAISCH JOSEPH B. LEICH JOSEPH J. NESTO FRANK R. PLATAROTE MICHAEL A. RABBIA u -a<3 tU a ad an UTI nvt Ui U7I UT as us as as at ai ill ill d` 2 2 2 MOODY'S INVESTORS SERVICE, INC. 99 CHURCH STREET, NEW YORK, N. Y. 10007 (212J 267-8600 SEE FOLLOWING PAGE FOR COMPLETE LIST OF OFFICES Copyright 1975 by MOODrS INVESTORS SERVICE, INC New York All rights referred. SC-ELEC-06151 MOODY1S INDUSTRIAL MANUAL 181 CERRO CORPORATION C46NTM-, STRUCTURE . LONG TERM DEBT. Itaue 1. Pronuwcry notes . ____ '' . . ' . -- 3. Codv, sub, debenture*_____________ Timet ' Amount Qwici Earned Bating E~ Outstanding I105.19S.OOO1 2,7X2,000 1974 3.651 1973 645 ----- ' &570.000J Intere*t DatM f. 1------------ Call Price 104*5 Price Range 1974 X97* !! ---------- ------------- CAPITAL STOCK Issue . 1, Common _______________________1___ Par Value 634318 Amount Earned per Sh. Outstanding 1974 1973 ES7.92S444shs. 0)52.01 ED6146 Diva, per Sh. Call 1974 1973 Price 51.05 60.75 Price Range *. 1974 1973 19).- mi 17)8- 12% [DBased on aver. aha. as reported by Co. on continuing operations. 1973 exclude* 64-08 earning. of discontinued operations and extra* ordinary Item of dr55JO. QiSold privately. - HISTORY In May. 1965. acquired 21.3% of J. C. 61456.000 and Co. received a 6500,000 dividend Trahan Drilling Contractor. Inc. (since merged from Atlantic prior to tale. Incorporated in Hew York. October 26, 1*16, a* Cerro de Paaco Copper Carp,; name changed to Cerro de Pasco Corp., May il, 1961; present name adopted Jan. 1. 1961. At formation acoulred entire outstanding stock of the Morococha Mining Co., 95% of the outstanding stock of the Cerro de Pasco Mining Co. and 95% of the stock of Cerro cte Pasco Railway Co. In 1917, the Cerro de Pasco Mining Co. and the Morococha Mining Co. were dissolved, the Cerro de Pasco Cop per Corp. succeeding to their mining proper ties and assuming their obligations. On Dec. 1. 1955, acquired assets and busi ness of Circle Wire St Cable Corp. for 520. 250.000 cash and assumption of certain lia bilities. On June 7, 1956 acquired all capital stock of Fairmont Aluminum Co. for 62,000 common hares. On Dec. 31. 1956, corporate structure of Cerro de Pasco enterprise was realigned to preserve and strengthen "Western Hemi sphere trade corporation" status under United States income tax laws with respect to earn ings derived from Peruvian operations. Cor into Nordon Corp. now operating under name In May 1974, Co. acquired 86.6% of the Texas International Petroleum Corp.), Inde outstanding shares of common stock of Gol- pendent gas and oil producer in eastern I conga Corp. and 734% of the outstanding Texas and southern Louisiana. shares of its preferred stock for 626.600.oOu In early 1966, formed Compania Industrial in cash, through a tender offer made by Co. del Centro S. A. to operate sulfuric acid which expired in May. 1974. plant and copper rod mill ad La Oroya, Peru. On Aug. 16. 1966. merged Circle Wire fit In Sept. 1974. acquired 100% Interest in Fetterolt Coal Group of companies located In Somerset County, Pa. for 634.000.000 cash. Cable Corp., subsidiary; operates as Cerro Also in 1974 ICX. subsidiary, acquired Wire fit Cable Co. Div. Southern Express Company and received In 1967, formed Cerro Mining Co. of Canada Ltd. to conduct mineral exploration and mine temporary authority from Bestway Freight Lines, Inc. ICC to operate development in Canada. On Sept. 22, 1970, acquired major asset* BUSINESS . of Leadership Housing Division of Great Corporation functions through four per Southwest Corp. for 69,000400 plus additional orating groups: mining, manufacturing, real - 62.000,000, paid in Jan. 1971, In accordance estate and trucking. . with terms of agreement. In Oct.. 1970, formed Asbestos Mines of Northern Greece Mining Societe Anonyme to test asbestos deposit in Greece (see below). In June. 1971, acquired approx, 82% of Stereo Tape Club of America. Gardena, CaL Operations were terminated on Dec. 29. 1972. Summary ef Operation* (in 5000); Net sales: 1974 1973 Manufacturing __ 6567.412 6417402 Real estate_______ 96,006 159449 Trucking _________ 73.466 58456 Mining ___________ 21,446 . " _ porations enjoying Western Hemisphere trade On Feb- 1, 1972, purchased 3,400,000 com. corporation status pay U. S- income taxes at shs. (approx. 65%) of Behring Corp. for Total ___ . 6758430 $636,607 Sa rate of 16 percentage points lower than normal corporate tax rate. On July 1, 1957, acquired assets and busi ness of Liewin-Mathes Co. (Del.] for 303318 shares; operates as part of Cerro Copper fir Brass Co. Div. (see below). On Mar. 25. 1959 acquired assets of Consoli dated Coppermine* Corp., including 93.4% of stock of Titan Metal Manufacturing Co. and 99.3% of stock of Rockbetto* Products Corp. in exchange for 201.333 common shares and 626.311.700 subordinated debenture 5 Us, due 1979 plus a cash adjustment of 650333. Lia bilities of Coppermines were assumed by company. Included in acquisition were about 623.000.000 cash and marketable securities, and certain other assets. Under plan of liquida tion of Coppermines, stockholders received for each share held 0.10726 share of Cerro de Pasco -common plus 514 of debentures and 60.02678 representing proportionate share of cash adjustment. On July 1. 1959. Titan Metal Manufacturing Co., subsidiary, was merged into company. On Aug. 1, 1959. company acquired asset* and business, subject to liabilities, of Rockbestos Products Corp., which was liquidate^: company operated this business under name "Rockbestos wire fit Cable Co. Division" until May 1. 1967 when it was combined with that of Cerro Wire fit Cable Co. Division (see be low). On May 31. 1960. company acquired control of Rio Blanco Copper Corp.. Ltd. (Va.) by exchange of 27,817 common shares for 654.460 shares (71.3%) of Rio Blanco and at Dec. 31. 1960. owned 96.7% of Rio Blanco stock. At same time, formed Compania Minera Andina, S. A. (Chile) (99.99% owned subsidiary of Rio) to serve as operating company for Chilean copper project. Also during 1960, formed Cerro Explora tion Co.. Inc. (Del.); Cerro Enterprises A. C. (Switzerland); Cerro Internationals. A. (Bel gium): and Cerro Gas fit Oil Corp. (Del.). - Cerro de Pasco Ry, Co. (N. J.), wholly- owned subsidiary, was dissolved Jan. 1. 1961, and its 116 mile railway properties in Peru were conveyed to Cerro de Pasco Corp., Inc. (Del.), company's principal operating sub sidiary in Peru. On Feb. 21. 1961, acquired assets and busi ness of United Pacific Aluminum Corp., Los Angeles, manufacturer of enameled aluminum sheet and coil, for 100.000 common shares. On June 7. 1961. acquired entire stock of viking Copper Tube Co., Cleveland, manu facturer of seamless copper tubing, for 120,000 snares. On Nov. 20. 1961, merged Rio Blanco Cop per Corp. Ltd., subsidiary and on Dec. 29 Viking Copper Tube Co. 63.939.000 In cash and 69.656.000 12% subordi nated notes. Cerro has a option to purchase 400.000 additional com. shs. of Behring at any time between May 31. 1974 and May 31. 1978 at 611.08 per sh. . On Sept L 1972, leadership Housing Sys tem*. Inc., a wholly owned subsidiary of company was combined with businesses of Behring Corp. then 65% owned by company. On Feb. 1, 1972, Cerro purchased 3.400.000 MANUFACTURING GROUP The operations of the Manufacturing Group are carried out through Cerro Copper Prod ucts Division, Cerro Meta] Product* Division, Cerro Wire and Cable Co. division. Cerro Communication Products Division, Cerrcsales and Golconda. . . Cerrocu produces and sells copper plumb ing tube and related items, industrial copper tube, and electrolytic copper cathode. Copper shares of common stock (approximately 65% tube is gold principally to plumbing, air con of outstanding shares) of Behring from prin ditioning, and refrigeration wholesaler* as cipal stockholder of Behring and acquired well as certain original equipment manu from same stockholder a non-transferable facturers. In addition, electrolytic - copper option which, as amended On July 28. 1972, cathodes are told to a variety of large copper provided for purchase of a maximum of 400400 additional share* any time from May fabricators and on commodity Cerrocu also distributes a line exchange. of plastic 31. 1974 through May 31, 1978; at an ag plumbing fittings as a distributor for another gregate price of 64.498,000 and granted op manufacturer. tionee right to sell such shares to Cerro any Cerromet produces and sella brass mttj time from May 15. 1976 through May 15. 1978. for an aggregate price of 52.412.000. Pursuant to terms of merger agreement, products, including brass and bronze rod, bar. shapes, wire, forgings, screw machine parts and die castings, as well as certain low Behring's name was changed to Leadership, and Leadership Issued to Cerro 4,000.000 melting alloys, principally to original equip ment manufacturers and metal distributors. shares of its series B preferred stock and 4583.717 shares of Behring common stock, Principal markets for products manufac tured by Cerromet are areas of housing, au of which one-fifth (916.744) of the shares of tomotive, Industrial process and control Leadership's Common Stock issued to Cerro equipment, and communication and electrical in merger were placed in escrow. Escrow equipment Industries. In addition, a small agreement provides that, if LHSI's earnings portion of Cerromet's total sales are sold (pre-tax) for year ended Dec. 31, 1972 were to distributors of brass rod products. ' leu than 54.000400, one-third of shares held Cerrowire produces and sells single and in escrow shall be returned to Leadership multi-conductor building wire and cable, for cancellation and that if such earnings for control, power and instrumentation cable, car ended Dec. 31, 1973 are less than 54.600.)0, remaining shares held in escrow shall aerospace and marine cable, copper wire rod, and electric metallic tubing and co-axial ca also be returned to Leadership for cancel ble. .................. lation. In event that LHSI's earnings for 1973 are equal to or greater than 66400400. bal ance of shares are to be released to Cerro. In event that earnings for either of 1972 or 1973 fall between respective levels, shares are to be cancelled or distributed out to Cerro on a proportionate basis. Shares subject to cancellation based on LHSI's 1972 earnings were returned from escrow to Leadership for cancellation because required earnings level was not achieved in 1972. As a result of merger, transaction described above and other transactions. Cerro owns 88.6% of Lea dership's outstanding voting stock, represent ed by 780413 shares (524%) of its series A preferred Stock (one-quarter vote per share), 4.000400 shares (100%) of its series B pre ferred Stock (one vote per share) and 7,978. 606 shares (84.1%) of its common stock (one vote per share) In 1973 Co. acquired remaining shs. of Lead ership Housing, Inc. and merged it into a wholly own subsidiary. Transaction in Cerrowire't products are sold through its own sales offices, manufacturer's representa tives, and distributors to (1) construction In dustry, (il) public utilities, and (1U) diversi fied manufacturers, including those in de-. fense, maritime, and aerospace industries. Co-axial cable is sold directly, and through- distributors, to CATV System Builders. - On Mar. 8, 1974, Co. purchased business and , assets of a small company in Anniston, Ala bama engaged In manufacture and sale, of ' passive electronic devices used as attach ments to co-axial cable installations in CATV industry. - . Cerrocom: In 1974 Cerro's CATV co-axial cable operation in Freehold. New Jersey was given divisional status and combined with the business of a small company in Amiston, Alabama which manufactures and sells pas sive devices for CATV. Co-axial cable and passive devices are sold directly and through distributors to CATV system builders. On May 1, 1964 acquired copper and brass volved payment of 65.50 a sh. for Leader Cerrosales: Conducts worldwide metal strip rolling mill at Stamford. Conn., in ship com. sh. Leadership had previously re trading activities. It hedges on The Com cluding inventories, for 66.2 million in cash: deemed its Series A Preferred stk. at 510 a modity Exchange. Inc., London Metal Ex- ' facility operated as port of Cerro Copper fit sh. Total cost of transaction was SI 1.118.000. change and foreign exchange markets. Cerro- Brass Co. Div. (see below) until facility On Oci. 6, 1972 acquired Illinois-Caliiornia sale- deals ir. nonferreus refined metals, con was closed on July 31. 1969. Express, Inc. (ICX). a motor freight carrier, centrates and ores, including copper, lead, Effective Jan. 1, 1965. company sold assets for 621.5 million in cash. zinc, silver bismuth. ' of Cerro Aluminum Co. Division, principally In Dee. 1972. Co. ordered termination of the Golconda is engaged in the manufacture aluminum sheet rolling mills' at Fairmont. businesses and liquidation of assets of the and- sale of valves, fittings, regulators and W. Va. and Los Angeles, Cal. Including 16.65% Stereo Tape Club of America. other controls for use in the following indus interest in Alroll. Inc., for 618.483.651 in cash In June 1573. Co. sold its 50% interest in tries: aerospace, aircraft, computers and re and discounted value of notes payable over Atlantic Cement Co. Inc. for 638400.000 re lated products, and commercial and indus ten years. The notes were subsequently sold for cash. ` sulting in a gain of 52.116.000. Co.'s equity in net earnings through date of sale was trial kitchen cafeteria and restaurant equip ment. Golconda's products are sold through 182 MOODY'S INDUSTRIAL MANUAL variety of method* Including both direct yean after completion, and In some projects lurgical coal beginning July 1, 1975. Cerro's ) calee and sales through distributors and deal under certain conditions may be extended to subsidiary- is required to deliver and the ers* REAL ESTATE GROUP Through its wholly-owned subsidiary. five years after completion of construction. Land Sale*: Leadership acquires large par cels of unimproved land for its own use buyers are obligated to accept 600.000 long tons (2.240 pounds avoirdupois! during first nine .months and one million long tons an Leadership Housing, Inc. ("Leadership') Co, Is engaged in residential real estate busi ness. Principal operations of Leadership in clude (1) development and construction of as well as for sale to other developers. In certain locations, it acquires smaller parcels of improved land. Leadership currently has an interest in nually thereafter until March 31, 1988. Price is considered to be comparable to the pre vailing market price for comparable quality coal sold under long-term contracts (con single family home communities, including four major venture* with Investors. First sidering the {act that unlike most other long condominium apartment complexes: (ii) sale, is a partnership arrangement on 1.600 acres term contracts for similar coal, the price development, construction and management in Palm Beach County, Fla. Leadership man Under the Coal Sales Agreement is firm for of rental apartment complexes: and (ill) sales ages, on behalf of partnership and for a the life of the contract!, and is subject to of Improved and unimproved land. fee. development and ultimate sales of this adjustment far increased or decreased costs " Single Family Housing: Leadership's single family housing divisions build single family houses and condominium units developed as dngle f-miiy detached houses, townhouses. ana low use condominiums buildings, lead ership's home* have from two to six bed rooms, are generally of wood frame or - ce ment block with stucco exterior, and have dry wall internal construction. Leadership's personnel locate land suitable for planned complexes based upon market analyses and research, and perform or super vise performance of engineering, rezoning, land planning and construction functions. Leadership acts as general contractor on all Its projects and all work in connection with construction of residences is performed by subcontractors. Leadership's single family residences are primarily sold by salesmen employed by Leadership and compensated on basis of salary and commissions, and to a lesser extent by outside brokers who are compensated ou a commission basis. Multi-Family Projects: Leadership con structs for resale multi-family projects us ually consisting of two and three story garden apartment complexes located on sites averaging 10 acres and manages projects for purchasers thereof. Projects typically are de signed In clusters of from 8 to 35 buildings, and contain an average of 275 units. Apart ment complexes, which are planned lor families and young adults with moderate Incomes. Include amenities such as land scaped open areas, private patios, recreation al clubhouses, swimming pools and other leisure time facilities. Substantially all of apartments completed thus far have been rented on a month-to-month basis, either with or without leases, in accordance with prevailing local practice. Most projects are subject to agreements of sale prior to commencement of construc tion. Under such agreements. Leadership bean economic risk of construction of. project and is obligated to complete con struction by a specified date. tract for 50% of profits. Second venture is with a group of private frusta, in City of Tamarac. Fla. Under terms of agreement, approx. <0% of property, zoned for 6.141 dwelling units, Is to be improved and sold under management of Leadership, with Leadership and trusts sharing equally in net profits. During Jan. 1, 1973 through Mar. 15, 1976. property zoned for 1.016 units was sold to third parties and property zoned for an additional 1,720 units and a small parcel zoned for commercial use were under contract for sale to third parties. With respect to another 40% of property, trusts are required to pay for certain im provements to property, and Leadership is required to repurchase portions of property zoned to permit an aggregate of 4,500 housing units to be built on repurchased property. Repurchase price is -to consist of cost to trusts, improvement costs, carrying charges and a premium equal to 2760 per unit for which property Is zoned. In addition. Lead ership has an option to repurchase additional portions of Improved property zoned to per mit approximately 2.700 units on same terms as apply to 4.500 unit tract. During Jan. 1, 1973 through Mar. 15.- 1974, Leadership re purchased property zoned lor 779 units for an aggregate amount of approx. 21,850.000. Golf courses will be constructed On balance of property. Water and Sewage Facilities: Leadership owns and operates a water and sewage treat ment complex within City of Tamarac, Fla. Properties serviced include, among others, those previously developed and under de velopment by Leadership. Operations are conducted under a 30-year non-exclusivefranchise granted by City, allowing it to service customers directly in consideration of payment by Leadership to City equal to 4% of gross sales made by Leadership. Leadership's water and sewage facilities are subject to regulation by Florida Public Service Commission and Florida State Board of Health. and to maintain in part existing profit mar gines. Fetteroif owns or leases approx. 21.425 acres of coal lands located In western Fa. Under terms of most of such deeds or leases Fetteroif has right to remove and take UUe to coal In certain specified seams In such coal lands but usually does not have title or the right to possession of surface of such lands. In addition. In most cases the right to remove other minerals or coal from other seams has been reserved to the grantor. In addition, Fetteroif owns or leases surface rights to approx. 690 acres of land on which are located or are to be located existing or proposed mine mouths and various struc tures, such as offices, storage and work sheds, and the coal preparation plant refer red to above. Management believes that ma terial deeds and leases held by Fetteroif are on terms sufficient lor their Intended uses. At present, all of Fetterolfs underground mines are operated - under contract by G.M.&W. Coal Co. In order to assure a con tinued operation by a qualified underground mining organization, an option has been negotiated to purchase G.W.&W. Coal Co. end its sister company. Delta Mining. Inc. ror a net price of 57.3 million. Coal preparation plant at Boswell. Fa. which is also the location of Fetterolfs executive and administrative offices, can at present process coal sufficient to produce about 1 million short tons of dean coal per year. This facility Is now in the process of being expanded to 1.4 million short tons a year at a cost of 21.2 million. Included In the work Is a provision for new stacking and reclaiming equipment to facilitate load ing of railroad coal can. Expanded coal pre paration plant is expected to be fully oper ational by end of 1975. Cam Spar Corp. Cerro, through a subsidiary, Cerro Spar Corp. ("Cerrospar"). is operator and manager of, and has a 70% interest is, a joint ven SPurchaser pays a cash down payment and Issues Leadership a purchase money note secured by a lien on property. Most notes are non-recourse and Leadership may look only to property In event of a default by purchaser. Leadership's lien on property is subordinate to liens of lenders who provide construction and permanent financing for srcetts. Pcoumrcmhaesnecedmosninecye nJoatne.s 1.re1la97t3inghavtoe TRUCKING GROUP . ' HUnoli-Callfomia Express, Inc., ("ICX") it a Class 1 common carrier of gen eral commodities subject to regulation by Interstate Commerce Commission and op erates over 18.000 route miles in 18 states, principally in west and middle west. Since nta acquisition in 1972. ICX has ex panded Its operating authority through ac quisition of operating authorities of a num ture which began construction of a fluorspar mine and milling operation in western Ken tucky in June 1972. Project was completed In mid-year 1974 at a cost to venture of 26.7 million. Mlne is expected to produce at an annual rate of 56.000 tons of add-grade fluorspar. Indicated and inferred ore reserves of mine are believed tuffident for a mine life of nine years baaed on the stated rate of pro ttlosipromatdcanaoyoehnotrerptPxhaeaieemdammttetrlwlruoriltoppretateealcesemaajtesweegrtphsrInyittttieocetsraielItdaaetyonytnn.npvinmsbutvq-vfsteeaatsllePruisuetoaridirecwbdn.arieyrsotevaoceroglyoiynlSmeaenpoyovncsenapougnyenpedeIodsculendplaridleyahcnaredmivaortcexalearsliesynyosbheoabtettsaro,ansapyrrdyaahtybt*rtbssmesgcens.aealLeuaecra.savreeiIoIretveogannernaSiflsanedcnvewtdsatoIirberlineptleioaradteerstafevarruhntnseubetsneiesnmsmctbnhilddsalgltoiatiiestut,plaiaomfdyisnnr'nIrmrrcaseuentgiaseLalnopecdty,dsaesrnddorffaeduhraaerogmtkleosephdncccteerbstsmeaedirreesnatieomigrpsroettsffuatniauitotoootratrhaagenenaarrrniritndnefdhxpndellh,,f eUamwUaieagSacOrrbanoenontrcpenhoneihiantngvtdnquporouiniin,teaaaoguesrettcotgrohtsteidWedeiseeaefveoddairdrartnatseitainuSwanlooarmabutrtinalah,anieyttaEhhbtuonhiobelnpaIxsoel,rtafIstpehcpuiCrsttaiMrlryefolraitvuieXsifrniun.scerboaIodsIdCiihcgNlstsarrtmieyIkhniaClonIeToiNbrgwn.uCxoctofCclotGehgsofouloceaihreir.vgiomncIcdidotscecnGihdohmdeotenaAmorrmeRi.sgrmustiodvIinaotOmocCIhpido1,nItncnkUaeCao9oifXedtHir,7nrsidPnCeo1Cc4eiIirseg9.s.tuhchiel,ltn7seeuateas4,eptvestdsneu.ooI*eo.tcsiglC1lovIltorn9uanCepmtiXm7siodbnoroo2oXoiejdipar,opnerfdrto,gaeenshc*cupIrnwcrAtteCeocaheitoeaertknottltriXonyosnsses-f Congress for changes in tax laws which, if enacted, could reduce marketability of such projects. Among other things, proposals would curtail tax benefit presently derived , Fettorwlf Coal and Canstructlon, Inc. owns and leases operating properties In Somerset County, Pa. containing coal reserves princi pally of metallurgical grade. Fetteroff* prin from accelerated depredation, interest paid cipal beddings contain coal reserves as fol on construction debt and other presently, lows: Assured, 37.040,000 short tons; Probable, deductible items and would also provide, more favorable tax treatment for income not Involving any tax shelter. 1,407.000 short owns or leases as to which no tons. In addition, Fetteroif parcels of coal bearing land definitive studies have been After completion of a project. Leadership manages apartment complex for purchaser for a percentage of groi* rentals of project. Leadership generally does not retain any aquity Interest in its projects. Management agreements, however, occasionally provide lor Leadership to participate In Income from operations after purchaser has received a specified return and for Leadership to share In excess cash In the event the project la financed or resold. To date, no significant amount of income from such participation* . been received by Leadership, all projects. Leadership has FfhrSl^tn* Sr*r-.*nTCllti'*1 p*rl?d either (I) made to determine assured and probable re serves. Low volatile metallurgical coal of type pro duced by Fetteroif Is a commodity sold both domestically and abroad. As noted below, a substantial proportion of Fetterolfs pro duction Is dedicated to a long-term Coal Sales Agreement with two foreign corpor ations. Remaining production la sold on the spot market. Such spot-priced coal la subject to wide price fluctuation. Demand for metallurgical coal is dependent upon the demand for steel and In particular demand for steel made from iron ore since steel can be produced from scrap without the use of metallurgical coaL duction. The two prindpal uses for fluor spar are In production of hydrofluoric add by chemical industry and as a flux in steel industry. Cerrospar expects to sell it* prod uct prlndpally to chemical Industry. Fluorspar business in U. S. receives com petition from both European and Mexican producers. However, Cerrospar'* prindpal competition la from Mexico due to the ship ping advantage over the European producers. Zldanl Asbestos Mine Project In northern Greece, pilot-processing tests were concluded on asbestos ore from the Zldanl asbestos deposit located near Kozanl. The 1974 test work succeeded In establishing specialized processing flow sheet particu larly well adopted to Zldanl ore. The result* of all work performed at the property to date, together with up-to-date construction and operating costa as well as a revised financial projection, were assembled and in corporated into a techno-economic study which is now under review in Greece. The mining lights to Zldanl asbestos de posit are held under long-term leaae by a 71.25% owned Greek subsidiary of Cerro. The remaining Interest is held by Hellenic In dustrial Development Bank S.A. ("ETBA"), an agency of Greek Government, which pro vided funds for the field work and related studies performed in 1974. Techno-economic study confirms feasibility of developing and constructing facilities with capacity to produce 100.000 metric tons of milled chryaotlle asbestos a year in com mercially usable fiber groups- Total new funds required. Including initial working capital but excluding approximately 22 mil lion expended on pre-construction expenses, were estimated in 1974 at 245.4 million. . As now conceived, Cerro would retain a 51% equity interest in Greek subsidiary and prolSrtSSTbSTaS!l?Lr* 5.r*Te <* return to purchaser or fill SfelWmuajfromtoe ti expenses and debt services rlit*wth*' k^ranteed, fixed rate StiL -Is tor a period at from two to three ttftpsP'U'Y-- , - . , ...... . A# of Oct. 1, 1974. Cerro's subsidiary, Fet teroif Coal And Construction. Inc., which owm 100% equity interest in Fetteroif. enter ed into a Coal Sales Agreement with two foreign corporations for the sale of metal remaining equity Interest would be held by several Greek corporations, including ETBA. and possibly another Investor. Zldanl prop erty la believed to be well situated for sup plying tba markets for asbestos fiber in MOODY'S INDUSTRIAL MANUAL 183 - juroMi North Athct and Mfddle Eut Ap CHILEAN OPERATIONS PROPERTIES proximately 80% of asbestos liber which On July 18. 1971'. Government of Chile na would be produced by Greek subsidiary tionalized major copper mining operations MANUFACTURING group Co.'s febrlcetlng snd manufacturing opera would be exported from Greece, and re In country. Including Companla Miner* An- tion* In the United State* ere carried on at mainder sold within Greece. A decision as to dine, S.A., a Chilean corporation C Andin*"), ten principal plants located In seven state* whether or not to proceed with this protect 70% owned by Co. with remaining 30% owned follows: is expected to be made In 1375 and will by Corporaeion, del Cobre, a Chilean Govern Location Ana (sq. ft.) depend upon a number of factor*, principal ment agency ("Codelco"). Andlna owned and Cerrocu ly availability of financing on acceptable operated the Rio Blanco copper mine which Seuget, m.______ 1_______________ 750.000 terms. came into commercial production in month Cleveland, Ohio__________________ 217,000 Investments; Co. owns partial Interests In several mining and manufacturing enter prises. Most Important of these is Southern Peru Copper Corp. (copper mining and smelt ing). 22.25% owned. In addition Co. owns 12.07% of Savage River Corp., Tasmania (iron ore mining and pelletizing), and has varying degrees ol ownership in a number of smaller Peruvian companies. Activities of these com panies are metal mining and milling and manufacture of steel castings, refractory brick, welding rod, explosives, metal alloys, snd electrical and telephone wire and cable. In which it was expropriated. Total investment of Co. la Andlna con sisted of approx. $14,700,000 of equity contri butions and $21,000,000 in loans (including Interest and miscellaneous Items). In addi tion. as of Dee. 31. 1974 Andlna owed Co. approx. $5.8 million In accrued Interest on such notes. As of Feb. 28, 1974, Government of Chile Issued decrees and Government and Co. signed agreements providing for compensa tion for expropriation of Andlna. Under these compensation arrangements, Co. received a caah payment of $3723,000 and Cerrowlre Maspeth, N. Y.___________________ Syosset. N. Y.__________ i_____ New Haven, Conn_______________ Mystic. Coon. __ -_________ Cerrocom Freehold. N. J.___________________ Cerromet Beliefonto. Pa._______________ Newark, Cal._________________ Golconda . Chicago, HL__________________ 828.000 374.000 235,000 71,000 130,000 845,000 91,000 503.000 REAL ESTATE GROUP The major landholdings ol Leadership, oth Southern Peru Copper Corporation-. South $38,833,794 In 17-year serial notes bearing in er than those presently under development ern Peru holds concessions covering two terest at 9.165 percent, free of Pi"--n taxes. with the joint venture*, consist of 531 acres mines, Toquepala, in operstion, snd Cuajone, Thete notes are guaranteed by Central Bank in Broward County, Fla.; 3,900 acres in Tar Sunder development, both located Inland from southern port city of Ilo, Peru. In 1974, Southern Peru repotted sales of 87.900,000 and net earnings of $40,500,000; 1973, sales reported were $215,7-14,000 and net earnings were 561,323,000. All of these sales and earnings were derived from oper ations at Toquepala. , Co. ha* the right and obligation to pur chase a portion of Southern Peru's blitter of Chile. In addition, Co. has right to sell certain copper bearing material* produced in Chile, which cannot be processed Is Chile and which are outside normal r-hn.n production and export*. Under this arrangement aa Co. sells these materials, proceeds are to be ap plied to prepayment of notes, in inverse order of maturity. Co. shall have the right to m+-ii* of this type until full amount of notes has been paid. Co.'s sale ol material pon Lake, Fla.: 530 acres In Orange County. Cal; and an aggregate of 136 acres on Maui and Kauai, Hawaii. . ., - - TRUCKING GROUP ' At Dec. 31,1974. the Trucking Group owned 19 terminals and leased an additional IT other terminals. .. Note: For additional details on properties see `Business'* above, copper produced from ore mined at Toque is for sole purpose of accelerating payment MANAGEMENT pala under term* of an agreement among of indebtedness, and Co. will not derive addi Co.. Southern Peru and an agency of Peru tional revenues from such sales. vian Government. Purchase price la at aver Through Mar. 31, 1975, Co. had collected age of Atlantic Seaboard quotations. $5.8 million In prepayment* and $5.4 million Co. Imports about 170,000 short tons a year in payment of regular maturities. The most of blister copper from Southern Peru which remote maturity outstanding la now Mar. 1, Is delivered to Cerrocu for further treat 1964 ment On July 16. 1974, Co. entered into a Guar Cuajone deposit, located IS air miles north east of Toquepala, is estimated at 470 million anty Agreement with Overseas Private In vestment Corporation whereby the latter at tons of ore containing about 1% copper and Dec. 31. 1974 guaranteed llil.O million of notes is being developed -under a contract made in with interest at 778%. The guaranty la re 1989 with Peruvian Government duced as each of the notes 4s paid. . Officers .. J. A. Prltzker. Chairman R. A. Prltzker. President A. Wotfley. Exec. Vice-President ' R. C. Gluth. Vice-Pres. K. D. Archer, Vice-Pre*., Sec. 4 General Counsel P. J. Bennett, Vice-Pre*. 8c Coatr. ' H. w, Higgs, Vice-Pre*.--Mining Group P. D, Weiste, Vlce-Pres.--Manufacturing Group M. D. David, Vice-President - M. Samuels, Trees. - -- - ' Total cost of the project is estimated to be In excess of $550 million. DISCONTINUED OPERATIONS Cerro de Pasco Corporation: The Govern Savage Riven Through It* 24% stockhold ment of Peru expropriated Cerro's wholly- ing In Northwest Iron Co., Ltd., Co. holds owned subsidiary, Cerro de Pasco Corp. so approx. 12% Interest in Savage River which resulted In a financial statement loss iron mining snd pelletizing joint venture in after compensation but before tax benefit of Directers ' R. H. Cutler, Colorado T.F. Cithern, New York L. B. Harder, New York C. B. Harding. New York W. L. Henry, New York -. ' ... ... . ,t . .... Tasmania. Australia. Owner* of Northwest $110750.000 in 1973. The tax lots on the ex A. M. Massie, New York ' " .,. include Pickand* Mather 8c Co., as operator propriation alter adjusting the financial G. W. Pepper, Philadelphia and 48% owner, and a number of Australian statement loss primarily for non-tax deduct investors, primarily institutional. Co. and ible pensions and severance reserves WSJ J. A. Prltzker, Chicago ............... R. A. Prltzker, Chicago - '' ` Plckands Mather 8c Co. agreed to advance suf approx. $135,000,000. On Feb. 19, 1974, baaed J. B. Stone. Hamilton, Bermuda ' ~ - -: - ficient funds to maintain Northwest's work on an agreement between the Governments A. Wolfley, New York " ing capital at a level of $580,000 until certain of Peru and the U. S,, Co. received $58,000,000, of its outatg. Indebtedness, totaling approx. including repatriation of 1973`s net earnings Cessteb Alexander & Green, New York. - - $31 million have been repaid; such repay from Peru. The net after tax loss from ex ment is scheduled for 1983. Pursuant to such propriation, reflected as en extraordinary Auditors: price Waterhouse 8k Co. --------- ; obligation. Co. advanced to Northwest 5247, item in the accompanying 1973 financial Annual Meeting Second Tuesday In Bley. 000 in 1971 but no advances were required In statements, is $45,550,000 or $570 a share. In 1972-74. Co.'s share of owner*' contingent lia Dec. 1974, Cerro received a final payment of He. of St*ckh*id*rs: Dec. 31. 1974, 1979$. bility under these arrangement* amounted $10,000,000 with Interest of $538,000 from funds to approx. $73 million at Dec. 31, 1974 as paid by Peru to the U. S. Government a* part He. *f Cmplsyeest Jan. 1.1975, 8.579. . compared to approx. $8.8 million at Dec. 3d, of a lump sum settlement agreed by the U. S. General Office; 39 South LaSalle St, Chi 1973. end Peru. cago. IIL 60603. . - - STATISTICS Copper (lbs.)__________________ Lead (lbs.) Silver (ozs.) __________________ Gold (ozs.). ____________________ Refined zinc (lbs.) Zinc in concentrates (lbs.)___ COMPARATIVE PRODUCTION STATISTICS, YEARS ENDED DEC. 31 1974 N.A. 1973 128755.000 183.863.000 1972 114.258.000 188310.000 1971 98.237.000 149.938.000 1970 105.318.000 158.648.000 19724,000 40,000 147.919.000 231.458.000 22,991.000 42,000 148349.000 230.730.000 19.191.000 31,000 128330.000 178718700 20723.000 38,000 151.859.000 135.650.000 1909 '' 105.732.000 170.948.000 18,532,000 52,000 137.479.000 183.955.000 1968 117708.000 190761.000 >0771,000 ' 43.180 145728.000 177770700 INCOME ACCOUNTS Net sales_____________ Other revenue (net) COMPARATIVE CONSOLIDATED INCOME ACCOUNTS YEARS ENDED DEC 31 (Taken from reporta to SecuMtlea ml Exchange Commission) 1974 $738,330,000 23.571.000 1973 $696,607,000 21388.000 1972 $428,021,000 14717,000 1971 $328,089,000 18.788,000 1970 1989 ' $322,149,000 $298534.000 14,776.000 - K143,000-* - Total operating revenue_________--_____________ Cost of products sold ______________<________________ reselling and adm. expense*__ __________ __________ Interest cost accrued _____________________ ________ Lest: Interest capitalized_____ ___ __________....__' Interest net Depreciation and amortization 781.901.000 861.886.000 . 57306.000 23.301.000 crS.481.000 14740.000 . 8.092.000 657.976.000 549.832.000 58.933.000 17598.000 cr5.962.000 11.834.000 6,722,000 442.838.000 $73377.000 98364.000 13.336.000 Cr3.S5S.000 9.778.000 4745.000 342.875.000 300.713.000 32.477.000 8.427.000 CT2.490.000 5.937.000 3.079.000 336.925.000 218,861,000 803.996.000 : 267374,000, ` 20787.000 18.107.000 - 5729.0001 3,003,000 CTl,086,000/ 4343.000 - J.003,000 r 3710.000 . 3751.000 _ z Earnings from continuing oper. bcf. taxes__ _______ ....__ ____________ ,,______ Income taxes Earning* from continuing operations__ ____________ Earning* from discontinued opera tions 39377.000 23350.000 15727,000 30.784.000 15776.000 15778,000 33.793,000 18,574,000 7512.000 9.062,000 10726.000 69.000 CT2310.000 2779,000 353,000 3,969,000 . . 26,640,000 -V-.V: crTse.OOO 1,437,000 4,745,000. LJ.. .23703700 12321.000 - 20,712,000 *,.: Earning* before extraordinary Item*_______________ mExtraordinary items 15,907,000 49,101,000 dr4550.000 19.683,000 dn.924,000 2.632,000 *-968,000 15.986,000 *2,888,000 .43715,000-1'.- Net income to ret. earn._______ Retained earnings, beg. of year .. Other surplus credit*_____________ Dividends on capital stock_______ mother dehits ____________________ 15,927,000 154323,000 8315,000 3.811.000 . 17.784.000 103,939,000 90,750.000 52359,000 ' 503,000 8.186.000 8,078,000 1.644,000 103,179,009 6.770,000 " 7.303,000 . 14.080,000 . 112,591.000 43,915,000 92,721,000 ' 12.965.000 . 12349,000 -" 10527.000 ' 11354.000 . . Retained earnings, Dec. 31 $181735,000 .$154303,000 $103,939,000 $90,750700 $103379,000 - $112791700 -V