Document KJ5MBd22aoKamOzqJV3LXZwox

N11767 p-iYCOCOWW' Anaconda Copper Mining Company CAPITAL STOCK December 31, 1930 Authorized, 12.000,000 shares, $50 each........................$600,000,000 Issued, 8,866.380 shares, $50 each........................ 443.319,000 OFFICERS Chairman of the Board President .... Vice-President Vice-President Vice-President Secretary and Treasurer General Auditor Assistant Secretary Assistant Treasurer . JOHN' D. RYAN CORNELIUS F. KELLEY BENJAMIN B. THAYER JAMES R. HOBBINS ROBERT E. DWYER ALBERT H. MELIN JAMES DICKSON KENNETH B. FRAZER DAVID B. HENNESSY DIRECTORS Percy A. Rockefeller John D. Ryan Benjamin B. Thayer Cornelius F. Kelley Charles E. Mitchell Charles T. Fisher James R. Hobbins Andrew J. Miller John A. Coe OFFICES An a c o n d a, Mo n t an a 25 Br o ad w a y , Ne w Yo r k To the Shareholders of Anaconda Copper Mining Company: The world-wide depression in business that marked the closing quarter of 1929 and which continued throughout 1930, resulted in a decreased consumptive demand for the metals produced by your Company and the products manufactured therefrom. Continued overproduction of non-ferrous metaU throughout the world, particularly of copper, led to the accumulation of excess stocks and was followed by a decline in market prices that reduced to a narrow margin the difference between the cost of production and the amounts realized from the sale of metals and their products. The failure of the industry to readjust itself to the decreased demand until accumulated Stocks of metal and a market price below thp average: cost of production compelled drastic, curtailment of production, resulted in an;! unnecessarily demoralized market and aggravated 'the effect which the general recession of business of itself should have caused. Total stocks of copper which had increased 134,510 tons during 1929, of which approxi mately 97,000 tons were in the last two months of the year, were further augmented by an additional 157,972 tons during the first ten months of 1930. Stocks at the end of the year were 21,209 tons less than the peak of 624,256 tons reported October 31st. and since then have steadily declined, World production of copper, as reported by the American Bureau of Metal Statistics, amounted to 1,769,635 tons; a decrease of 17,2% from 1929. World consumption amounted to 1,632,872 tons or 81.6% of 1929, indicating a better sustained volume than the average of general business. The price trend of all metals was downward, copper selling at the lowest price since 1894, lead since 1922, zinc since 1901, and silver at the lowest price in recorded history. The price of copper, as reported by the Engineering and Mining Journal was 17.7756 from the beginning of the year to April 14th, declining thereafter to 9.2756 on October 23rd an4 closing the year at 10.2756, with average for the year 12.9826, or 5.1256 below 1929 average. The price of lead was maintained at 6.256 to February 26th, declining to 5.106 on November 10th, which price was maintained to December 31st, with year average of 5.5176, Zinc declined steadily from 5.456 to a low of 3.956 on October 21st, advancing 3 slightly to 4.1253 on December J 1st. with year average of 4.55<5e. The price of silver steadily declined from 46,8756 to 31.125e December 31st, with average for the year 38.1548 per ounce, or 14.839c less than 1929. Inventory Adjustment* In the conduct of the business of your Company, it is necessary to carry large quantities of metals and metal products through th? various stages of production, reduction, refining antj manufacture. This constitutes a fixed inventory which under normal conditions neces sarily remains in the business. Ip addition, there exists at times an inventory of unsold production and of metals purchased in the conduct of the custom smelting! and refining operations of the Company and for its manufacturing departments. To avoid a possible distortion of earnings due to the fluctuation of the market prices for!metals,;at the close of the: year when final inventories are taken, the Company adopted thd policy in 1926 of carrying its normal inventory requirements at fixed prices substantially lower than the prices which have prevailed over any business period, and as it is believed that these, prices are conservative under normal conditions, they have not been changed, except in the case of silver. The abnormally low prices of ail metals current at the end of the year were substantially lower than the cost of purchased metals which have been reduced to market. Unsold production has been priced at cost. A contingent reserve has also been created to provide for any obligation that may result from the liquidation of the Company's position in export sales of copper. To provide for these adjustments, a reserve of $3,693,133.20 has been charged to sur plus which will be utilized to the extent that may be necessary to cover losses which may occur in these items. Financial The gross sales and earnings of the Company in 1930 totalled $179,332,797.51 comparcd with $305,751,876.46 in 1929. The resulting income for the year after deducting ail operating expenses, all taxes and interest, was $27,034,955.98, from which there was deducted $8,251,987.76 to cover depreciation and obsolescence, leaving a net income of $18)782.968.22, of which $420,692.61 accrued to minority interests. mm Capital Expenditures Construction expenditure? during the year amounted to 18,425,628.88. distributed as follows; Butte Mines.............................................................................. $ 399.673.70 Reduction Works. Anaconda.................................................. 58.919.04 Reduction Works, Great Falls.................................. 169,832.50 The American Brass Company and subsidiaries.................. 2.442.740.51 Raritan Copper Works............................................................ 21.847.85 International Smelting Company.......................................... 67,590.85 International, bead Refining Company................................. 52.992.17 Andes': Copper Mining Cpmphny........................................ 1,911,627.47 Chile Copper Company,.,........................................................ 1,879,418.75 Greene Cananea Copper Company............................. ......... 1,179,,336.32 Miscellaneous............................................................................ 241.449.72 Copper Operations The production of metals of the Anaconda Company and its subsidiary companies from copper operations for the year 1930 was as follows; Anaconda Copper Mining Company....... .... Andes Copper Mining Company.................. .... Greene Cananea Copper Company.......... .... International Smelting Company................. Copper lb*. 197,233.143 94,045,494 179,191,243 42.424,773 134,517.010 Silver 02*. 5,569,147.05 130,632.90 279,728.93 1.612.270.99 Gold ox*. 21.209.005 6,629.045 7,941.411 49.577.007 Total..................................................... .... 647,411,665 7,591,779.87 85.356.468 Of the above, 146,425,362 pounds copper, 2,509,791.35 ounces silver, and 59,155,173 ounces gold were produced from custom ores and ores treated on toll. Zinc Operations The production of electrolytic zinc at the Anaconda and Great Falls plants during 1930 amounted to 226,555,255 pounds. In addition, metals in dross and residue produced amounted to 5,918,479 pounds zinc, 14,459,634 pounds lead, 1,871,386 pounds copper, 2,538,407,28 ounces silver, and 7,763.477 ounces gold. Of this amount 1,849,515 pounds copper, 341,605.64 ounces silver, and 160.324 ounces gold were treated through operations of the Copper Plant. 5 Lead Operation* The Lead Plant of the International Smelting Company, Tooele, Utah, produced from custom ores 107,860.12 J pounds lead. +.543,644.76 ounces silver, and 28.299.920 ounces gold. Miscellaneous Product* Miscellaneous.production consisted of: 94,355,034 feet, lumber. 37,060 tons. treble superphosphate and phosphoric acid. 9,693 " arsenic. 49,356,906 pounds, zinc oxide. 9,941,673 white lead. 988,204 cadmium. 485,780 nickel sulphate. 480,246 copper sulphate. Fabricating Plant* The output of manufactured products of the plants of The American Brass Company amounted to 436,265,637 pounds, and of the Anaconda Wire and Cable Company to 264,782,731 pounds, or a combined output of 701,048,368 pounds. Sile*ian-American Corporation The principal amount of outstanding bonds was reduced to $10,441,000 at December 31, 1930. The subsidiary Polish companies increased output of zinc and lead. The price of zinc was lower than in the previous year, declining to 3.656 per pound as compared with 1929 average of 5.396. London price of zinc at December 31, 1930, for spot and future, had de clined to equivalent of 36 per pound. Principal production for the year was as follows: There is attached hereto a Consolidated Balance Sheet showing the financial condition of the Company and its subsidiary companies at thedose of business December 31, 1930. together with an Income Statement for the year, certified to by .Messrs. Pogson. Peloubet & Company, Certified Public Accountants. JOHN D. RYAN. Chairman of the Board. CORNELIUS F. KELLEY. President. New York. N. Y.. May 4, 1931. ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1930 ASSETS Fix e d : Mines and Mining Claims; Coal Mines, Timber Lands. Phosphate Deposits, Water Rights and Lands for Metal Producing and Manufacturing Plants...........................................................!......... $295,406,465.71 Buildings and Machinery at Mines, Reduction Works. Refineries, Manufacturing Plants, Saw mills, Foundries, Waterworks, Steamships and Railroads,.............................................................. 262,568,801.88 Investments iij sundry companies.............................. 26,295,922.78 $584,271,190.57 De f e r r e d Ch a r g e s and discount on bonds. 11,651,301.94' Cu r r e n t : Supplies on hand, advances on Ores and Expenses prepaid..................................... Metals and Manufactured Products in process and on hand--at cost, less reserve........................ Accounts Receivable-........................... Marketable Securities-................................................ Cash.--............. $52,071,018.85 68,055,254.67 15,493,860.57 15,452,897.61 12,152,290.86 143,183,302.54 $739,105,794.85 We have examined into the affaire of Anaconda Copper Mining Company and of its Subsidiary Companies and have verified the Assets and Liabilities shown above and the relative Surplus and Income accounts. The Net Income is a/tar deducting all Development expenditure of the year. Depletion of Coal and Timber Lands and Depreciation of Plants and Equipment, We hereby certify that this Balance Sheet shows the financial condition at 31st December, 1930, of the companies as an aggregate whole and that the accompanying Surplus and Income accounts for the year ended that date are correct as stated. POGSON, PELOUBET & CO. New York and Butts, 5th April, 1931, Certified Public Accountants. i N11767.01 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1930 LIABILITIES, Ca p it a l St o c k of Anaconda Copper Mining CoAuthorized. 1:2,000.000 shares of $50.00 each Issued, 8,866,380shares.......................... .................... Ca p it al St o c k a n d Su r p l u s of Subsidiary Companies owned by Minority Interest........................................ $443,319,000.00 *.877,968,44 Bo n d s Ou t s t a n d in g : Chile Copper Co. Twenty Year 3% Gold Deben tures, due 1947...................................................... $35,000,000.00 Butte, Anaconda & Pacific Railway Co. First Mort gage 5% Sinking Fund Gold Bonds, due 1944.... 2,110,000.00 37,110,000.00 Re s er v e s : For Depreciation.......................................................... For Insurance, Renewals and Contingencies.............. $90,602,820.29 2.698.589.43 93,301,409.72 Cu r r e n t : Notes Payable....................................................... Taxes and Interest Accrued-................ ............. Accounts and Wages Payable............................. Dividend No. 110 payable I6th February, 1931 Su r pl u s ......................................................................... $47,500,000.00 4,486,968.71 12.523,687.03 5.543,860.00 70,054,515.74 87,442,900.95 $739,105,794.85 Nor*--'In order to comply with the Government Income Tex requirements for the purpose of computing depletion, addition*! valuations of the mining properties have been recorded upon the books of the companies: but, for the sake of uniformity, the result of those entries has been omitted from the current statements. 9 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Surplus Account--Year Ended 31st December, 1930 Surplus 31st December, 1929..... ...................................................... Add. Minority Interest: Balance 31st December, 1929...................................... Dess acquired during the year...................................... $642,470.77 183,391.43 S112.033,552.99 438,879.34 Net Income of the year 1930, per Income Account: Anaconda Copper Mining Company share. ,........ Minority Interest share................................................ $ 18,362,273.61 420,692.61 $112,492,432.33 18,782,968.22 Deduct, Dividends: By Subsidiary Companies on stock owned by Minority Interest at 3lst December, 1930_____ By Subsidiary Companies on stock acquired by Anaconda Copper Mining Company in 1930-- amount paid prior to acquisition......................... By Anaconda Copper Mining Company--Dividends Nos. 107, 108,109 and 110................................... $131,273,400.55 $322,608.00 44,487.07 34,314,425.89 34.881,520.96 $96,393,879.59 Less provision for inventory and cont..-.gency reserves................................... 8,693,133,20 Deduct, Minority Interest...................................... $87,700,746.39 257,843.44 Surplus 31st December, 1930, per Balance Sheet-- $87,442,900.93 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ended 31st December, 1930 Gross Sales and Earnings........................................... '................................... $179,332,797.51 Cost of Sales operating expenses, development, maintenance and repairs, administrative, selling and general expenses and all taxes................... 150.903,305.39 Operating income.............................................................................................. Other Income--interesc. dividends and miscellaneous income...................... $28.429.492.12 2.696.773.50 Deductions from Income: Amount charged off this year for depreciation and obsolescence.......................................................... Interest, including discount on bonds......................... $8,251,987.76 4,091,314.64 $31,126,270.62 12,343,302.40 Net Income, carried to Surplus Account.. $18,782,968.22 11