Document g2kkE4K6wNZOxabGE8Ky6raRe

PNYC 00010182 An a c o n d a Co p p e r Min in g Co mp a n y Aw s c o x p A An a c o n d a Wir e a n d Ca b l e Co mp a n y AN0E8SCN N.0 ''Aui v On T -.a j '^GS-ON-h u DSCN. N. (. LOCATION Of MANUFACTURING PLANTS \AA8!ON -n o . MUSKEGON. v iCK- Automotive Avfbrion 8uilding Eleetjricol Apparatus Eleetjricol Appliance Electrical Contracting SOME OF THE INDUSTRIES SERVED Electrical Equipment Industrial Power Plants Metal Fabricating Morin* Mining Petroleum Radio Railroad Steam Electric Refrigeration Shipbuilding 0a n Gc . Ca l f 9AvVT!-.Cc ET * S^CamCRE l l . Textile Telephone and Telegraph Transmission Equipment Utilities Power Companies Municipal Plants Rural Electrification Bare Wire and Cable Cable! Accessories Conduit Copper Rods Cordsj PRODUCTS ELECTRICAL WIRE AND CABLES OF EVERY DESCRIPTION Hollow Conductor Coble Ignition Cables Magnet Wire ond Coils Power Cable: Lead, Rubber, Paper, V.C. Parkway Cable Rubber Covered Building Wires Slow Burning Wires and Cables Varnished Cambric Wires and Cables Weatherproof Wires and Cables This Company is now engaged 100% on the. War Pro gram. Special types of electrical wires and cables are being made <n large quantities For aircraft, ships and motorized equipment. Wires ond cables are likewise produced in large volume for signal and communication systems, and for the electrification of the country's rapidly expanding wot industries. For years, the research program of the company has been concerned with increasing the durability, carrying capacity and dependability of electricol wires and cables. Todoy the benefits of this program ore going into military production. When the war is over, the company will have a valuable backlog of product development and research to place ot the disposal of m customers who are likewise new principally engaged on the War Program. Atlantja, do. Boston] Mass. Charlotte, N. C. Cincinnati, Ohio Cleveland, Ohio Dallas] Texas OFFICES A8 LOCATED IN THE FOLLOWING CITIES: Denver, Colo. Des Moines, Iowa Detroit, Mien. Kansas City, Mo. Los Angeles, Calif. Milwaukee, Wis. Minneapolis, Minn. New Orleans, La. Philadelphia, Pa. Pittsburgh, Pa. General Offices: 25 Broadway, New York Chicogo Sales Offices: 20 North Wocker Drive Rochester, N. Y. St. Louis, Mo. Sen Francisco, Calif. Seattle, Wash. ' Washington, D. C. PNYC 00010183 An a c o n d a Co p p e r Min in g Co mp a n y An w h d A Th e Ame r ic a n Br a s s Co mp a n y General Offte#*: Wot*rbury, Connecticut LOCATION OF MANUFACTURING PLANTS a N$ONia CCn n 3uFfAi.O N y DET9p.tr mic k CENOSHA *>$ tOMiNGTON. COn n wArESSUfiv CONN ANACONDA AMERICAN 0RASS tiMlfED NgW TQCOWt O ONfA9iO. CANADA Air-Conditioning Automotive Aviation Building SOME OF THE INDUSTRIES SERVED Chemical Electrical Equipment Hordwor# Heating Jewelry Light and Pow*r Machinery Mining Petroleum Plumbing Pulp and Paper Railroad Refrigeration Shipbuilding Textile Welding PRINCIPAL PRODUCTS COPPER, BRASS, BRONZE AND NICKEL SILVER-SHEETS, WIRE, RODS, TUBES A irplbn* Go*, Oil and Pressure Lints Ammunition Metal Brass and Copper Pip* Brojmg Solder Bronte Screen Wire Bus Bars and Shop** Coming* Discs end Cups Cond^n>*< H*ad Plot** Cond*ns*r and Heater Tubs Copper-Nickel Alloys Copper Tub*s and Fittings Drawn Sections Evetdur ond Super-Nickel Tank Plot** xtrvd*d Shapes Eyelet*, Grommets, *tc. Flexible Mtal Ho** ond Tubing Fr** Cutting Brass Rods Phosphor Bronte Pressure Di* Costings Hot Pr****d Parts Shell Rotating Bands Tobin Bronte Shafting Turbin* Blading Wtiding Rods As anticipated a year ago, our country's war n**ds lor coppe ond copper alloys during 1942 developed into a major challenge to the industry. Long before Pearl Horjbelr,. however, Th* American Brass Company mode extensive instoilationi of equipment for the casting, roll* ing,: blanking and drawing of its products. By means of its increased facilities, complemented by long previous experience in manufacturing materials used in ammuni tion, rljie Company was enabled to meet the challenge andlprjoduce it* Ml shore of these metals. AH plants of The Americas Brow Company achieved production records during the year. Their entire output was eonfried to direct or indirect wartime requirement* of our country ond its allies. By far, the largest require ment wa*. brass strip, discs and cups for cartridge coses for sroill arms and artillery ammunition, also gilding metal strip and cups for bullet jackets, as well os copper and copper alloy projectile rotating bands. In addition to producing hundreds of millions of pounds of these ma terials, large quantities of metals, were furnished for th* rapidly expanding shipbuilding program, construction of engines and parts used in aircraft, tanks and other mo torised equipment, radio end other communication*, chemicol plant equipment, and for electrical installations required by expanding war industries. The Company's Engineering and Technical Depart ment* cooperated with manufacturer*, helping them to increase production of war materials through efficient use of copper and its alloys. Looking to the future when w* can ogam supply the trade with th* well-known "Anaconda" peacetime products, research concerned with , alloy developments, new uses and improved production technique, is being carried on without interruption. OFFICES ARE LOCATED in THE FOLLOWING GTlES: Montreal, Canada N*work, N. j. New York, N. Y. Philadelphia, Pa. Pittsburgh, Pa. Providence, R. I. Rochester, N. Y. St. Louis, Mo. San Francisco, Calif. Seattle, Wash. Syracuse, N. Y. Toronto, Canada Washington, D. C. 1 An a c o n d a Co p p e r Min in g Co mp a n y CAPITAL STOCK December 31. 1942 Authorized, 12,000,000 shares, $50 each Issued, 8,919j086 shares, $50 each $600,000,000 445,951,300 OFFICERS Chairman, of the Board............................................................ Co r n el iu s F. Ke l l e t President........................................................................... James R. Ho bbin s Executive Vice-President.................................................... Ro ber t E. .Dw y er Vice-President................................................................... Da n ie l M. Ke l l y Vice-President in Charge of Mining Operations . Cl y d e E. Weed Vice-President in Charge of Metallurgical Operations . Fr e d e r ic k La is t Assistant to the President.............................. El b er t O. So w e r w in e Secretary and Treasurer . Ja mes Dic k s o n Comptroller .....................................................W. Ken n et h Dal y , Assistant Secretary and Assistant Treasurer Ke n n e t h B. Fr a z e r Assistant Secretary and Assistant Treasurer Th o ma3 E. Co n r ad ! AlsjiXafti Secretary............................................................ Jer emiah D, Mu r ph y DIRECTORS Jo h n A. Co e Ro b er t E. Dw t e r E. Ro l a n d Ha r h u ia n Ja me s R. Ho b b in s Co r n e l iu s F. Ke l l e t Ma u r ic e Ne w t o n Wil l iam C, Po t t e r Go r d o n S. Re n t s c h l e r Wil l ia m D, Th o r n t o n OFFICES An ac o n d a, Mo n t an a Bu t t e, Mo n t a n a iS Br o ad w a y , Ne w Yo b k An n u a l Re p o r t of An a c o n d a Co p p e r Min in g Co mp a n y For She Year Ended December jr, rgjj To the Shareholders oj Anaconda Copper Mining Company: Du r in g the year 1942, the Company discharged the balance of its outstanding funded indebtedness, which, as of December 31, 1941, amounted to 820,935,000, In review, it may be stated that the funded debt and bank loans of the consolidated companies as of June 30, 1933. aggregated the sum of $109,372,000. A consistent policy of debt reduction had been followed during the intervening eight and one-half years, resulting in net payments of $88,437,000 to December 31, 1941. As of December 31,1942, ail indebtedness of the Company and its subsidiaries other than current liabilities consisting principally of accounts and wages payable and accrued taxes, had been paid. Current assets totaled $182,112,172.14 including $86,730,886.90 of cash and Government securities, and current liabilities amounted to $61,942,445.13 (of which $46,581,087.53 represented taxes accrued and reserve for renegotiation of war contracts), leaving a net current position of $120,169,727.01. During the last six months of 1933, indebtedness was reduced $5,011,000.00 to $104,361,000.00 on December 31, 1933, as of which date net current assets (exclusive of Notes Payable and $1,800,000.00 Acceptances Payable which were included in Accounts and Wages Payable) amounted to $84,414,077.12, During the last nine years the financial condition of the Company and its consolidated subsidiaries, through increase in net current position and discharge of indebtedness, was improved by $140,116,649.89, or $16.15 per share, after payment of $101,923,471.50 in dividends. 3 FINANCIAL Tie gross sales and earnings of the Company upon a consolidated basis ''after elimination of inter-companv items') totalled 3408,952,656.93, an increase of $54,1*8,740.24 or 15.3f compared with the prior year. Other income, including dividends from aon-coasoiidated Subsidiaries, was $1,252.538.20, making total gross income. $410,205,2to. 13 The cost of sales, including all operating expenses, develop ment and maintenance charges,, repairs, administrative, selling and genera! expenses .add, all taxes, except income taxes, amounted to. . ,.. ...... i...; .. . $319,070,573.1^; . Provision for depreciation and obsolescence and for depletion of coal mines, timber lands, and phosphate deposits amoitjnteidtb-.......... ............................. Il'^ISl,I0&04: Interest on debentures and Serial notes, including discount iPd expense and premium on debentures retired , was. ..a ...... ...... ............ 1198,378.05, making1total deductions from gross income of.................... 332,420,057.28 * 77,785.157.85 United States and foreign income and excess profits taxes, amounted to......................................... $37,000,325.85; Provision for contingencies was................. $ 4,000,000.00, makings total of................................................................. 41,000,325.85 Net income, without deduction for depletion of metal mines. was......................................................................... ......... $ 38,784,832.00 Of which minority share amounted to..................................... 320,801.74 Leaving consolidated net income of........................................ $ 36,464,030.28 Following the regular accounting practice of the Company, the net income reflects sales of metals and manufactured products invoiced to customers. Forward sales contracts ape not reflected in the income account. Inventory valuations were below market prices for the various metals and products at December SI, 1942. GOVERNMENT BONDS During the year 1942 the Company and its subsidiaries purchased a total of $39,244,000 (par value plus interest accrued) United States Government securities. The Company had on hand at the beginning of the year United States Treasury Notes in the amount of $14,016,800, making a total of $53,260,800. Of this amount $20,051,760 matured or was applied to the purchase of other Government securities or to the payment of Federal income taxes leaving $33,209,040 on hand at the end of the year. In addition the Company's Canadian subsidiary held $1,730,375 in Canadian bonds. 4 Capital Expenditures less sales of capital assets in 1942 amounted to $9,176,39!),38 as follows: Mines,Mining Claims and Lands................................................. Buildings. Machinery and Equipment at the Mines, Smelting, Refining and Manufacturing Plants of the Company and its subsidiaries . .................. g 317,133*0 8,367.397.67 88,884.053.37 Less Sales of Timber Lands and Other Assets not required in Company's Operations.............. 1.025,166.67 A net increase of.................. Miscellaneous---Including acquisition of shares of stock of subsidiary companies.................................................................. $7,859,386.70 $1,317,012.68 Plant improvements and extensions were general throughout the Company's operations, The more important items were:--new hoists, bead frames and other equipment at the Leonard and Travona Mines in Butte and improvements in the air conditioning and ventilation for underground work. ,At Anaconda, the capacity of the copper concentrator was increased -20% and an entirely new converter plant was erected. The capacity of the electrolytic zinc plants at Anaconda and Great Falls was increased 25%. The fabricating facilities of The American Brass Company were enlarged to produce more metal for war work, and the production of gilding metal was transferred from those plants to the copper refineries at Great Falls, Montana and Perth Ambov, New Jersey. Progress w-as also made in extending the facilities at Chuquicamata, Chile, for increased production of copper. Dividends declared and paid during the year on the capital stock of your Company amounted to $21,685,845,00 or $2.50 per share. Taxes in various forms increased heavily as follows: 1942....................................................... 1941....................... 1940.............................. 1939.................................................... Total $46,884,888 38,973,797 20,062,048 15,494,610 Per Shan $5.41 4.49 2.31 1.79 The above compares with Net Profit to the Company, without deduction for Depletion of Metal Mines, as follows: Total Per Shart 1942........................................................ 1941........................................................ 1940........................................................ 1939........................................................ $36,464,030 43,433,659 35,052,899 20,236,552 $4.20 5.01 4.04 2.33 a CORPORATE TRANSACTIONS During 1942 the Company increased its holdings in shares of subsidiary corporations by purchase of 14,300 shares of. the stock of National Tunnel & Mines Company and of four shares of the stock of Butte Water Company, increasing its holdings to 803,332 shares and 119,384 shares, or 37,32% and 99.82% respectively of the total outstanding shares of these companies. The1 Kenosha Brass Company, a wholly* owhed subsidiary* of The American Brass Company, was incorporated December 5,1941 and its authorized capital stock consisting of 2.500 shares of 310. par vaiue was issued in 1942, In addition ith. Company, acquired 52.5% of the capital stock ot Basic Magnesium, Incorporate i., T|e Cbihphhy,;'al^b hcbtiired twqithlrdS'pLtbe,, Ccj.mtnph',fdcklgnd:V.all of the issued' Blifeferr^dqSfb&k: :bii thel;'Goldehi:jIlh^ahd'i:MInin:g CbtnHany. loaning' Claims near Lead, S^dth':; jiaithW; 'itad'40$542$!' shajejSil.dfi:t|dei'Sip'cSt; of Ah#:J?arli;. tlthh Ccinspii|lated Mines CptapanVi;tbperntiiig:.tniii|h i'U'fnfelRgck' ClfSV t|tsh|j; district)', iacteasin:j|'fta participation in' that ''GlbthSddy tb'478j|^Si!lshhree.|pr!!2fL5J''lof'-of 21(391,SsJ shares. A contract was entered into with J. Neils Lumber Company covering the sale of timber lands (approximately 110,731 acres) and timber rights on other lands, m Lincoln 'County< Mbhfffiki:ipseifeddfjy the: CdijJ^aByq; Cbhfaihipg1 iff thtBggiregbte approximately 810,90<jj000 board feet, subject, to a reservation by the Company'of ail mineral rights. Thfe safef:,,[f!ib! ;waS'i'll6i^i!*8I;4,,:df 42|i',j51(i: 'Yas^paid'ini'fa&j '(be'fBBfainder being payabfeiM''the.igtecoftiJlifiiOGCi/ahnh^Uy, ::TjfiBllti6fb^r:, ffild.;cphs&uties1 drily'-si part,.of fhe'tithShhjilhtli'kiid^tjthlihr arf dptiltributary to its.lumber'tphfatid||kalsf'hre hpt'rffg&fed'id tfte pc|ihkry:!lhkiif|ss :bfilhhCdih;papy.: The products of the Company and its subsidi itai to the war effort. Practi- acai'.y 'ailitfig ffebl'IffduelfBm|aBc|if pf fv*ar;'ptilfitBlS/'i;aitd; ammunition In addition, the Company .... llilliief'Either: toi Government .....^I^Bg^ged'ihtdijf pttbductjon j;;'tle^els!;|!a:hj|:,: war jequiiiibent and contracts with Governmental Agencies of . fllMhlihaf;^, Batbtjhjfdtd 'specific Blent of existing plants 'and the] development, constructBiojinip!'ja'nbdifdoapeIlfdralMtio1n^eonflhnrgeew- properties and plants and for research. Combined oufput of all strategic products ffojhithesB'.'plBoN'.SB'l^iii'aaioun&d tb 3,il'||9^4j^li':'pk(udd|, bb increase? of: 21,8% over 1941. Copper: At the request of the Government, Chile Exploration Company (a subsidiary) is expanding and enlarging the mining and treatment facilities for copper production at Chuquicamata, Chile, to substantially increase production of copper. This project involves the expenditure of approximately $5,000,000, to be advanced by Government agency, the advance to be retired as the copper produced from the additional facilities is sold. At the request of the Government, in view of the unusual requirements for the production of copper to meet the war effort for hemispheric defense. The Cananea Consolidated Copper Company, S.A. (a subsidiary of Greene Cananea Copper Coinpany) is developing an extensive body of low-grade copper ore adjacent to its present mine pNYC 00010189 ' i. f '' 'k and plant at Cananea, Sonora, Mexico, and i; constructing treatment facilities involving an expenditure of approximately, 812,000,000 designed to substantially increase the pro duction of copper. The construction of this project and its future operation will be financed through arrangements with Metals Reserve Company, a corporation created by Reconstruction Finance Corporation. Chromium: An agreement was entered into with the Government to enlarge the productive capacity of the, mining anil milling, facilities oi the chromium, property in Stillwater County, Montana, known as the Benbow Mine, which was developed by the Company fbr the 'Government and with Government funds. This plant began operations in 1942 and' is operating satisfactorily. Extraction, grade of concentrates and production of chromium has fully met expectations. Work on increasing the size of this plant is under way and will be completed during 1313. i Agreements were concluded with the Government for the development of the Mouat-bampson praphtty ip Montana, and for the construction of a mill at that property. This development and construction work will also be carried on for the Government arid writh Goverpmeht funds, on a fee basis. Magnesium: At. the request of the Government and all interested parties. Anaconda purchased for the sum of 875,000, 52,500 shares (52}'j%) of the capital stock of Basic Magnesium, Incorporated, a corporation of Nevada, with which the Government had contracted on a fee basis for the management of the construction and operation of its magnesium plant at Las Vegas, iNevada, and its magnesite mines and mill at Gabbs, Nevada. Basic Magnesium, Incorporated is,completing the construction of and is operating the plants for the Government. Magnesium is being currently produced as construction proceeds. Ammunition Brass: During 1942 the plant for the production of ammunition brass constructed by The Americas Brass Company at Kenosha, Wisconsin, for Defense Plant, Corporation was completed and is being operated for the Government oh a fee basis by Kenosha Brass Cdmpany, a subsidiary of The American Brass Company. Anaconda-American Brass, Ltd., of Canada (through a subsidiary) had constructed and is operating for the Canadian Government a plant at Toronto, Ontario, Canada, for the production of ammunition brass, and in 1942, also tjook over at the request of the Canadian Government the operation of a Government plant at Montreal for the pro duction of ammunition brass. Both plants are operated on a fee basis. Silver: I The use of foreign silver in industrial products was restricted by order of the War Production Board on July 29, 1942. The price of domestic silver was fixed at the prevailing price of 71.11^ per ounce by the Office of Price Administration, and that of 7 foreign silver at 35.375c per ounce, subsequently increased to 45c on September l. 1942. Since then further restrictions and higher priority ratings have been applied to both classifications. A greatly increased demand for silver developed in the manufacture of q'ar equipment and as a substitute for scarce metals particularly tin. Armv-Xavy "" Awards:1 Practically all of the facilities and the products of the Company are used for war purpose*. The Ansonia. Torring'on and a'eroury plants of The American Brass Company' w]ere among the first organizations in the copper and brass industry to receive the award of the Navy "E" for outstanding production of war materials. Since that date. .April 7, 1042. seven additional plants of the `Company and its subsidiary companies have bpen similarly honored with Navy "E" or Army-Navy "E" pennants.* DETAIL OF OPERATIONS At the request of the United States Government, Office of Censorship, detail with respect to the production and, delivery of popper, zinc, lead, manganese, chrome, molybdenum, vanadium and cadmium has' been omitted. The production of copper was maintained and deliveries were increased in com parison with the prior year. The property df North Butte Mining Company in the Bttte District was reopened during the year and is beifig operated by your Company u4der a contract arrangement. .As a result of auditions to the electrolytic zinc plants at Apaconda and Great Falls, Montana, zinc production was materially increased. The production of lead decreased due to smaller receipts qf purchased opes, concentrates and other materials. The manganese* plant at Anaconda. Completed in 1941, operated throughout the vear 1942 at full rated capacity; producing manganese nodules assaving 60 14% Mn. S^ter; There were produced 15,416,256 ounces of silver, of which 38,077 ounces were treated onjtoll for account of others, 5,939,868 ounces were produced from purchased ores and concentrates, and 9,438,311 ounces were produced from Company ores. Of the above total 2,724,577 ounces were contained in by-product materials sold to other companies. Golfi: Gold production amounted to 162,133 ounces, of which 4,766 ounces were treated on jtoli, 91,026 ounces came from purchased materials, and 66,341 ounces were from the mines of the Company. Of this amount 14,455 ounces were sold in the form of various by-product materials to other companies. MisIcellaneous: The principal miscellaneous materials produced in 1942 were 126,315,960 feet of luniber; 68,090 tons treble-superphosphate and phosphoric acid and 9,798 tons arsenic. i -- v V' r- Airily PAIYQ 0o 1019j Other miscellaneous products were bismuth, indium, nickel sulphate, palladium, platinum, selenium, tellurium, tin and zinc oxide. Fabricating Plants: The shipments of manufactured products from the plants of The American Brass Company including Toronto Plant* and Anaconda Wire and Cable Company amounted to 1.41:5.60!).645 pounds, establishing a new record of output. In addition shipments from the fabricating plants operated on Government account in excess of shipments of manufactured product?' from: Company departments to those plants amounted to M5.Sid.SHl pounds, resulting in total output of 1,639,422,506 pounds. EMPLOYEES As of December 31, 1942 total employees of the Company and its subsidiary companies numbered 63,962 in addition to which employees in Government properties operated by the Company numbered 7,295, making a total of 71,257. To the end of the year 7,031 employees of the Company and its subsidiary com panies had joined the armed forces of our Country. Of the employees in Company plaints in the United States 84,71% purchased War Savings Bonds, their subscriptions in ,1942 amounting to $5,576,045, GROUP INSURANCE The Group Insurance in force at the dose of the year amounted to 865,545,877 covering 40,482 employees. The amount of insurance paid to beneficiaries during the year was $705,100. NUMBER OF SHAREHOLDERS The number of registered shareholders appearing on the transfer books of the Company at December 31, 1942 was 115,974 compared with 114,993 at the beginning of the year. FINANCIAL STATEMENTS There is attached hereto as a part of this report a Consolidated Balance Sheet showing the financial condition of the Company and consolidated subsidiary companies at the close of business December 31,1942, together with a Consolidated Income Account and a Consolidated Surplus Account for the year, certified by Messrs. Pogson, Peloubet & Co., Certified Public Accountants. By Order of the Board of Directors. CORNELIUS F. KELLEY, Chairman of the Board. New York, N.Y., April 10, 1943. JAMES R, HOBBINS, President. 9 N11770.01 An a c o n d a Co p p e r Min in g Co mp a n y and Subsidiary Companies Consolidated Balance Sheet--December 31, 1942 FIXED ASSETS: ASSETS Mice* and dicing claims, water rights and lands for metal producing and manufacturing plants-- nee note ............ ............... .... .......... .............. ........... ................................t..................................... Coal mines, timber lands and phosphate deposit*--see note G....................... ................. ......................... % LeW reserve for depletion-........................ ........................... .......................................................... ............. 548i.718.it9 15 si.nt.254.70 2.637,534 35 6.481.720 35 Buildings and machinery at mines, reduction works, refineries, manufacturing plants, sawmills, foundries, waterworks and railroads (including railroad concession* to the extent of <754,482.64} `-seeinoteG;----...*-.....-;...-... .................... ..... ................................................................--........................... $308,486,617.74 Leu reserve for depreciation... 190.001.360.97 Patent*.:. .---- ----------- . Investment*: Securities of subsidiaries not consolidated--see notes C and F-. Other; security investments. less reserve--see note FIndebjtfedJMii* of subsidiaries not consolidated--not current- % 17,369.253.95 14.597.068.75 2,281,221-04 ns.485.t56.77 1.001.00 34.247.543.72 FUNDS PROVIDED BY GOVERNMENT AGENCIES for extension or operation of metal producing sad manufacturing facilities, expended or on band.--------- ---------------- ------------------------------ *441.933,750.99 7.746.IQ7.84 DEFERRED CHARGES: Mine development-- see note LPrepaid tpi>i>%M _ . .. Deferred expenses - ,,.. 9,157.878.58 621.434 40 305,166.62 CURRENT AND OTHER ASSETS: Current Asseta*. Supplies oh band--see note E-------------- Metals and manufactured products: . In process ""SeenoteD--------- ------ Finished--see note D ........ -- Accounts and notes receivable--trade, leu reserve- liadMedoeM.eroffioMs.- Indebtednew of subsidiariesnot consolidated--current- Cmtec States and Canadian Government securities.. Cash- Other aset*: losta*)libLi ent bouse and land sales and other accounts receivable, lew reserve-, Advaaci es to sundry mining companies, including advances on ores, leu reserve... Cuprifrerous malarial being currently treated--see note I~ Postwar refund--Umied States and Canadian excess profits taxes--estimated See explanatory notes, pages 13 and 14. 8 22,027.108.42 6.913,115.71 39,667,982.59 25,710,503.26 15,171.83 1,047.403.43 34,740,150.21 51.990,736.69 182,112.172.14 1,804.103.98 347.200.55 1.100,662.45 905.417.56 *646.033.893 09 An a c o n d a Co p p e r Min in g Co mp a n y and Subsidiary Companies Consolidated Balance Sheet--December 31, W43 LIABILITIES CAPITAL STOCK of Anaconda Copper Mining Company AutporuedH-Ii.OOO^OOO share* of the par value of 150 each Iwuei-.............................................................................................. Held.in treasury or through subsidiaries.................................... Outstanding,.-...--......... ................................ ............................. *445.934.300 mu Ii.i37.40Q MU 843S.T16.9W CAPITTAL STOCK AND SURPLUS of consolidated subsidiaries owned by minority interest........ 4.716.09m 43 ADVANCES BY GOVERNMENT AGENCIES for extension or operation of metal producing and manufacturing facilities...................................................................................... .......... ...............--_____ 7,741.107 fl4 RESERVES: For workmen'* compensation insurance.......................... ............. ................................................................. .. 9 1,598,494.31 For contingencies..--.................. .......................................................................... .................................... . 4.346.750.00 5.945.8 *4.3 1 CURRENT LIABILITIES*. Account* end wages payable--see note J ................. -................................................................................. '$ 28.011,337.60 Accruedtaxe*--see note M....-........................ .............. .................................................................................... 35,931.087.53 6l.94i.445.jS DEFERRED CREDITS TO INCOME S58.489.74 SURPLUS.. See explanatory notes, pages 13 and 14. il 131,108.415.6t 9946.033.693.0* An a c o n d a Co p p e r Min in g Co mp a n y and Subsidiary Companies Consolidated Income Account--Year Ended December 31. 1942 Gross sales and earnings.... ............................................................... Other ineome: Dividends from subsidiaries not consolidated..................... Other dividends, interest end' misceitaneod.s income_____ 3408.952.63fi 96 * 633,723.10 398.S35-10 1,252.533.20 Less: $410,205,213.13 Cost of sale** --on laat-ia. first-out basis--operating expense*, development, main! ice and irepairs, administrative, selling and general erpenaes and taxes, except income : profits ;taxes....................................... ................................................................................. ................................... *313.070.573.19 Provision for depreciation and obsolescence.................. .......... ................................................... ............... 13.014,113.41 Provision for depletion of coal mines, timber lands and phosphate deposits (not including deple tion of aetal mines)._________________________ --.................. ............ .................................... ...... 136,986.63 Interest on debentures and serial notes, iaciuding discount and expense and premium on deben- 198,378.05 331420,057 28 United States and foreign income and profits taxes--estimated, including *8,100,000 provision * 77.735,157.83 for United States excess profits tax, net, after deducting credit for post-war refund and debt }etirement1,.................... ...................................... ................ ......... -.......................................................... * 37,000,323.85 Provision for contingencies--____--........... .......... ........................................................-- -------------------- 4.000.000,00 41,000,325.85 Met Income, without deduction for depletion of metal mines... $ 36.784.83!.00 Minority share o! income. 3*0.901.7* Coujolids ted Met Income without deduction for depletion of metal mines- 9 36.464.030 28 Consolidated Surplus Account--Year Ended December 31, 1942 *116,870,736,11 5*0,343.73 *116,330,230.36 36.464,030.26 I NOTES TO CONSOLIDATED BALANCE SHEET--DECEMBER 31, i0 n o t e a --p r in c ip l e s a p p l y in g in c o n s o l id a t io n la order to'preaeat the itatus of the Company's interest va subsidiaries where the interest owned {durectiy or through other sabsuTares) , 7 > ^ ->r more of the issued stock. the assets and liabilities of said subsidiaries.',13 they appear upon the books of >o;J subsidiaries, are distributed under appropriate heading* on the Consolidated Balance Sheet, together with adjustments to property, plant and equiivuent ^.described >fi Note G. except that four small subsidiaries more than 75% owned, the operations of which -ire cot an .nc,rural part1 of ,t'he operations of the consolidated group, are earned as investments in the Consolidated Balance sheet. The ..nter->t of minority st.ickholders of subsidiaries, the accounts of which ire consolidated. is shown on the Consolidated Balance sheet.' Accounts:of subiidiiiries ip which the Company's interest is iess_tiian ?3*T of the issued stock are not consolidated and the 'hares owned in their* subsidiaries are carried, as .investments in the Coaso.jidited Balance sheet. The term '`^ubsidiane-*" .s intended to ttveap oornotnlions \h which a majority <A the voting stock is owned directly by the Company or through other corpora tions':3 which the <tock .merest of the Company is more than So'T- NOTE B--ASSETS IN FOREIGN COUNTRIES Assets in.foreign countries fail principally into two groups: those of metal producing subsidiaries operating in Mexico and couth America; and.of :a;imaaiifactim'n`!isubiidiary in Canada, Of the net fixed assets andinvestrdeots ,aa shown on the. Consolidated Balance Sheet, approximately fifty-six per cent, are located m Messed and;Pdutb Aroerica. atid.IisS i^hahionftrhglf' of one per peat. La Canada. Of ,.the; net current assets. consisting1 of current assets tesa-ctirrect h&oilitieS, included in the Consolidated Balance sheet, approximately one per. cent, arts located m Mexico and south America and four per cent- are located m Canada-- Casa balances m foreign countr.es amount to if.33i.9i)7 31 nod consist priii^riIlkr :r^ngr'|']baii^iicst* ::beitH,;|iii .,ldii|tii ;AineHfc*. Mexico and Canada. :Of;deferred! charges-and otherjusets approximately fifty-three per cent, apply to ope t"ia;'Mcxt<X! -a--n-jd-1--S o-'- u- it!*h-- A* m- e--rica and three per cent, to operations in Canada, Fired assets,m foreign countrie.s 1 ..p..:.|.c.i.^.i.r.c..td..lc.^l....l..^.. is^bllik'f..^....'...O..p....t.h..e basis explained in Note G as to property, plant 3ad equip* meat, and Note F as to investments. ^CulrOreTnatt/'aitnod^ miscellaneous asaeU of metal producing subsidiarriieess operating imn1 MMexicoo'1 an' d'. Sooiuuutvh.'i,]njA|^. merrica",.a,ari!e earnIed mi.the-laccobunts of tho^se subsidiaries in L^ im^"titheed',r.aS.tfactee.s.ddif:o-dllaxirdsb.^rjTethVeatp'ioiurnt.iiof naicthtEeter'e.o f on*g'fmthaet.ntrsan;nsfaocret^ign curr.e...e..c..i.. which i: .. .......... ....."" "'.obtiirert ""':,J........ 1' 'v'' .... Current-assets of the CartadiabdubsicharyhaveiibewcoaiTerled1 at the. rate of,exchange current at December 31. I94i, NOTE C--EQUITY OP COMPANY IN UNCONSOLIDATED SUBSIDIARIES s of_the principal uncoQsobdated subsidiaries uAnaconda Wire and Cable Company. Mountain ' * **'' Company) and the four-unconsolidated subsidiaries referred tp i!n Note A. December 31, 194i';n the amount k ^^wAhb'^.iU'iaTestmenta'OQ the Gonsolibatid Balance'Sheet has cot been 'Ir^p^iift^n'tsied'uity in the undistributed earnings.'bf'such subsidiaries areoce*:;at 'dates of acquisition. ANlTACTURED PRQDCCTS >us materials, and zinc snd'iead ores and concentrates, while in treatment ilectrolytie copper, metallic line and lead bullion, are classified as metals tihczuSej. (e&d bullion. and other products and metals produced' in connection at fabncatioglplants, are classified .as finished. ' equivalent of current market for metallic content of such inventories. Decemtxr M. 1941 fexcept gold and molybdenite, which are carried at market r.......... . . in . sis. Inventories on band at December 31. 1941 are earned at P<ie:^!b^xii|^3'liia'^^cK/bc^lr^n>:llip^xlc^!ii^baati:<11^j.ssin^'.ir|g;iluci at curreat eosts. Inventory valuations 3'U'IBA*^'.1. . .................. various metals and products at December NOTE, E--SUPPLIES ON HAND Supplies oaihand. including replacement parts ta well as currentt s$ upply items* art carried at cost. uvestment* ta-aecunties of lusoonsohdated subsidiaries and o..th..e.r security investments are carried at cost or less, such cost being cash b]^!jIj^jjk :l<^ake|1.6^ jud in'*xehahi*iforiiprdpfertjr. transferred Iby, 'the,.Company or a consolidated subsidiary, cost of sues pr'-pprtr o the consohdatad group after deducting depreciation to date of transfer, and do not indicate current values. Other seeuzxtura,Include SSS.OQi? ahawa Of In*pir*tsoTi Consolidated Copper Company earned at 110,248.1(77.51. being the cost of such jtb'ce redu w h riiiidtvicteaafiireceirediliswoe January 1. 1941, and il.8M.OQO<prmcipki amount of First Mortgage Bonds of that .. Jldmedhat iparlllfa'jreaer** haa bees deducted from the amount at which other security investments are carried equal to the rtoat cf ^vestments baaed on properties uj Europe oopERTY. PLANT .AND EQUIPMENT--BASIS OF VALUATION mi and equipment of the Company are earned at cash cost or in the case of physical properties acquired for stock of pany at par value of such stock. ,l,l`"'"""`1'.. I,J1 IJI`JI!-I:11 '''i x- (eXC8pt u to mining propertk* of Andes Copper Mining Company and o i for which is .J L between the proportionate *' "'ere first it acquj- fpii'offJwhefeluudi'listodc'iiWHiacqujred by the consolidated group for stock of the Company, the par value of the stock of the ompeay issued therefor. Mining properties of Andes Copper Vf Jiuag Company and Santiago Mining Company acquired by 13 iaid compact** respectively for shares, of their capital stock are included is the Consolidated Balance Sheet at the original par ralce of the shares of those companies issued therefor (i.e., #15 per share), instead of the acquisition cost of such shares owned by the consolidated group. The total of the amounts credited to surplus of the Company and to consolidated surplus on account of the deference between the par value of the above-mentioned shares of Andes Copper Mining Company and fi&otiago Mining Company and cost thereof to the Company and its subsidiaries was #23,429,193.38. (c) It has.been the practice of the Company, consistently'applied to ils own properties and those, of subsidiaries the stocks of which have-beea acquired aqd the accounts of which are included in the Consolidated Balance sheet to carry property, plant and : equipment as described above. , pursuant; to- the requirements of the Coded elates Treasury Department, valuations as of Murch 1. 19.1,3 of mining properties then owned have been recorded on the books for the purpose Of. computing the amount . allowable as'a deduction for depletion in arriving at taxable income under the federal income tax laws, but these values have qdt r.eea redacted ,ia the published accounts of the Company. The Company has consistently followed the practice of not deducting in any of its published accounts, any amouDt for depletion ! on account of tnetaij mined, and no such1 deduction is included in any of the financial .statements submitted herewith. Depletion -based.on cost has- ;n the case of timber..'coal and phosphate iands. been deducted from income in the financial statements .: submitted herewith and also from. the. cost basis.shown.in the,.Consolidated Balance fiheet. (d) The values of property, plant and equipment ire shown on the bases above. t forth and do not indicate current values which 1 could be .established, only by current appraisals* NOTE H--MINE DEVELOPMENT These expenditures cover development in connection withproperty of the Company or subsidiaries and on leased properties and include #458.324.00,. remaining of the amount formerly classified, as ores produced during development! operations, under other assets, j^f.inelrde^yib'pniedt! :;iba the basis of ore extracted and' the- rate is based on. estimates of ore reserves. N0TB;|i4iiS Cupriferous' material being currently treated is carried at a valuation, which U leas than the current value of the recoverable metals codtainedtherem. ' . >:T NOTE J--ACCOUNTS PAYABLE In.ac * v w i *" f [heSixth Supplemental National Defense Appropriation Act (approved April <8, 1942) as amended, providing for rececotiattonof certAin contracts with the United States Government, The American Brass Company, whose accrurt are included in tne Consolidated Balance Sheet, has completed discussions with the War Department Price Adjustment Board for r"peh i c p l * r i i.ix mth the War Department Navy Department. Maritime Commission and Treasury Department. The' amountnof !;the!i9ettlement tiilibeeti deducted from gross sales and is included in accounts: payable o'n the foregoing Balance Sheet Formal agreements have not yet been executed but are in course of preparation. NOTE K--oURPLUS Induced in Consolidated Surplus are: (a) a credit of I2S.429.105.S8 referred to in Note G above, (b) a credit of 120.818,138.49. be-.rg 'tne *j v u I rc^ nron^eoi rf tne issue of 3,109,398.34 shares of stock of Company over the par value thereof and (c) a charge of 811 90? 498 50. oemg discount and expense on issuance, and; premium no redemption of bonds, redeemed through funds obtained l si t >' i*,xi --'erred to. See paragraph1 (c) of Note G as to practice regarding depletion. NOTE L--CONTINGENCIES A reserve for contingencies of 8* 346,7.50.00 has been provided for any contingent losses or liabilities now indicated. Of the reserv e at December 31. 1941, 84,750 `jOO.GO has been transferred to reserve for federal income add profits taxes. NOTE M -I-:: EK'L V `ME AND EXCESS PROFITS TAXES United States income and excess profits taxes for.the taxable yean up to and including December 31. 1938 have been determined bv 'he United StaterTreeaury Department and any amounts due thereunder have been paid. ' Returns for subsequent years have not r *n audited by the United States Treasury Depsjtment.; Of the 10% credit allowed against excess profits taxes for the year 5942 837j4,;^!j^ii;dieh!!!j^pir<c^<^|cr^t':ha5 been deducted from liability for 1948 tax. NOTES TO CONSOLIDATED INCOME ACCOUNT--YEAH ENDED DECEMBER 31. 104-2 Sales of metals and.mamidltottiied products are included in income as billed and delivered to customers. Undelivered sales contracts and purchasecommitments1 are notigiven effect to in the Consolidated Income Account. Sales have been reduced by the amount determined to be excessive under renegotiation proceedings. (See Note 1 to Balance Sheet.) Intercompany sales and iintercompanyiprofits where these latter are material have been eliminated in the Consolidated Income Aceour t. Depreeiatidd1.!!^;:^^ sun.* hast u in previous yean except that is the case of The American Brass Company addition's] depreetatidja 'ba^lohli'the increased volume of. operations hat been provided. ' War facilities ire being amortized at ratij*zgltiitiiiicuTli^ed!1 i,;!;, Is the yhar 1942 the sh#$f the Company in the combined net income (without, in the case ohnining companies. makimymy provision for the principal unoonsolidated subsidiaries (Anaconda Wire and Cable Company, Mountain C-ty Go^perl^ Minas Company) and the four iarnaU unconsolidated subsidiaries referred to is Note A, amounted to $783^1.J4iTrom two of which 1633,72340 was received ta dividends and is included m the Consolidated Income Account......... ;i. There is included m consolidated incoina 8fti,4ft,913.17 as Anaconda Copper Mining Company's proportion of the income of u aomesticandforw^cenaoUdatedfubsidiirias operating in Mexico and South America and 8313.086.80 of the earning* of those companies has bees, apportioned to minority stockholders, ail of which income has been received in United States funds. There ui included meocso&iatad moots* $1,449^338.13 which is the equivalent (based on the average monthly exchange rate for the year) uaWnitodiSfatos etirrencx ofiitii* net income for ithe year 1942 of AnrcondaAmerican Brass Limited, a wholly owned Canadian rubiidis^, aftet adjustment reaulting from tha conversion of net current assets at rata* m effect at December SI, 194ft. No dm. dends were received bom said susodLary donng the year. 14 POGSON'. PELOCBET & CO. CS-MUlES ?TOUC ACCOUNTANTS PERCY W. POGS0V MAOUC8 E. PELOU8ET LEWIS M. NORTON SIDNEY W. Pf-LOCBET HOWARD L. Gi/YETT CRAWFORD C. HALSEY ! \EW YORE 25 BROADWAY EL PASO. TEXAS - NULLS BLOG. C4*l i a o o u x s * "csurirttn " -*e w y o u * AGENTS st'fcor* - k eUm-JtS.^COHMAarNrsBjuJsU.RIS sESTje-- * :;> EGYPT HEWa*e'x. AS.XvIDDJVtjuH *\yHs-E:A,J;Yo To [he Board of Directors, Anaconda Copper Mining Company. is Broadway, Xew York, X\ Y. We have examined the Consolidated Balance Sheet as of December 31, 104-2 of Anaconda Copper Mining Company and the other corporations whose accounts are consolidated with its accounts as stated in Note A to the Consolidated Balance Sheet 'which other corporations are hereinafter referred to as consolidated subsidiaries) and their Consolidated Income and Surplus Accounts for the calendar year 1942, have reviewed the system of internal control and the Accounting procedures of the Company and its subsidiaries and, without making a detailed audit of the transactions, have examined or tested; accounting records of the Compunv and its subsidiaries and other, supporting' evidence, by methods and to the extent we deemed appropriate. Our examination was, made in accordance with generally accepted auditins standards applicable in the circumstances and included all procedures which we considered necessary except that it was found to be impracticable to obtain direct confirmation of balances owing by departments and agencies of the Crated States Government, but we have satisfied ourselves with respect to these balances by other means. The practice of the Company and its subsidiaries in computing their net income or net loss without deduction for depletion of metal mines is in accordance with accepted accounting procedures in industries' engaged in tfcie: mining of copper, zinc, lead, silver and gold, and is in agreement with Idqg^ estlalblislie^! ;;and Consistently maintained accounting practices and pro cedures of this Company and its subsidiaries and others similarly situated, and the Company is advised by counsel that such procedure is in accordance with legal requirements. In our opinion, the accompanying Balance Sheet and related Income and Surplus Accounts, together with the notes attached thereto or appearing thereon, present fairly the consolidated: position ..c|itbeCamSpany and its consolidated subsidiaries at December 31, 1942 and the combined for the calendar year 1942 in conformity with generally accepted accounting principles applied on a basis consistent in all material respects with that of the preceding year, POGSON, PELOCBET & CO., Certified Public Accountants,, New York, March 25,1943. 15 An a c o n d a Co p p e r Min in g Co mp a n y An a c o mo a An a c o n d a Wir e a n d Ca b l e Co mp a n y a/sf CWSC-N* NO "Sa T vC-Nf -i asT:.n G5*On .u OSCn . s . i Automotive Aviotion Building Electrical Apparatus Electrical Appliance Electrical Contracting LOCATION OF MANUFACTURING PLANTS v*AlQN. :N0. MUSKEOON. VMh . SOME OF THE INDUSTRIES SERVED Electrical Eauipmtnt industrial Power Plants Metal Fabricating Marina Mining Petroleum Radio Railroad Steam Electric Refrigeration Shipbuilding C#AN<3. CAL;f 9>WT'wCXET S S-'Ca w CSE. -LL. Textile Telephone and Telegraph Transmission Equipment Utilities Power Companies Municipal Plants Rural Electrification 8are Wire ond Cable Cable Accessories Conduit 'Cooper Rods Cords PRODUCTS ELECTRICAL WIRE AND CABLES OF EVERY DESCRIPTION Hallow Conductor Cable Ignition Cables Magnet Wire and Coils Power Cablet Lead, Rubber, Paper, V.C. Pori*way Cable Rubber Covered Building Wires Slow Burning Wires and Cables Varnished Cambric Wires and Cobles Weatherproof Wires and Cables This Company is now engaged 100% on the War Pro* gram. Special types of electrical wires and cables are being mode in large quantities lor aircraft, ships and motorised equipment. Wires and cables are likewise produced in large volume far signal and communication systems, and for the electrification of the country's rapidly expanding war industries. For years, the research program of the company has been concerned with increasing the durability, carrying capacity and dependability of electrical wires ond cabfes. Today the benefits of this program are going into military production. When the war is over, the company will hove a valuable backlog of product development and research to place at the disposal of its customers who ore likewise now principally engaged on the War Program. Atlanta, Ga. Boston, Mats. ^Charlotte, M. C Cincinnati, Ohio Cleveland, Ohio Dallas, Texas Offices AS LOCATED IN THE FOLLOWING OTiES: Denver, Colo. Des Moines, Iowa Detroit, Mien. Kansas City, Mo. Lot Angeles, Calif. Milwaukee, Wit. Minneapolis, Minn. New Orleans, La. Philadelphia, Pa. Pittsburgh, Po. General Offices: 25 Broodway, New York Chicago Sales Offices: 20 North Wocker Drive Rochester, N. Y. Sr, Louis, Mo. Sen Francisco, Calif. Seattle, Woih. Washington, D. C. OT^OT^^B5iiip!Sne5SiaBWSSFiSlSKIM^`('"slsa'