Document n9jjQ6VpoLLE5mboMJZG9QRa

N11771 PNYC 00010200 An a c o n d a Co p p e r Min in g Co mp a n y An a c o n d a Wir e a n d Ca b l e Co mp a n y ANOESSGN NO. GSEAi >AlIS. MONf. WA5:T!NGS-ON.HUDSON, N. Y. LOCATION OF MANUFACTURING PLANTS VIA6ION.'NO. MUSKEGON. MICH. Automotive Avot'Oo Building Chemical Communication SOME OF THE INDUSTRIES SERVED Conduction (Heavy) Electric Utilities EJectncol Manufacturing Food Morine M*toi Fabrication Mining Petroleum Radio Railroad 08ANGE. Ca l *, paw t l c ket 3 . SYCAMQiS, ILL. Rural Electrification Shipbuilding Textile Telephone and Telegraph Automotive Cable Bate Wire and Cable Cable Accessories Communication Cable Copper Rods Cords PROOUCTS ELECTRICAL WIRE AND CABLES OF EVERY DESCRIPTION Hollow Conductor Cable Magnet Wire and Coils Non-Metcllic Conduit Power Cable: Rubber, Paper, Varnished Cambric Parkway Cable Rubber Covered Building Wires Shipboard Cables Slow Burning Wires and Cables Synthetic Insulated Wire ond Cable Weatherproof Wire and Cable This Company is continuing its program of large scale production directly lor the Armed Forces and lor other companies producing war materials. At the request of the Army and Navy, special facilities have been added, greatly expanding the production of Field Telephone Wire and Shipboard Coble. Other special and confidentici products were supplied to the Armed Services. This Company has always maintained a complete and up.ra.dote research and development laboratory. This has enhanced its ability to meet satisfactorily rhe de mand* of the fighting forces. Naturally, the Company will hove the advantage of these experiences and the "know-how" with which 10 meet the many new problems to be presented in the post-war period. The measure of this Company's success in supplying the Army and Navy it demonstrated by two new ArmyNavy "E" awards-- plus renewal stars to two mills that hod already received such awards. Atlanta, Ga. Boston, Most. Charlotte, N. C Cincinnati, Ohio Cleveland, Ohio CfTCES A LOCATED IN THE FOLLOWING CITIES: Dallas, Texas Denver, Cole. Detroit, Mich. Kansas City, Mo. Los Angeles, Calif. Milwaukee, Wis. Minneapolis, Minn. New Orleans, La. Philadelphia, Pa. Pittsburgh, Pa. General Offices: 25 Broadway, New York Chicago Sales Office*: 20 North Wacket Drive Rochester, N. Y. St. Louis, Mo. San Francisco, Calif. Seattle, Wash. Washington, D. C. An a c o n d a Co p p e r Min in g Co mp a n y CAPITAL STOCK December 31, 1943 Authorized. 12,000.000 shares, *30 each .... Issued, 8.919,086 shares, $50 each *600.000.000 443.954.300 OFFICERS Chairman of the Board Co r n e l iu s F. Ke l l e y President........................................... ... Ja me s R. Ho b b in s Executive Vice-President............................................................ Ro b e r t E. Dw y e r Vice-President . . . Da n ie l M. Ke l l y Vice-President in Charge of Mining Operations . . Cl y d e E. We e d Vice-President in Charge of Metallurgical Operations . . Fr e d e r ic k La is t yice-President and General Counsel. . W. H. Ho o v e r Assistant to the President............................................................ El b e r t O. So w e r w in e Secretary and Treasurer . . Ja me s Dic k s o n Comptroller..............................................................................W. Ke n n e t h Da l 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 ma s E. Co n r a d Assistant Secretary and Assistant Treasurer . C. Ea r l e Mo r a n Assistant Secretary..................................................................... Je r e mia h D. Mc b p h y DIRECTORS Jo h n A. Co e Ro b e r t E. Dw y e r E. Ro l a n d Ha r r ima n Ja me s R. Ho b b in r Co r n e l iu s F. Ke l l e y Ma u r ic e N e w t o n Wil l ia m C. Po t t er Go r d o n S. Re n t s c b l e r Wil l ia m D. Th o r n t o n OFFICES An a c o n d a . Mo n t a n a Bu t t e , Mo n t a n a 43 Br o a d w a y , Ne w Yo r k An a c o n d a Co p p e r Min in g Co mp a n y Annual Meeting of Stockholders PROXY STATEMENT This Proxy Statement sets forth certain information with respect to the enclosed -Proxy. which Isolicited bv the management ot Anaconda Copper Mining Company (hereinafter referred.to as the Cotnpany), and the matters to be voted upon pursuant thereto at the Annual Meeting ot Stockholders c: ctre Company, to be held May 19. 1943. Any stockholder giving a Proxy in the form accompanying this i Statement , has the power to revoke the same at any time before the exercise thereof. As set forth in the accompanying notice, the matters to be considered at the meeting are the election of three Directors of the Company and the transaction of such other business as may properly come before the meeting. The By-Laws of the Company provide for a Board of nine Directors divided into three classes each consisting Of three Directors, who are elected for a term of three years, the term ot each class expiring in different years. At each annual meeting the successors to the class' whose term of office expires in that year, are elected for a three year term. No min e e s f o r El e c t io n a s Dir e c t o r s The persons designated in the accompanying Proxy have been selected by the Board of Directors and have indicated that they intend to rote for the election as Directors of Messrs. E. Roland Harriman, Cornelius F. Kelley, and Robert E, Dwyer, whose term of office expires at the coming annual meeting. In f o r ma t io n a s t o Dir e c t o r s a n d No min e e s The principal occupation of each Director and nominee, the year in which he first became a Director of the Company, and the approximate amount of securities of the Company beneficially owned by each Director and nominee, directly or ihdirectly, at February 28, 1943, were as follows: Nu m PrioarriEpt*n!nOloeremapeAottfaM YeEalreaiaedWD&iircebcFtoirm Number :f 3 barn of Common Stock Feb. John A. Coe Robert E. Dwyer E. Roland Harriman James R. Hobbins Cornelius F. Kelley Maurice Newton William C. Potter Gordon 5. Rentschler William D. Thornton Chairman of the Board of The American Brass Company, a subsidiary Executive Vice President of the Company Member of the firm of Brown Brothers Harriman & Co. President of the Company Chairman of the Board of the Company Member of the firm of Hallgarten & Co. Chairman of the Executive Committee of Guaranty Trust Company of New York Chairman of the Boards of Directors of The National City Bank of New York and City Bank Farmers Trust Company President of Greene Cananea Copper Com pany and Inspiration Consolidated Copper Company 1926 1933 1937 1930 1911 1941 1936 1940 1935 700 1.000 514 14.400 100 4.0CO . ICO 10 505 No t e A: Mr. E. Roland Harriman is also the owner of 50% of the outstanding stock of two corporations which ' ' - in the aggregate 5,015 shares of common stock of the Company. PNYC 00010203 In t o b ma t io n a s t o RESibNEBAfioN a n d In d e b t e d n e s s o f Diu c t o s s a n d Of f ic e b s The aggregate amounts o remuneration received from the Company and its subsidiaries by each person who has acted as a Director during the fiscal year ended December 31. 1942. by each person nominated for election as a Director, and bv each person who has acted as an officer but not as a Director and who has received payments of remuneration totaling more than $20,000 during such fiscal year, are as follows. (the amount stated being before payment of Federal and tate income taxes by the respec tive recipients): Capacities, in WbieS Reauoerattoa Was Received Aggregate ReauneraisOD paid Sy Company and Subsidiaries Dur.b? Fiscal Year 19*2 Excess Over Total Amount .n Remur.eraiain During Fiscal Year;9-*l johnA. Coe Robert E. Dwyer As a Director , and Chairman of the Board of The American Brass Company As Executive Vice President of the Company, as a Director and Vice President of Chile Exploration Com pany, as a Director of Chile Copper Company, Andes Copper Mining Company, Greene Cananea Copper Company, International Smelting and Refining Com pany. The American Brass Company. Butte Water Company, Butte, Anaconda & Pacific Railway Com pany, National Tunnel & Mines Company, Anaconda Wire and Cable Company and Chile Steamship Com pany, Inc,, and as an employee of Anaconda Sales Company 3 66.240.00 96,930.00 $ 7.440.00 3,039.98- E. Roland Harriman Director 1,000.00 100.00 James R. Hobbins As President of the Company, as President and a Direc tor of ; Chile Exploration Company, Andes Copper Mining: Company and Butte Water Company, and as a Director of Chile Copper Company, Greene Cananea Copper Company, The American Brass Company, Butte, Anaconda & Pacific Railway Company, Inter national Smelting and Refining Company and Chile Steamship Company, Inc. 131,516,00 8.233.32 Cornelius F. Kelley As Chairman of the Board of the Company and as a Director and Chairman of the Boards of Chile Explora tion Company and Andes Copper Mining Company, and as a Director and President of International Smelt' ing and Refining Company and Butte, Anaconda & Pacific Railway Company, as President of Anaconda Sales Company, and as a Director of Chile Copper Company, Greene Cananea Copper Company, The American Brass Company and Butte Water Company 201,356-00 8,473.33 Maurice Newton Director 1,000.00 200.00* William C. Potter Director 600.00 100.00* Gordon S. Renttchler Director 800.1 400.00* William D. Thornton As a Director and President of Greene Cananea Copper Company, and as a Director of Chile Exploration Com pany, Chile Copper Company, and Raritan Terminal and Transportation Company Daniel M. Kelly As Vice President of the Company and Butte, Anaconda & Pacific Railway Company * Indicates decrease. 39,220.00 55,000.00 5,226.67 6,666.72 PNYC 00010204 Name Frederick Laist Clyde E. Weed James Dickson \V. Kenneth Daly Capacities WtnaWs RhieccheiRveedtauoeratioo Remuneration pasdsiT Consp*B7 ar.ri Subsidiaries DurtRT FiscaJ Year 19*2 As Vice President of the Company in Charge of Metal lurgical Operations, as a Director and Vice President of International Smelting and Refining Company and as a Director or National Tunnel & Mines Company As Vice. President of the Company in Charge of Min ing Operations, and as' a. Director of Chile Exploration Company, Chile Copper Company, Andes Copper Mining Company, Greene Carianea Copper Company, International Smettlng and Refining Company and National Tunnel & Mines Company As Secretary and Treasurer of. trie,,Company, as Direc tor. Secretary sr.d Treasurer Of jutte Watpr. Company, and as: Director of Andes Copper Mining Company, Butte, Anaconda 5: Pacific Railway Company' and Anaconda Wire and Cable Company As Comptroller of the Company and Chile Exploration Co'mpgpyI:-^hdes'Copper .'Miffing'.Company; Interna tional Smelting and Refining;Company, The American Brass Company, Basic Magnesium, Incorporated, and as Director of Anacpttfia wise afiti Cable Company S66.300-00 64,308.30 44,966.00 37,010.00 Ex:ass Over Tatii Amount of Remuneratoin Dunnj Fiscai Year '.9*\ 5 7,336.68 10.404.98 5.686.68 5,706.72 No Director, officer or nominee was indebted, tip the Company and its subsidiaries during such fiscal year, except Mr. Cornelius F- Kelley, the largest ampUnt of whose indebtedness to the Company out standing at any time during the year was $:lf,665,33, i^hich syab paid during the year with interest at 5'yo per annum, and Mr. Jatjie^ .R.' Hobbins. the largest amount of whose indebtedness to the Company outstanding at any time during1 the year was $l5,000j: which was paid prior to the date hereof without interest. The aggregate amount of remuneration paid during the fiscal year ended December 31, 1942, bv the Company and its subsidiaries, directly or indirectly, to the Directors and officers of the Company consi-ered as a, group, was S826.246.30. Rj -mu n e s l a t io n or Emp l o y e e s Set forth below is a table showing the number of employees of the Company and of its subsidiaries, other than officers and Directors, ol the Company, who, on an accrual basis, received from the Company and its subsidiaries during the last fiscal year remuneration in excess of $20,000: Number of Eaolone* 25 6 None In Ejcem of $ 20,000 50,000 100,000 Received But not Mon Tbaa $ 50,000 100,000 -- Received $710,172.81 352.086.67 None Re mu n e k a t io n o p Ot h e r Pe r s o n s The following named persons (other than Directors, officers or employees of the Company) received aggregate remuneration from the Company during the last fiscal year in excess of $20,000 for services in the capacities described: Nmm Amount Cumcitv Chadbourne, Wallace, Parke & Whiteside $50,000* Pogson, Peloubet & Co. 31,300** " Also received from subsidiaries for legal services during the year 593,000. "Also received from subsidiaries for auditing services during the year $123,202.50. Attorneys Auditors Nu mb e r o p Sh a e e s Ou t s t a n d in g The Company has issued and outstanding 8,674,338 shares (excluding shares held in treasury jr through subsidiaries). The Company has no knowledge of any stockholder owning beneficially more than 10V<j of the outstanding common stock of the Company. PNYC 00010205 In t e r e s t o f Dir e c t o r s , No min e e s f o r El e c t io n a s Dir e c t o r s e n d As s o c iat es in Ma t .t m Tr a n s a c t io n s w it s t h e Co mp a n y a n d Su b s id ia r ie s At January 1, 1942, there were outstanding $20,000i000 principal amount of serial promissory notes of the Company dated April 11, 1940, bearing interest at the rate of 1 per annum, with varying maturities to April 11, 1945, issued undo: an Agreement dated March 28, 1940. between the Companv arid guaranty Trust Company of New York, The National City Bank of New York, City Bank Farmers Trust Company and The Chase National Bank of the City of New York. Of these notes S8.000.CCO principal amount were owned by Guaranty Trust Company of New York, of which Mr. William C. Potter, a Director,'is Chairman pf the Fjxecurive Committee, and S8sOCO.OOO principal amount thereof were owned by The National City Bank, of New York, of which Mr. Gordon S. Rentschler, a Director, is Chairman of the Board. The entire S2O.CXX5.0O0 principal amount of notes was paid with accrued interest during the year 1942. '[During the year, 1942 $935.000:principal amount of Sinking Fund Debentures of the Company due. October i. 1950, issued under the Indenture dated October 1. 1935 (being the total amount out standing), werp: redeemed by operation ot the sinking fund. Guaranty Trust Company of New York was Trustee! under said .Indenture, William D. Thornton, a Director of the Company, is also President and a Director of Inspiration Consolidated Copper Company. The Company and one of its wholly owned subsidiaries are the owners oi a total:of 333.000 shares, or 28.17%, Of the outstanding stock of the Inspiration Company, and Sl.665,000 principal amount Of its First Mortgage Convertible 4% Bonds, due April 1, 1952, out of a total oi $3./37.CXO principal amount thereof outstanding at December 31, 1942. The Inspiration Company has no smelting and refining facilities and its entire production consisting of copper concentrates, cement copper, mine, precipitates and electrolytic copper cathodes is delivered to International Smelting and ReBtirig.'Company, k wlkiliy Subsidiary of thp Company, pursuant to agreements (which are subject to cancellation upon 90 days' notice) under the terms of which the Smelting Company is required to return to the Inspiration Company either blister copper in the form of anodes or electrolytic refined copper in commercial shapes, subject to the charges provided for in said agreements. Ot h e r Ma t t e r s The Company has no knowledge of any matters other than the election of Directors which will be presented at the meeting. The persons named in the Proxy will use their own discretion in voting with respect to matters which are not determined of, known at the date hereof. An n u a l Re p o r t t o St o c k h o l d e r s The Annual Report to Stockholders, containing a Consolidated Balance Sheet at December 31, 1942. and a1, Consolidated Income and Surplus Account for 1942, together with other information respecting the operations of the Company, accompanies this Proxy Statement and related documents, but is r.ot to be considered as a part of the soliciting material. Ex pen s es or So l ic it at io n Tjhe cost of preparing, assembling and mailing of the Proxy Statements, Notice of Meeting, form of Proxy and accompanying documents will be paid by the Company. The Company will pay brokerage firms knd: other persons holding stock in their names or in the names of nominees for their expenses in distributing proxy material to the beneficial owners of such stock. All solicitations of proxies in the form accompanying tins Statement by or on behalf of the Company will be by mail, but the officials of the Company may personally solicit proxies from brokerage firms and a few of the larger stockholders, for the doing of which they will not receive any compensation in addition to their regular compensation. The cbst, if any, of such personal solicitation will be nominal. April 10, 1943. By Order of the Board of Directors of ANACONDA COPPER MINING COMPANY CORNELIUS F. KELLEY. Chairman of the Board. PNYC 00010206 Ilf 8 S' | Jj g5 *, B =.1 >s O S $' a fr -s 5 SV t |>-5 2;- c/> J| !*- O OLO 1 1!>- o: s s t a Z 1i |I "* t < 5? T# C/) *t' *0 2 2 S g -g U*}i; =;>":'''4JjS B-- s < Is" T--5 *:| ,"o u o .z 3 ; ,: II . 'CJ, Zi 4a < -IfWe': sj : <r 1 -Si -1 o i Bii a 8 * if 8. IS 1 i 3 iI 11 8 f. j0?w5*i . S"5: V 'w = =1 2 r, Cfi 3: j J "US - I.Sis I1 S' ^ rt * ll 2" 21 Q. a 2 5 .ill Cw03 -aao $ 4| |.l 1- *j I ' a 5 Eo . I k' ? So sz 2'' '*- j K% 8s so | 1I o I I'i0 15 >r- i? i s I <z 3ij lW| l a4 B iM ' o 51? a t s .2 1 1" ||1 jt 1 l-fi J fefi ~ I i;rZ "* f t o !.l 11 O.Q !S > I^ ** a 1 *1 iS1 ^ !o iJS~. . s- 3 < i I1f| 111 i itm isi 's .2 2 - c I * " "| -2 11 ' 3 C" 0 ~ o>. I1 PNYC 00010207 "" KZMszqrasasaBesRj faBOTCTKE5Eara!saOTaH g <9 X jL~ B iS V s.5.f x c. < s0 >- 1S S'4 c. r i1 >5 1 1^ I r 3 1>- 4. O3: "wT |8V O j?.S oil I a: g-= < Si' I : S o u oz CS u a. & o S- U. S ' *f g" uiai P: IIIII | a 2S S S' 81 tfj i< t* u u: Q,' 2;. 8, S S Sl:l=> 'gi ': DSL > ^1'; | j vi rtVil' ;': :i III? | d oz ii": I !% sS 5 sJI CT 8 * U 3 ir, w S < O, ? I o SI S? s** _ffl sD 'C* i Sa 'Bo ij ~2 '& s: z g *toJSB-: < iiifl -^' ;! P;, TSi I' g.il-5' II *1 111 -.2~* s5 :! b ^ :,2 a!g ft I* 3 | **J*I 31 ss J i PNVC 00010208 An a c o n d a Co p p e r Min in g Co mp a n y bo A Th e Ame r ic a n Br a s s Co mp a n y General Offices: Waterbary, Connecticut LOCATION OF MANUFACTURING PLANTS ANSONIA. CONN., 9UFTALO, N. V , DETROIT, MICH- KENOSHA, WIS- TQ8RINGTON. CONN . WATERSUfiY, CONN. ANACONOA AMERICAN 36ASS LIMITED, NEW TORONTO, ONTARIO. CANADA Air-Conditioning Automotive Aviation Building SOME OF THE INDUSTRIES SERVED Chemical Electrical Equipment Hardware Heoting Jewelry Light and Power Machinery Mining Petroleum Plumbing Pulp and Paper Railroad Refrigeration Shipbuilding Textile Welding PRINCIPAL PRODUCTS COPPER, BRASS, BRONZE AND NICKEL SILVER--SHEETS, WIRE, RODS, TUBES Airplane Gat, Oil and Pressure Lines Ammunition Metal Brass and Copper Pipe Brating Solder Bronte Screen Wire Bus Ban and Shapes Cartridge Discs and Cups Condenser Head Plates Condenser and Heater Tubes Copper-Nickel Alloys Copper Tubes and Fittings Drawn Sections Everdur and Super-Nickel Tank Plates Extruded Shapes Eyslets, Grommets, etc. Flexible Metal Hose and Tubing Free Cutting Brass Rods Phpsphor Bronte Pressure Die Castings Hot Pressed Ports Shell Rotating Bands Tobin Bronte Shotting Turbine Blading Welding Rods The continuation of World War II placed upon The American Brass Company increased responsibilities in meeting demands of our country lor products essential to the winning of the war. No effort was spared to meet the requirements of our armed forces and these of our allies. New production records were achieved in all plants of the Company, its Canadian subsidiary and in the management and opera tion of the three government owned plants. with altered requirements for different types of ammuni tion and supplies, the Compony was able, due to the flexibility of its facilities and the great diversification of its products, to meet the changing demands. Research, carried on by the Company undet the im petus of war conditions, has made greed Prides in advanc ing the progress of copper alley metallurgy. Th developments assure a continued and expanding market for copper and its alloys when the well-known "Ana conda" product may again be supplied to a world at peoce. anas arcs.a at l o c at ed in t h e f o l l o w in g St. Louis, Mo. San Francisco, Colif. Seattle, Wash. Syracuse, N. Y. Toronto, Canada Washington, D. C. 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 the Year Ended December jr, 1943 To the Shareholders of Anaconda Copper Mining Company: The gross sales and earnings of the Company upon a consolidated basis (after elimination of inter-company items) totalled....................... Other income, including dividends from non-consolidated subsidiaries, was..................................................................... #444,745,935.70 1,163,303.37 making total gross income.................................................... The cost of sales, including all operating expenses, develop ment and maintenance charges, repairs, administrative, selling and general expenses and all taxes, except income taxes, amounted to........... ..................... $367,092,706.05 Provision for depreciation and obsolescence and for deple tion of timber lands, andphosphate deposits amounted to............................................................... 12,385,668.02 $445,909,239.07 making total deductions from gross income......................... 379,478,374.97 United States and foreign income and excess profits taxes amounted to............................................ $ 29,387,232.95 Provision for contingencies was................. 3,000,000.00 66.430.864.10 making a total of.................................................................... 32,387,232.95 Net income, without deduction for depletion of metal mines, was............................................................................................ Of which minority share amounted to.................................... $ 34,043,631.15 282,830.13 Leaving consolidated net income of......................................... $ 33,760,801.02 2 N11771.01 PNYC 00010210 iml* ".t I Gross income increased $35,704,023.94 or 8.70% over 1942, while net income decreased $2,703,229.24 or 7.41%. Profit per share, without deduction for Capital Depletion of Metal Mines, was $3.89, compared with $4,20 in 1942. Decrease was caused by higher costs in all departments due to shortage of labor, wage increases, higher cost of supplies, etc. Dividends on the capital stock of your Company amounted to $21,685,845, or $2.50 per share, continuing the same rate paid in 1941 and 1942. Current assets as of December 31, 1943, amounted to $193,944,181.59, of which $99,652,335.03 was in cash and Government securities. There is no indebtedness except for; current ra|:eounts an:d, wages $14,844,401.76 and accrued taxes $36,456,342.52, a total of $51,301,244.28, leaving net current assets of $142,642,937 31 or $18.44 per share, an increase of $22,473,210.30 for the year. Consolidated Surplus Account .was decreased by the amount of $23,653,717.88 in order to parry ion the consolidated balance sheet of the Company the assets and liabilities of ail subsidiary companies upon a uniform basis. (See financial statement, page 12). Met income as heretofore is based upon invoices to customers. Materials sold but not delivered are inventoried at the cost of various metals on hand and in process, such values being below prices in effect December 31, 1943. Renegotiation of Government contracts with The American Brass Company for the :year 1942 resulted in a settlement in the gross amount of $10,600,000 whjch was paid during the year 1943. The net decrease, after tax adjustments, in income of the Company for the year 1942, amounted to $2,150,850, Provision for such renegotiation having been made in the consolidated income account for the year ended December 31, 1942, no adjustment was required in the 1943 income account attached hereto. Pro vision believed to be adequate for possible renegotiation for, 1943 has been made in the consolidated income account for the: year ended December 31, 1943. STATUS AS OF DECEMVER Sin EACH TEAS NET CURRENT ASSETS 1 1 an f i i i 1 1 i i 11 i i i i i 1 1 ii i i i i i i 1 1 III! i i i i 1 III! i i i i i 1 1 nil i an i m m in i a a 11 in 3 ] Go v e r n me n t Bo n d s The Company and its subsidiaries had on hand at the end of the year United States Government Securities of a par value of 840,161,000. During the year purchases amounted to 841,510.000 par value. Part of these securities and those on hand at the beginning of the year matured or were applied to the payment of Federal income taxes. The Company's Canadian subsidiary purchased 82,000,000 in Canadian bonds during the year, with a total on hand at December 31, 1943, at cost in Canadian cur rency 33,730,375. Ca p it a ^. Ex p e n d it u r e s less sales of capital assets in 1943 amounted to.. as follows: Mines, Mining Claims and Lauds................................................ Buildings,. Machinery and Equipment at the Mines, Smelting, Refining and Manufacturing Plants of the Company and f# subsidiaries........................................................ $4,114,433,26 $ 497,715.19 8,320,838.82 $6,818,553.81 Less Sales (Book Value)................................................................ 2,775,166.57 A net. increase Of............................................................................. Miscellaneous--Including acquisition of shares of stock of subsidiary companies................................................................. $4,043,387.24 71,046.02 Co r p o r a t e Tr a n s a c t io n s During the year the Company increased its holdings in shares of subsidiary com panies by purchase of 81 shares of stock of Andes Copper Mining Company, 66 shares of Butte Water Company and 900 shares of National Tunnel & Mines Company. These transactions increased Company holdings to 3,502,514 shares (97.77%), 119,650 shares (99,87%), and 606,432 shares (57.41%), respectively. Op e r a t io n s While every effort was made to maintain operations at maximum levels practically all departments in the United States were affected by a critical shortage of labor. Thi3 situation was relieved to some extent at the domestic mines by furlough of soldiers by the United States Army and by a "Miner's Training Program" which prepared inex perienced men for work underground. Most of the plant improvements begun in 1942 were Completed and aided materially in maintaining production and offsetting increased costs. Facilities were installed at Anaconda, Montana, for the treatment of waste products accumulated from previous operations which will add approximately 25,000,000 pounds of copper per year to production. Construction of additional plants for in creasing production of copper by Chile Exploration Company and Cananea Consoli dated Copper Company, S.A., referred to in the report for the prior year, is proceeding satisfactorily and should be completed during the current year. The shipments of products from The American Brass Company's plants increased in volume and established a new production record. Approximately two-thirds of the copper and brass manufactured products of the Company were for munition purposes. The balance, in maby forms and shapes* was used to meet other war needs, including the requirements of aviation, chemicals, shipbuilding, oil refining, power plants and other ossential industrial uses. To meet the expanded war production program additional equipment was installed in the various manufacturing plants of the Company. Because of a demand in excess of the casting facilities of The American Brass Company, the copper refineries at Great Falls, Montana, and Perth Amboy, Xew Jersey:, were fitted: to: produce gilding metal, an alloy of 90% copper and 10% zinc. These plants produced approximately 25,000,000 pounds per month of this metal in the 'form of billets and cakes which were shipped to plants of The American Brass Company for fabrication into munition components. The re-conversion of manufacturing plants from wartime to commercial production has received constant study and plans have been made to accomplish, this objective quickly amd;.,witli;:gB(inimxmB,,ol'.untojference''with commercial output when the war's necessities cease The transition for the most part will involve the removal of special equipment and the re-installation of brass mill finishing equipment now held in storage. An intensive study is currently being made of future requirements for copper and copper alloys. A study of the post-war plans of leading manufacturers has indicated that with relatively few and unimportant exceptions pre-war uses for copper and brass products will be continued. Ak mt -Na v t "E" Eleven individual plants of Anaconda Copper Mining Company and subsidiary companies have received the highly-prized "E" award with twenty-two renewal stars which, if earned, are given at six-months' intervals for continued excellence in aiding the war effort on the production front. NOTE: On March t, 1944, the Anny-N*ry "E" wu awarded to two additional plant* of Anaconda Wire and Cable Company at Muskegon and Sbeiby, Michigan. The latter plant oonasti of leased premise* to supplement the operatives at Muskegon. Renewal stars were awarded on March U, 1944. to the Anaconda Reduction Works. Anaconda. Montana, to the Great1 Falls Reduction Works. Pr o d u c t io n Copper production of the Company and its subsidiaries was maintained notwith standing an acute manpower shortage in the domestic mining areas and was approxi mately one-third of the total supply of; primary copper available to the United States. Production of the electrolytic zinc plants reached an all-time high, approximating onefourth of the Nation's output from all sources. Large tonnages of foreign concentrates were treated for the account of the Metals Reserve Company, which together with custom ores and concentrates furnished the principal supply. As a result, the production of (copper and manganese, for which there was & more urgent demand, was given prefer ence in the placement of the available men at the Butte mines. A small amount of zinc 5 ore was produced during the year, coming principally from Exploration and development work. It is now permitted to publish production of the principal non-ferrous metals during the past two years, which for convenience of comparison is tabulated as follows: Copper Total Output--Founds.................. . 19iS m2 1,296.807,140 1,280.468.753 By-product materials sold to others: From Company mines......................... From other sources....................... 319,973 * 305,724 517,701 161,114 Finished,Copper.............. ............................... From Toll................................ -......... .. From Purchased ores, concentrates and secondary metals.................................... 1,296,3$81,.443 249.425,9~~7~0 22,548.932 1,024,406,541 1,284,789,938 238,810.670 16,310,313 1,029,868,955 Zinc Total Production--Pounds........................... 514,624,263 415,332,941 From Toll. , . .............................................. From Purchased materials........................ From Company mines................................ 331,240,556 172,738,773 10,644,934 142,180,971 219,327,637 53.824,333 Contained in by-products sold to other companies.................................................... Zinc Dross....................................................... Produced on toll for the Company by others. Secondary Material........................................ Electrolytic Zinc at Company Plants.......... 15,222,585 5,612,380 14,702,883 3,914,534 475,171,881 9,709.309 2.369,091 11,849,739 4,431,525 380,973.277 Lead Total Production--Pounds........................... 70,951,157 75,020,192 From TbU................................ ................... From Purchased ores, concentrates and other materials........................................ From Company mines............................... 1,876,876 73,409,662 1,664,819 68,020,927 7,005,265 Contained in by-products sold to other companies................................................... Produced in metallic form........... .............. 23,115,618 58,835,539 28,860,780 46,165,412 Silarr Total Production--Ounces............................ 13,869,220 15,418,256 From Toll.................................*................. From Purchased materials........................ From Company mines................................ 23,895 6,009,689 7,835,638 38,077 5,989,888 9438,811 Contained in by-products sold to other companies.................................... ................ Produced in metallic form............................. 2,287,818 11,801.404 2,724.577 12,691,679 6 .V'it-'-4 ; ijffcJLv-a; .J r/'Jk-AJEg!Jr.'t Gold Total Production--Ounces............................ From Toll............................................ From Purchased materials........................ From Company mines............................. Contained in by-products sold to other companies............................................ .. Produced in metallic form............................. Afanjanese Nodule Production--Long Tons.................. Assav--Jin...................................................... Arsenic--Short Tons...................................................... Cadmium--Total Production--Pounds................... Molybdenitc^Voxmds. .. ................................................ Treble--superphosphate and phosphoric acid--Tons.. . Lurhber--`Feet.................................................................. I9i3 137,852 2.793 82,125 52,934 162,133 4,766 91,026 66,341 11,233 128,619 14,455 147,678 114.327 6},12% 10,212 2,262,332 3,674,990 59,421 106,833,090 107,313 60.14% 9,798 1,589,886 3.340.214 63,090 126.313,960 Other miscellaneous products were bismuth, gallium, indium, nickel sulphate, palladium, platinum, selenium, tellurium, tin, vanadium red cake precipitates, white lead and line 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 1,461,118,879 pounds, an increase of 3.36% from the record established in 1948. In addition shipments from the Fabricating plants operated for Government account in excess of shipments of manufactured products from Company departments to those plants amounted to 379,882,711 pounds, making combined total of 1,841,001,590 pounds or is.30% more than during the prior year. Emp l o y e e s During the year 1943 the average number of employees of the Company and its consolidated subsidiary companies was 56,780. Of these, 38,064 were within the United States, compared with 37,442 in 1942. Purchases of War Savings Bonds with par value of 814,977,500 were made in 1943 by 89.72% of the employees in the United States. As of December 31, 1943, total employees of the Company including its noncqnsolidated subsidiary companies numbered 61,828, in addition to which employees in Government properties operated by the Company numbered 8,691, making a total of 70,519. At the end of the year, 11,420 employees of the Company and its subsidiary com panies bad entered the military service of our Country or our Allies. 7 Gr o u p In s u r a n c e The Group Insurance at the close of the year amounted to $73,662,095, covering 38,908 employees. The amount of insurance paid to beneficiaries during the vear was $805,836, '- Nu mb e r o f Sh a r e h o l d e r s The number of registered shareholders appearing on the transfer books of the Company at December 31, 1943, was 116,400 compared with 115,974 at the beginning of the year. Chromium: Go v e r n me n t PROjfcCTS T W 'flW 'W ,r rrr: As stated in last year's report, the Benbow Mine in Stillwater County, Montana, was successfully developed and operated for the account of the Government. The second unit of the Benbow Mill and the mill at the Mouat-Sampson property were practically completed and were in partial operation during the year. The demonstrated capacity of the two mills was 8,000 tons of ore per day, and are capable of producing about 500,000 tons'.of chromium concentrates per year. All estimates made by the Company for the Government were realised. Due to the reopening of lines to Sources of foreign supplies and to the accumulation of stocks in the United States considered by the Government to be ample, the Government decided to suspend operations late in the summer of 1943. At the request of the Company, the contracts with the Government Agency were cancelled as of January 1, 1944, with the understanding that if chromium production is needed at a later date, Anaconda will, if requested bv the Government, again take over the operations of these properties. Magnesium: Anaconda has been given due credit by Government Agencies and has been specifi cally commended by the United States Senate Special Committee to Investigate th> National Defense Program in its report on magnesium released March 13, 1944, for bringing into successful operation the largest magnesium plant in the world at Las Vegas, Nevada, together with the magnesite mines and mills located at Gabbs, Nevada, about! 300: miles distant. Management control was assumed late in 1942 at the request of the Government. Work proceeded rapidly and by July, 1943, all ten units were completed and producing magnesium at rated capacity. Since then production has exceeded rated capacity and unit costs have been and are still being reduced. Improve ments made and others planned will result in decreased consumption of such important items as peat and chlorine, besides effecting considerable savings in mining, transporta tion, preparation and handling--still further reducing cost of production. Shortly after the end of the year the plant had produced 100,000,000 pounds of metallurgical magnesium and was operating at the rate of more than 116,000,000 pounds per ivear. Brass and Wire Mitts: The ammunition brass mill at Kenosha, Wisconsin (owned by Defense Plant Corporation), together with the ammunition brass mills located at Toronto and Montreal ..owned by the Canadian Government), which are operated by The American Brass Company, and the special wire plant at Marion, Indiana (owned by Defense Plant Corporation), operated by Anaconda Wire and Cable Company, ran continuouslv throughout the year in a successful, manner. Operation began "in April 1943 of an additional special wire plant at Sycamore, Illinois, operated for the Defense Plant Corporation by Anaconda Wire and Cable Company. These plants furnished more than 230,000 tons of war materials to our Armed Forces and to those of our Canadian Allies. Columbus, .Yebraska: At the request of the Government, and under a "Letter of Intent" from the Defense Plant Corporation the Company completed designs for an Aluminum and, Magnesium JxitrusiOni Plaht to? l>e constructed ,upd,n-a site to be acquired: by! tire. Government near Columbus, 'Nebraska. However, it having been ascertained, by the Government that fadilitlfeelilreddy installed for similar prOducUon1 were, adequate for requirements, con struction of this and two other similar plants was ordered suspended. Fin a n c ia l St a t e me n t . 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 a^ the close of business December 31,1943, together with a Consolidated Income Account and a Consolidated Surplus Account for the year, certified by Messrs, Pogson, Peloubet Si Co., Certified Public Accountants. By Order of the Board of Directors. CORNELIUS F. KELLEY, Chairman of the Board. JAMES R. HOBBINS, President. New York, N. Y., April 8, 1944. f 1 0 An a c o n d a Co p pe r Min in g Co mpa n y and Subsidiary Companies Consolidated Balance Sheet--December 31, 1943 ASSETS FIXED ASSETS: Mines and mining claims, water rights and lands for metal producing and manufacturing plants-- see note F.._.............................. .............................................;.........-............................................................... Timber la!nds and phosphate deposits-- i note F........ Less reserve for depletion.,..... ......... f *539.693.772.65 6..487.406.77 ,389,989.74 3,717.417 03 Buildinga and machinery at mines, reduction works, refineries* manufacturing plants, sawmills, foundries, waterworks and railroads (.including railroad concessions to the extent of 8709,833.73) --see note Fi..................... ............................................... ....................................................-........................ 8311.323,331.33 Less reserve for depreciation................................................ .......... .............................................................. 199,494.183 21 U1.S29.448.32 Patents........................................................................ -......................................................................................... 1.001.00 Investments: Securities of subsidiaries not consolidated--see notes C and F........................................................... 8 17,371,701.81 Other Security investments, less reserve see note F--................... -......-............................................ 13,880,806.83 Indebtedness of subsidiaries not consolidated--not current......................................................... ........ 2,339,333.34 FUNDS PROVIDED BY GOVERNMENT AGENCIES for construction and development or opet|Btioa[of metal producing and manufacturing facilities, expended or on band.-------- ------- ----- ----- 8408,833,300.80 18,783,103.33 DEFERRED CHARGES: Mine development--see note GPrepaid expenses;................. ....... Deferred expenses...... .....-............. 8 8.393,940.73 391,744.48 2S6.288.7S CURRENT AND OTHER ASSETS: Current Assets: Supplier on hand--see note E..~........... Metals and manufactured products: In process1-see note D...............--... Finished-" see note D______________ Account* and note* receivable--trade, lea* reserve--...... Indebtedness of subsidiaries not consolidated--current-- United States and rGovernment securities------Cub----- ___-------------------------------------- ------------------------- Other Aeeeta: Installment land talas and other accounts receivable, less reserve. Advances to sundry mining companies, including advances on ores, less r Cupriferousmateriel being currently treated--ms note H____________ Postwar refund--United States and Canadian excess profits taxes--estimated.. Sec explanatory notes, pages 13 and 14. 8 23,139,111.62 6,242,844.34 31.617,308.47 30.740,176.24 302,404.79 45,499,683.63 36,182.630.30 8 1,711,127.19 182,197.02 276,243.41 2,173,407.76 1633.111.717 59 An a c o n d a Co p pe r Min in g Co mpa n y and Subsidiary Companies Consolidated Balance Sheet1--December 31, 1943 LIABILITIES CAPITAL STOCK of Anaconda Cupper Mining Company: Authorized--12,000.0,00 shares, of the par value of 350 each Issued,.................... ................ ---.......................................................................................... S.919.086 shares Held in treasury or through subsidiaries......................................................................... 244.748 shares Outstanding................. ,.......................................................................................................... 3.674.338 shares CAPITAL STOCK AND SURPLUS of consolidated subsidiaries owned by minority interest-- ADVANCES BY GOVERNMENT AGENCIES For construction and development or operation of metjil producing and manufacturing facilities..-------------------- ---------------------------------- , _.. .. HW.93-MOO.uO 12.33T.400.00 H33.7l6.9on 00 4.701.326 30 13.T55.103 53 RESERVES: For workmen's compensation insurance. For contingencies________ __ __________ $ 1.913.281.60 4,400,000.00 6.313.261 60 CURRENT LIABILITIES: Accounts and wages payable----------------------------------------------------------- ---------------- Accrued taxes--*see note K.-r. ... .................... ................ ....... ......... ------ * 14,844,401.76 ......... 38,456,842.54 51,301.244.28 DEFERRED CREDITS TO INCOME. a SURPLUS. See explanatory notes, pages IS and 14. 11 S84.235.S1 119.539.653.76 *635,111,717.26 An a c o n d a Co p p er Min in g Co mp a n y and Subsidiary Companies Consolidated Income Account--Year Ended December 31, 1943 Grow sales and earnings.......................... ............................ ......................................... ................ Other incotde; Dividend* from subsidiary not consolidated...,.... ..................................... _........................................ | Other (dividend* interest and miscellaneous income..:......................................*..................... ...... 873,781.37 1,163,303.37 Cost of sale*--on last-in, first-out basis--operating expenses, development, maintenance and repair*, *445,909.239-07 administrative, selling and general expenses and taxes, except income and profits taxes...... ............. 367,092,706.05 Provision for depreciation and obsolescence...... .................................................................... ................... ..... U.231,031.15 Provision for depletion of timber lands and phosphate deposits (not including depletion of metal miaea).~--............-................... -...................... ...................................................... .................................. . 134.637.77 379,478.374.97 % 66.430,864.10 Cnited State* and foreign income and profits taxes--estimated, including *4,500,000 provision for United SS<tate* excess profits tax, net, after deducting credit for postwar refund.. t 29,387,231.95 Provision for contingencies... 3,000,000.00 32,387,232.95 .Vet Inconm. without deduction for depletion of metal mines_____ * 54,043,631.15 Minority shad* of income.................................................................... ...... iSi.S30.15 Consolidated Net Income, without deduction for depletion of metal mines.... 4 33,760,801.0t Consolidated Surplus Account--Year Ended December 31, 1943 131,600,456,8# 551,141.20 1131.108,415.6# NOTES TO CONSOLIDATED BALANCE SHEET-DECEMBER 31, 1943 NOTE A--PRINCIPLES APPLYING IN CONSOLIDATION la orUde7r3t%o 9brrem*Domt tbotf'.tihtetuim3 eofdthsetoCcko.mtipeany*'stsinteenredsltiaiabisliutibessidoiaf r^ie s .sbe,rBa trhiedinft^errerstr!SlM<Siw!5tw^,...?!,,-TM^. 1l1. "*.1, . ... , *TM distributed ipder eppropriete.heedags on the Consplideted Belenoe Sheet; tegeth^trdtoteSj oArowrtv'^S't and fctfaouttatb,bam deembed in note F, except thet foal mnl) inbsidieHes more then 73% oined Ure ml? h aronot^tt .nteirel pert of: the operations of the consolidated gfoup, are Carried as ineestmeata in: the ConsoUdaSTBai^^ oTbheti.n,te^Arecsctooufnttsomofosmubyssidtoiacrkiehsoldetresboiefhsuthbs._idCiaorimesp, .tnbye.aicncteoruenstts ios fIrweh, itchhaanre7dc%onsoofliSdatSed, iislSshoSwn on tnheot ranSditS ?? shares owned .in these subsidiaries- are earned as investments in the Consolidated Balance Sheet The term intended to mean corporations m which a majority of the voting stock is owned directly hy the Company'or through nth^^^aJ3 lions id!- which the stock interest of the Company is more than 95%. P7 0ugh otber ccr?or** NOTE B-ASSETS EN FOREIGN COUNTRIES Assets in foreign countries fall principally into^wogipups: those pf metal producing subsidiaries operating m Mexico and South Amerr, i^dL;!ip;ij|jBiijnn'ian:i{jii^jci^Uj^u^idiii^y';iii^^*^^ V- nc*' Of the net fixed assets *md investments as shown do the Consolidated Balance Sheet, approximately fifty-four per cent are located in ' Mexicckand South America* and less than oherhaif of one. per' cent, in Canada. Of the set current assets, consistine of current aiMjtii jiii^ieurrpatvliabilitiesi'vinciuded ip theCooaoHdated Balance Sheet, approximately three per cent, are located'in Mexico ahd,JSouth'Amenca and four; per cent, .are located in Canada. Cash balances in foreign countries amount to $1,751,8*0 70 md consist principally of working balances held in South America, Mexico and Canada. Of deferred charges and other assets approxi mately forty-six per cent, apply to operations in Mexico and South America and eight per cent, to operations in Canada. Fixediasseu'iniforeign- countnea are earned m United States dollars on the basis explained: ;in note F. Current and miscellaneous ssaets idjfjidptiiilflip^dh^^ South America ate carried in the accounts of those subsidiaries in United , brieihati^ in foreign .currencies,: ybiefais not significant. has been converted into dollars at tbo rte;jof eichange prtvailing at the date of the transaction. Current assets of the Canadian subsidiary have been converted at'i;thel;^^!^:'.(^dhaiqpBi current at December Si, 1943. NOTE C-EQUITY OF COMPANY IN UNCONSOLIDATED SUBSIDIARIES The equity of the Company m the assets of the principal unconsolidated subsidiaries (Anaconda Wire and Cable Company. Mountain City Copper Company and National Tunnel k Mines Company) and the four unconsolidated subsidiaries referred to in note A. as shown by their books, was in excess of the investment of the Company m such subsidiaries at December St, IMS in the amount of 14,063,298.41 but the cost of the shares of said subsidiaries shown as investments on the Consolidated Balance Sheet has not been adjusted for such difference. Of this amount ti.4M.404 23 represents equity in the undistributed earnings of such sub sidiaries since dates of acquisition, the remainder being differences at dates of acquisition. NOTE D--INVENTORIES OP METALS AND MANUFACTURED PRODUCTS The su-taUic contents of copper ores, concentrates, and cupriferous material* and ne and lead ores and concentrates, while in treatmeat at reduction plants up to the productionnof blister copper, electrolytic copper, metallic line and lead bullion, are classified as metals in process Blister and electrolytic copper, metallic line, lead bullion, and other products and metals produced in con* ooAion therewith or therefrom, including stock in works at fabricating plants, an Haw,find as finished. Inventory in process is calculated at cost which is below tbe equivalent of current market for metallic contest of such inventories. Finished metals and manufactured products on hand at December 31. 1943 (except silver, gold and molybdenite, which are carried at market quotations or leas), have been computed on the last-iru first-out, basil. Inventories on at December 31, IMi are earned at December 31. 1942 inventory valuations and accumulations tnce that date am valued at current costs. Inventory ra nations deterauned in accordance with the foregoinf method were beitrw market prieee for the various metals sad products at: December 31v 1943: NOTE E--SUPPLIES ON BAND Supplies on hand, including replacement pans as well as current supply items, are carried at cost. NOTE F--FIXED ASSETS--BASIS OF VALUATION (a) All property a carried on the bans of cost to the parent company, which is either (1) cash cost; or (t) where stock of the parent ::: company wasissued for property or for stock of subsidiaries, tbe par value of the stock of the parent company so issued; or (3);ls the case of securitM* of unconsolidated sttbatdiaries issued for property transferred by the Company or a consolidated subsidiary, cost of such property to tb* consolidated group leas depredation to date of transfer. Fixed assets of consolidated subndianer at dates of: first acmakHi in tbe consolidated balance sheet are carried at cost of the stock of such subsidiaries to the parent company after making proper allowance for, other arrets of such subsdiariaa. AH other assets of consolidated sub sidiaries set earned at cadi cost to tbe subsidiary. Other security invertnumts include 333,000 shares of Inspiration Conaolidated Copper Company carried at 99,915,107.51, bring the cost of such slock reduced by dividends received since January 1; 1941; and 9t.I88,OOO prindpei amount of First Mortgage Bonds of that company carried at par. A reserve has been deducted from tbe amount at which other security investments am earned equal to tbe cost of investments based on properties in Europe. IS (b) Pursuant to the requirement* ol the United State* Treasury Department, valuation* u of March l. 1919 of mining properties then owned have been recorded on the book* for the purpose of computing the amount allowable u a deduction for depletion in arriving at taxable income under the Federal income tax laws, but these values have not been reflected in the published account* of the Company. The Company has consistently followed the practice of not deducting in any of its published accounts, any amount for depletion on account of metals mined, and no such deduction is included in any of the financial statements submitted herewith. Depletion based da cost has, in the case of timber and phosphate lands, been deducted from income in the financial statements Submitted herewith and also from the cost basis' shown in the Consolidated, Balance Sheet. (c) The value* of fixed assets are: shown on the bases above set forth and do not indicate Current values which could be established only by current appraisals. VOTE Gr-MIN'E DEVELOPMENT These expenditures, cover development in connection with property of the .Company or subsidiaries and on leased properties. Mine development is written .off on the basis of ore' extracted'and the rate, is baaed on estimates of ore reserves. NOTE H;--CUPRIFEROUS MATERIAL Cupriferous ''material' being, Currently treated is carried at a valuation which is lea* than the current value of the recoverable metala contained therein. NOTE I--5URPLCS Included in Consolidated Surplus are (a) a credit of 920.S16,158.49. being the excess of the proceeds of the issue of 3.109.598.54 shares of stock of Company over the par value thereof and (b) a charge of 111.907,498.50. being discount and expense on issuance, and premium on redemption of bonds, redeemed through funds obtained by issuance of stock above referred to. See paragraph (b) of note F as to practice regarding depletion. NOTE J--CONTINGENCIES A reaerve for contingencies of 14,400,000 has been provided. Losses on sale of coal properties and write-off of advances to an uncon solidated subsidiary amounting to 12,946,750 have been charged to the reserve. NOTE K--FEDERAL INCOME AND EXCESS PROFITS TAXES United Sf!atex income and excess profits taxes for the taxable year* up to and including December 91, 1998 have bees determined by the United States Treasury Department and any amounts due thereunder have been paid. Audits of returns for subsequent year* havennot been completed by the United States Treasury Department. The reserve for Federal income and excess profit* taxes includes an amount to provide against possible liability to the United State* Government on renegotiation under the Sixth Sup plemental National Defense Appropriation Act, as amended, on sales of materials in the calendar year 1949. All payments due no renegotiation of contracts with the United States Government covering salts of prior yean have been made. NOTES TO CONSOLIDATED INCOME ACCOUNT--YEAR ENDED DECEMBER 31. 1943 Sales of metals and manufactured products are included in income as billed and delivered to customers. Undelivered sales contracts and purchase commitments are not given effect to in the Consolidated Income Account. The amount of sales has been reduced by the amount which it is estimated will be deemed excessive by the War Department Price Adjustment Board on renegotiation of certain contract* with the United States Government for the year 1943. Included in sales is the excess over the currently quoted price* of metals received in purruance of certain contracts and agreements with agencies of the United States Government. Intercompany sales and intercompany profits where these latter are material have been eliminated is the Consolidated Income Account. Depredation has been calculated on the same bass as is previous years except that in the case of The American Brass Company addi tional depredation based on the increased volume of operations has been provided. War facilities are being amortised at rates authorised by law. In the year 1949 the share of the Company in the combined net income (without, in the case of mining companies, making any pro vision for depletion of metal miaou of the principal unconsolidated subsidiaries (Anaconda Wire and Cable Company. Mountain City Coppor Company and National'Tunnel k Mines Company) and the four small unconsolidated subsidiaries referred to in note A, amounted to 8600,490.98, from one of which 9289.522.00 was received in dividends and is included in the Coaaobdsled Income Aocomrt. There is included in iacotae 818,972*580.99 as Anaconda Copper Mining Company's proportion of the income of its domartk and foreign operating in Mexico and South Amorce and 1282,570.10 of the earnings of thoe companies hae been apportioned to minority stockholders, ail of which income has been received in United States funds. There is inctaded Ul consolidated income 81,290,600.78 which is the equivalent (based on the average monthly exchange rets for the year) in United States currency of the net interne for the year 1943 of Anaconda American Brass Limited, a wholly owned Cana dian subsidiary, after adjustment resulting from the oonvenion of net current assets at rates in effect at December 91. 1649. No dividends were received from mid subsidiary during the year. 14 PNYC 00010222 POGSON, PELOUBET & CO. cxftTinss rtrtue a c c o c x t ah t i p e ic y w . POCSOK MAURICE Z. KLOUBST LEWIS 5. NORTON SIDNEY W. FELOUSET HOWARD L.GUYETT CRAWFORD C. HALSEY STEW YORK *. N. Y25 BROADWAY EX. PASO. TEXAS MILLS BUILDING c ac * AOOiMa.-CERTIFIED" vtw ri*B AGENT ICtOPt Ktuf. CSATTIIU * -.-3 LO-NOOW To the Board of Directors, Anaconda Copper Mining Company, 25 Broadway, New York 4, N. Y. We have examined the Consolidated Balance Sheet as of December 31, 1943 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 fori the calendar year 1943:, 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 Company and its subsidiaries and other supporting evidence, by methods and to the extent we deemed appro priate: Our examination was made in accordance with generally accepted auditing 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 United States Government, as to which we have satisfied ourselves by other means* The1 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 the mining of copper, zinc, lead, silver ana gold, and is in agreement Anth long established and consistently maintained accounting practices and pro cedures of this Company and its subsidiaries and others similarly situated, and the Company advised by counsel that such procedure is in accordance with legal requirements. In order to carry in the consolidated balance sheet the assets of ail subsidiaries on the same basis, that is, cost to the parent company in cash or in stock of the parent company at par value, 323,653,717.88 has been eliminated from consolidated surplus and from the appro priate consolidated asset accounts, of which 310,257,914.72 has been eliminated from corporate surplus of Anaconda Copper Mining Company and from its investment in Andes Copper Mmmg Company. These amounts were formerly carried in consolidated surplus and in the corporate surplus of Anaconda Copper Mining Company as representing the difference between the par value of the stock of Andes Copper Mining Company, Santiago Mining Company arid other consolidated subsidiaries issued for properties, and the cost to Anaconda Copper Mining Company of such stock. In our opinion,, the accompanying Balance Sheet and related Income and Surplus Ac counts, together with the notes attached thereto or appearing thereon* present fairly the consolidated position of the Company and its consolidated subsidiaries at December 31, 1943 and the combined results of their operations for the calendar year 1943, in conformity with generally accepted accounting principles which, subject to the foregoing, have been applied on a basis consistent in all material respects with that of the preceding year. New York, March 21, 1944. POGSON, PELOUBET & CO. Certified Public Accouniants 15