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ASARCO News


ASARCO REPORTS THIRD QUARTER RESULTS

New York, N.Y., October 23, 1995 - ASARCO Incorporated (NYSE:AR) today reported net income of $58.3 million, or $1.38 per common share, for the third quarter ended September 30, 1995, compared with a net loss of $16.1 million, or 39 cents per share for the third quarter of 1994.

Results for the third quarter of 1995 reflect Asarco's 63% ownership of Southern Peru Copper Corporation (SPCC). In April of this year Asarco increased its ownership interest in SPCC to 63% from 52.3%. Asarco is consolidating SPCC in its financial statements effective January 1, 1995. The Company had previously accounted for its interest in SPCC under the equity method of accounting.

Results for the third quarter of 1994 included a $30.7 million after tax provision to add to the Company's reserve for environmental costs. Excluding this charge, earnings for the third quarter of 1994 would have been $14.6 million or 35 cents per share.

Sales of products and services were $819.7 million in the third quarter of 1995 compared to $513.0 million for the same period of 1994. Had SPCC been consolidated in Asarco's financial statements in the third quarter of 1994, sales of products and services would have been $693.3 million.

For the nine months ended September 30, 1995, Asarco reported net income of $180.4 million, or $4.27 per share, compared with net income of $15.8 million or 38 cents per share for the comparable period of 1994.

Sales of products and services for the first nine months of 1995 were $2,398.2 million compared with $1,443.7 million in 1994. Had SPCC been consolidated in Asarco's financial statements in the first nine months of 1994, sales of products and services would have been $1,904.0 million.

Consolidated mined copper production in the third quarter of 1995 totaled 146,300 tons. Asarco's beneficial interest in the consolidated production was 113,200 tons compared to 105,600 tons in the third quarter of 1994. The increase in Asarco's beneficial interest in consolidated copper production was principally related to its increased ownership of SPCC and to the resumption of full operations of the Hayden mill at the Ray, Arizona mine.

The average prices for copper, lead, zinc and molybdenum increased in the third quarter of 1995 compared with the prior year period. The average price for copper on the New York Commodity Exchange (COMEX) for the third quarter of 1995 was $1.36 compared to $1.14 in the third quarter of 1994. On the London Metal Exchange (LME) in the third quarter of 1995, the average copper price was $1.37 compared to $1.11 in the prior year period. Approximately one half of the Company's consolidated copper sales are based on the COMEX price with the balance based on LME quotations. The average price for lead on the LME was 28 cents per pound in the third quarter of 1995 compared to 27 cents in 1994. The average zinc price was 46 cents per pound compared to 44 cents in the same period of 1994. The average price for molybdenum in the third quarter of 1995 was $4.37 per pound compared to $3.52 a year ago. Gold averaged $384 per ounce compared to $386 per ounce in the third quarter of 1994. The average price for silver in the third quarter of 1995 was $5.33 compared to $5.34 in the prior year.

Commenting on the Company's results, Richard de J. Osborne, Chairman of the Board of Asarco, said "Asarco's earnings for the third quarter of 1995 reflect the higher copper price along with lower costs and an increase in sales of copper mined by the Company as compared to the third quarter of 1994. In addition, the Company benefited from its increased ownership of SPCC as well as improved earnings from the Company's specialty chemicals business.

"SPCC contributed $36.2 million to the Company's net earnings in the third quarter of 1995 compared to $13.4 million in 1994. SPCC mined copper production increased to 69,100 tons in the third quarter of 1995 from 66,000 tons in the prior year. Molybdenum mined by SPCC in the third quarter increased over 43% from the prior year period to 1.9 million pounds.

"On October 5, SPCC announced that it had filed a registration statement with the Securities and Exchange Commission relating to a proposed exchange of its common stock for any and all of the outstanding "Labor Shares" of SPCC's Peruvian Branch. These Labor Shares, which are accounted for as a minority interest by SPCC, are currently traded on the Lima Stock Exchange. SPCC intends to list its common stock on the New York and Lima stock exchanges. Assuming all Labor Shares are exchanged for common stock, the Company will own 52.2% of the outstanding common stock of SPCC which represents no change in its current economic interest.

"The Company's specialty chemicals business continued to produce earnings at record levels in the third quarter of 1995. The integration of acquisitions and subsequent restructuring of the business over the last several years has been completed and when coupled with generally good economic conditions, the specialty chemicals business is now producing a dependable source of earnings for the Company.

"During the third quarter of 1995, Asarco sold its stock in Corporacion Minera Nor Peru which owned and operated the Quiruvilca mine in the northern part of Peru. The Company also sold its Lone Star Lead Construction business during the quarter. These sales were part of the Company's program to dispose of its non core operations. Third quarter 1995 results reflect a pretax loss of $4 million with respect to these sales.

We continue to be optimistic about the markets for the Company's major metals, particularly copper. Demand continues to be strong worldwide and copper inventories remain at relatively low levels."

ASARCO Incorporated, headquartered in New York City, is one of the world's leading integrated producers of nonferrous metals, principally copper, lead, zinc, silver, molybdenum and gold. Asarco also produces specialty chemicals and aggregates.


ASARCO Incorporated and Consolidated Subsidiaries
(In millions, except per share data)


Three Months Ended Nine Months Ended
September 30 September 30
Historical Pro Forma Historical Pro Forma
1995 1994 1994 1995 1994 1994
Sales
$819.7
$513.0
$693.3
$2,398.2 $1,443.7 $1,904.0
Earnings (loss) before taxes, equity earnings
and minority interests
139.9
(45.1)
3.3
398.0
(14.8)
95.8
Taxes on income (benefits)
46.6
(15.3)
.6
127.0
(.3)
39.9
Earnings (loss) before equity
earnings and minority interests
93.3
(29.8)
2.7
271.0
(14.5)
55.9
Equity earnings of nonconsolidated
associated companies net of taxes
.9
13.9
.5
1.6
30.8
1.4
Minority interests
(35.9)
(.2)
(19.3)
(92.2)
(.5)
(41.5)
Net earnings
$ 58.3
$ (16.1)
$ (16.1)
$ 180.4
$ 15.8
$ 15.8
Common shares
outstanding (average)
42.4
41.9
41.9
42.3
41.8
41.8
Net earnings (loss) per share $1.38 $(0.39) $(0.39) $ 4.27 $0.38 $0.38


Note: Pro Forma 1994 assumes that Asarco consolidated SPCC effective January 1, 1994 based on Asarco's 52.3% ownership of SPCC and is presented for comparison purposes. Effective April 1995 Asarco's ownership of SPCC increased to 63%.


ASARCO Incorporated and Consolidated Subsidiaries
(In Millions)


Three Months Ended

September 30

Nine Months Ended

September 30



1995

Historical

1994

Pro Forma

1994



1995

Historical

1994

Pro Forma

1994

Segment Sales
Metals $725.5 $421.8 $602.1 $2,112.9 $1,182.2 $1,642.4
Aggregates $12.8 $12.7 $12.7 $33.7 $30.8 $30.8
Specialty Chemicals $74.4 $68.6 $68.6 $228.3 $203.6 $203.6
Segment Operating
Income
Metals $158.0 ($43.0) $5.4 $431.2 ($56.3) $32.1
Aggregates $3.1 $2.1 $2.1 $7.1 $4.8 $4.8
Specialty Chemicals $6.0 $3.6 $3.6 $17.9 $11.3 $11.3


Includes equity earnings for operations which are vertically integrated.


Note: Pro Forma 1994 assumes that Asarco consolidated SPCC effective January 1, 1994 based on Asarco's 52.3% ownership of SPCC and is presented for comparison purposes. Effective April 1995 Asarco's ownership of SPCC increased to 63%.


Average Metals Prices


Three Months Ended

September 30

Nine Months Ended

September 30

1995 1994 1995 1994
Copper (per pound - COMEX) $1.36 $1.14 $1.36 $1.00
Copper (per pound - LME) $1.37 $1.11 $1.34 $0.98
Lead (per pound - LME) $0.28 $0.27 $0.28 $0.23
Silver (per ounce H&H) $5.33 $5.34 $5.17 $5.33
Gold (per ounce - London Final) $384 $386 $384 $384
Zinc (per pound - LME) $0.46 $0.44 $0.47 $0.44
Molybdenum (per pound -

Metals Week Dealer Oxide)


$4.37


$3.52


$8.45


$3.14


Metal Production and Sales
Three Months Ended September 30


1995 1994
Mined Refined Sales Mined Refined Sales
Copper (tons)
Asarco 77,200 130,300 120,000 77,100 123,200 121,800
SPCC 69,100 54,800 94,900 66,000 51,300 80,500
Consolidated 146,300 185,100 214,900 143,100 174,500 202,300
Asarco Beneficial Interest 113,200 158,900 169,500 105,600 145,300 156,500
Lead (tons)
Asarco 31,400 51,200 52,200 33,100 52,300 49,700
SPCC - - - - - -
Consolidated 31,400 51,200 52,200 33,100 52,300 49,700
Asarco Beneficial Interest 31,400 51,200 52,200 33,100 52,300 49,700
Silver (000s ounces)
Asarco 1,476 8,128 9,583 1,539 8,923 9,121
SPCC 757 689 725 822 476 853
Consolidated 2,233 8,817 10,308 2,361 9,399 9,974
Asarco Beneficial Interest 1,871 8,487 9,961 1,894 9,128 9,489
Gold (ounces)
Asarco 1,300 61,200 36,800 1,600 69,100 47,600
SPCC - - - - - -
Consolidated 1,300 61,200 36,800 1,600 69,100 47,600
Asarco Beneficial Interest 1,300 61,200 36,800 1,600 69,100 47,600
Zinc (tons)
Asarco 31,100 29,400
SPCC - -
Consolidated 31,100 29,400
Asarco Beneficial Interest 31,100 29,400
Molybdenum (000s pounds)
Asarco 1,476 943
SPCC 1,921 1,340
Consolidated 3,397 2,283
Asarco Beneficial Interest 2,478 1,522


Note: SPCC presented at 100%.

Consolidated and Asarco Beneficial Interest amounts shown for 1994 are pro forma and assume that Asarco consolidated SPCC effective January 1, 1994 based on Asarco's 52.3% equity ownership. The minority interest in SPCC represented by Labor Shares in its Peruvian Branch results in Asarco having a beneficial interest in SPCC of 43.2%. Effective April 1995 Asarco's equity ownership of SPCC increased to 63% and its beneficial interest increased to 52.1%.


Metal Production and Sales

Nine Months Ended September 30

1995 1994
Mined Refined Sales Mined Refined Sales
Copper (tons)
Asarco 227,300 385,900 377,700 212,200 366,500 406,600
SPCC 197,700 162,100 234,400 204,400 67,300 242,900
Consolidated 425,000 548,000 612,100 416,600 433,800 649,500
Asarco Beneficial Interest 324,600 465,700 494,200 300,500 395,500 511,400
Lead (tons)
Asarco 96,000 155,800 151,300 95,500 155,800 151,000
SPCC - - - - - -
Consolidated 96,000 155,800 151,300 95,500 155,800 151,000
Asarco Beneficial Interest 96,000 155,800 151,300 95,500 155,800 151,000
Silver (000s ounces)
Asarco 4,490 27,498 28,414 4,615 28,059 24,851
SPCC 2,167 1,814 1,866 2,277 625 2,386
Consolidated 6,657 29,312 30,280 6,892 28,684 27,237
Asarco Beneficial Interest 5,563 28,395 29,339 5,598 28,328 25,881
Gold (ounces)
Asarco 3,900 211,100 130,300 4,400 199,500 95,900
SPCC - - - - - -
Consolidated 3,900 211,100 130,300 4,400 199,500 95,900
Asarco Beneficial Interest 3,900 211,100 130,300 4,400 199,500 95,900
Zinc (tons)
Asarco 94,800 91,700
SPCC - -
Consolidated 94,800 91,700
Asarco Beneficial Interest 94,800 91,700
Molybdenum (000s pounds)
Asarco 4,180 2,613
SPCC 5,836 4,670
Consolidated 10,016 7,283
Asarco Beneficial Interest 7,077 4,629


Note: SPCC presented at 100%.


Consolidated and Asarco Beneficial Interest amounts shown for 1994 are pro forma and assume that Asarco consolidated SPCC effective January 1, 1994 based on Asarco's 52.3% equity ownership. The minority interest in SPCC represented by Labor Shares in its Peruvian Branch results in Asarco having a beneficial interest in SPCC of 43.2%. Effective April 1995 Asarco's equity ownership of SPCC increased to 63% and its beneficial interest increased to 52.1%.


ASARCO Incorporated and Subsidiaries
CONSOLIDATED STATEMENT OF EARNINGS
(unaudited)


3 Months Ended

September 30,

9 Months Ended

September 30,

1995 1994 1995 1994
(in thousands) (in thousands)
Sales of products and services $819,721 $512,968 $2,398,192 $1,443,705
Operating costs and expenses:
Cost of products and services 589,472 450,735 1,740,129 1,294,335
Selling, administrative and other 29,858 19,968 93,211 59,348
Provision (recovery) for bad debts 422 648 1,487 (2,086)
Depreciation and depletion 26,645 20,396 88,701 62,727
Research and exploration 6,693 5,541 19,459 13,875
Provision for environmental matters -
_______
46,585 -
_______
51,159
Total operating costs and expenses 653,090 543,873 1,942,987 1,479,358
Operating income (loss) 166,631 (30,905) 455,205 (35,653)
Interest expense (25,287) (16,103) (68,614) (45,104)
Other income (expense) (1,443) 1,918 11,453 7,429
Gain on sale of Asarco Australia Limited -
_______
-
_______
-
_______
58,512
_______
Earnings (loss) before taxes on income, minority interests and equity earnings


139,901


(45,090)


398,044


(14,816)

Taxes on income (benefit) 46,555 (15,248) 126,966 (297)
Minority interests in net earnings of consolidated subsidiaries


(35,959)



(172)



(92,263)



(474)

Equity in earnings of nonconsolidated associated companies, net of taxes of $81 and $374 in 1995; $1,279 and $2,959 in 1994




929




13,865




1,623




30,812

Net earnings $ 58,316 $(16,149) $ 180,438 $ 15,819
Per share amounts:
Net earnings (a) $ 1.38 $ (.39) $ 4.27 $ .38
Cash dividends $ 0.20 $ 0.10 $ 0.50 $ 0.30
Weighted average number of shares outstanding


42,402


41,942


42,264


41,850


(a) The effect on the calculation of net earnings per common share of the Company's Common Stock equivalents (shares under option) was insignificant.


ASARCO Incorporated and Subsidiaries

CONSOLIDATED BALANCE SHEET
(unaudited)


September 30,

1995

December 31,

1994

(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 229,093 $ 18,321
Marketable securities - -
Accounts and notes receivable, net 513,638 383,724
Inventories 399,282 299,148
Other assets 53,949 46,124
Total current assets 1,195,962 747,317
Investments:
Cost and available-for-sale 874,777 751,888
Equity 66,836 391,489
Property 4,097,409 2,509,072
Accumulated depreciation and depletion (2,049,765) (1,203,573)
Intangible assets 47,279 48,356
Other assets 52,584 46,476
Total Assets $4,285,082
_________
$ 3,291,025
__________
LIABILITIES
Current liabilities:
Bank loans $ 11,466 $ 5,125
Current portion of long-term debt 27,613 13,330
Accounts payable 311,923 296,983
Salaries and wages 33,867 20,159
Taxes on income 91,379 43,152
Reserve for closed plant and environmental matters 45,632 55,946
Other liabilities 61,965 30,838
Total current liabilities 583,845 465,533
Long-term debt 1,120,409 914,601
Deferred income taxes 230,847 156,450
Reserve for closed plant and environmental matters 24,773 66,458
Postretirement benefit obligations other than pensions


94,397


95,186

Other liabilities and reserves 74,092 72,967
Total non-current liabilities 1,544,518 1,305,662
MINORITY INTERESTS 393,770 2,443
COMMON STOCKHOLDERS' EQUITY
Common stock (a) 594,351 572,591
Unrealized gain on securities reported at fair value 166,588 91,627
Retained earnings 1,002,010 853,169
Total Common Stockholders' Equity 1,762,949 1,517,387
Total Liabilities, Minority Interests and Common Stockholders' Equity


$4,285,082
_________


$ 3,291,025
_________

(a) Common shares: authorized 80,000; outstanding: 42,480 42,102


ASARCO Incorporated and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)


3 Months Ended

September 30,

9 Months Ended

September 30,

1995 1994 1995 1994
(in thousands) (in thousands)
OPERATING ACTIVITIES
Net earnings (loss) $ 58,316 $(16,149) $180,438 $15,819
Adjustments to reconcile net earnings to net cash provided from (used for) operating activities:
Depreciation and depletion 26,645 19,757 88,701 62,727
Deferred income taxes 12,950 (13,364) 35,113 302
Treasury stock used for employee benefits 939 1,261 3,770 3,703
Undistributed equity (earnings) losses (946) (10,840) (540) (24,967)
Net (gain) loss on sale of investments and property and Asarco Australia Limited


4,749


(221)


2,996


(59,510)

Increase (decrease) in reserve for closed plant and environmental matters


(21,425)


25,543


(51,999)


14,234

Minority interests 35,959 172 92,263 474
Cash provided from (used for) operating assets and liabilities, net of the consolidation of SPCC:
Accounts and notes receivable (72,356) 18,675 (35,949) (57,421)
Inventories 26,664 (5,259) 10,358 (28,747)
Accounts payable and accrued liabilities 20,729 (62,999) (10,945) 29,301
Other operating liabilities and reserves 6,565 10,959 (8,323) 6,914
Other operating assets 14,126 (4,905) 3,584 (11,311)
Foreign currency transaction (gains) losses


38


191


(1,241)


2,498

Net cash provided from (used for) operating activities


112,953


(37,179)


308,226


(45,984)

INVESTING ACTIVITIES
Capital expenditures (89,399) (31,651) (275,781) (55,583)
Sale of securities, investments and property 26,073 13,406 88,638 93,109
Release of restricted cash 2,177 - 60,450 -
Sale of available-for-sale securities 4,823 59,591 13,967 122,265
Purchase of available-for-sale securities (4,623) (59,863) (14,975) (123,063)
Purchase of investments (1,545) (68) (37,555) (283)
Acquisition of additional interest in SPCC - - (116,444) -
Consolidation of the opening cash balance of SPCC


-
_______


-
_______


93,348
______


-
_______

Net cash provided from (used for) investing activities


(62,494)


(18,585)


(188,352)


36,445

FINANCING ACTIVITIES
Debt incurred 65,057 62,217 229,780 108,096
Debt retired (92,272) (595) (121,439) (80,956)
Net treasury stock transactions 5,108 3,225 5,343 3,707
Dividends paid (8,487) (4,196) (21,146) (12,557)
Net cash provided from (used for) financing activities


(30,594)


60,651


92,538


18,290

Effect of exchange rate changes on cash (1,295) (1,039) (1,640) (1,370)
Increase (decrease) in cash and cash equivalents


18,570


3,848


210,772


7,381

Cash and cash equivalents at beginning of period


210,523


16,033


18,321


12,500

Cash and cash equivalents at end of period $229,093
_______
$19,881
______
$229,093
_______
$19,881
______



FOR FURTHER INFORMATION: Jerry W. Cooper (212) 510-1810 (212) 510-1835 (FAX) Donald M. Noyes (212) 510-1813
Corporate Communications Department, ASARCO Incorporated, 180 Maiden Lane, N.Y. 10038-4991


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