Item 3. Legal Proceedings.
FRP is involved from time to time in various legal proceedings of a character normally incident to its businesses. FRP believes that its potential liability in any such pending or threatened proceedings will not have a material adverse effect on the financial condition or results of operations of FRP. FRP, through FTX and IMC-Agrico, maintains liability insurance to cover some, but not all, potential liabilities normally incident to the ordinary course of its businesses with such coverage limits as management deems prudent.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The information set forth under the captions "FRP Units" and "Cash Distributions/Preferential Rights of Public Unitholders" on the inside back cover of FRP's 1996 Annual Report to unitholders is incorporated herein by reference. As of March 14, 1997, there were 12,887 record holders of FRP Units.
Item 6.
Item 6. Selected Financial Data.
The information set forth under the caption "Selected Financial and Operating Data" on page 11 of FRP's 1996 Annual Report to unitholders is incorporated herein by reference.
FRP's ratio of earnings to fixed charges for each of the years 1992 through 1996 inclusive, was 1.0x, a shortfall of $233.5 million, 3.2x, 5.5x and 5.7x, respectively. For purposes of this calculation, earnings are considered income from continuing operations before fixed charges. Fixed charges are interest and that portion of rent deemed representative of interest.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 12 through 17 of FRP's 1996 Annual Report to unitholders is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data.
The financial statements of FRP, the notes thereto and the report thereon of Arthur Andersen LLP appearing on pages 18 through 27 and the report of management appearing on page 18 of FRP's 1996 Annual Report to unitholders are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
As a limited partnership FRP has no directors. FTX and FMRP, as the managing general partners of FRP, perform comparable functions for FRP. The executive officers of FRP are appointed by FTX, and these officers, together with certain executive officers and directors of FTX, perform all management functions of FRP. The executive officers of FRP are employees of FTX or FMS. These FRP executive officers, together with the directors and executive officers of FTX who perform management functions on behalf of FRP, are collectively referred to as the "Executive Officers" in this Report.
Executive Officers
The following table shows, as of March 14, 1997, the names, ages, positions with FRP, FTX and FMRP and principal occupations of the Executive Officers:
Name Age Positions and Principal Occupations
Richard C. Adkerson 50 Director and Vice Chairman of the Board of FTX.
Michael J. Arnold 44 Senior Vice President of FRP. Senior Vice President of FTX.
Thomas J. Egan 52 Senior Vice President of FTX.
W. Russell King 47 Senior Vice President of FTX.
Rene L. Latiolais 54 President and Chief Executive Officer of FRP. Director, President and Chief Executive Officer of FTX. Director, Chairman of the Board and President of FMRP.
James R. Moffett 58 Director and Chairman of the Board of FTX.
Robert M. Wohleber 46 Senior Vice President of FRP. Senior Vice President of FTX. Director of FMRP.
Richard C. Adkerson has served as Vice Chairman of the Board and a Director of FTX since August 1995. Mr. Adkerson is Executive Vice President of FCX. He is Co-Chairman of the Board, Chief Executive Officer and a Director of McMoRan Oil & Gas Co. ("MOXY"). In addition, he is Chairman of the Board, Chief Executive Officer and a Director of FM Properties Inc. ("FMPO"). From 1992 to August 1995, Mr. Adkerson was Senior Vice President of FTX.
Michael J. Arnold has served as Senior Vice President of FRP and FTX since November 1996. Mr. Arnold is also a Senior Vice President of FCX. From May 1993 to November 1996, Mr. Arnold was Vice President and Controller-Operations of FTX and was a Vice President of FTX from October 1991 to May 1993. From July 1994 to November 1996, Mr. Arnold was Vice President and Controller-Operations of FCX.
Thomas J. Egan has served as Senior Vice President of FTX since November 1993. From November 1987 to November 1993, Mr. Egan was Vice President of FTX. Mr. Egan is also a Senior Vice President of FCX.
W. Russell King has served as Senior Vice President of FTX since November 1993. From October 1984 to November 1993, Mr. King was Vice President of FTX. Mr. King is also a Senior Vice President of FCX.
Rene L. Latiolais has served as President and Chief Executive Officer of the Company since June 1988. Mr. Latiolais has served as President and Chief Executive Officer of FTX since August 1995 and as a Director of FTX since August 1993. Mr. Latiolais was Chief Operating Officer of FTX until 1995 and Executive Vice President of FTX until 1993. Mr. Latiolais is Vice Chairman of the Board and a Director of FCX.
James R. Moffett has served as Chairman of the Board of FTX since May 1992 and as a Director of FTX and its predecessors since 1969. Mr. Moffett is Chairman of the Board, Chief Executive Officer and a Director of FCX. Mr. Moffett is Co-Chairman of the Board and a Director of MOXY.
Robert M. Wohleber has served as Senior Vice President of FRP and FTX since November 1996. From June 1994 to November 1996, Mr. Wohleber was Vice President of FTX. He served as Vice President and Treasurer of FTX from May 1992 to June 1994 and served as Treasurer of FTX from May 1989 to May 1992. Mr. Wohleber has also been a Vice President of FCX since July 1994. He served as Vice President and Treasurer of FCX from July 1993 to June 1994. He served as Treasurer of FCX from August 1990 to June 1993.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires directors, executive officers, the principal financial and accounting officers and beneficial owners of more than 10% of a company's equity securities to file certain beneficial ownership reports with the SEC. In November 1996 Messrs. Arnold and Wohleber became executive officers of FRP but inadvertently filed their respective initial beneficial ownership reports late.
Item 11.
Item 11. Executive Compensation.
FRP does not employ any Executive Officers and no compensation was provided by FRP to any Executive Officer for services rendered in any capacity in 1996. The services of Executive Officers of FRP are provided to FRP by FTX as provided in the FRP partnership agreement, for which FRP reimburses FTX at its cost, including allocated overhead. All Executive Officers are employees of FTX or FMS, are compensated by FTX or FMS, and are eligible to participate in FTX or FMS benefit plans and programs. The total costs to FTX and FMS for Executive Officers, including costs of such plans and programs, are allocated to FRP, to the extent practicable, in proportion to the time spent by Executive Officers on FRP affairs. Reference is made to the information set forth under Part 1, Items 1 and 2 "Business and Properties - Relationship between the Company and the FTX Group" above and to the information set forth in Note 5 to the FRP Financial Statements.
The following table sets forth certain information regarding the compensation that FTX paid to its chief executive officer and each of its four most highly compensated executive officers (with respect to salary and bonus only) other than the chief executive officer (collectively, the "Named Executive Officers"). During 1996, the Named Executive Officers also provided services to and received compensation from FCX.
Summary Compensation Table Long-Term Compensation Annual Compensation ----------------------- ------------------------------- Other Awards Payouts Name and Annual Securities All Other Principal Compensa- Underlying LTIP Compensa- Position Year Salary Bonus tion(1) Options/SARS Payouts tion(2)
James R. Moffett1996 $180,556 $1,025,000 $ 60,464(3) 330,000 $614,151 $19,333 Chairman of the 1995 1,250,000 2,480,664 499,822(3) - 730,988 100,308 Board 1994 1,250,000 3,149,900 538,418(3) - 566,500 83,553
Rene L. Latiolais1996 630,000 1,955,000 137,951(4) 385,000 245,651 44,543 President and Chief1995 700,000 2,167,953 69,305(4) - 292,388 50,825 Executive Officer 1994 700,000 2,263,900 85,464(4) - 226,600 44,303
Richard C. Adkerson1996 102,273 567,000 3,811 90,000 122,826 13,320(6) Vice Chairman of 1995 500,000 950,340 89,617(5) - 146,194 39,346(6) the Board 1994 500,000 1,476,500 8,914 110,100 113,300 31,830(6)
Charles W. Goodyear(7)1996 350,000 689,000 3,301 220,000 122,826 17,500 Executive Vice 1995 500,000 1,077,493 3,494 - 146,194 25,000 President 1994 500,000 1,476,500 6,113 110,100 113,300 23,250
W. Russell King 1996 150,000 162,500 5,546 4,000 36,850 8,207 Senior Vice 1995 300,000 300,000 11,092 - 43,860 16,416 President 1994 300,000 268,200 9,757 107,600 50,985 13,457
(1) In addition to items disclosed in notes 3, 4 and 5, includes FTX's payments of taxes in connection with certain benefits FTX provided to each Named Executive Officer in the following respective amounts for 1996, 1995 and 1994: Mr. Moffett, $6,552, $40,422 and $38,398; Mr. Latiolais, $39,121, $26,496 and $23,402; Mr. Adkerson, $3,811 $32,909 and $8,914; Mr. Goodyear, $3,301, $3,494 and $6,113; and Mr. King, $5,546, $11,092 and $9,757. Does not include perquisites that FTX provided to each Named Executive Officer unless the aggregate amount in any year exceeded $50,000.
(2) Comprised of FTX's contributions to defined contribution plans, FTX's premium payments for universal life insurance policies and director fees as follows: Life Plan Insurance Director Name Year Contributions Premiums Fees Mr. Moffett . . . . . . . . . 1996 $ 9,027 $ 4,306 $6,000 1995 62,500 29,808 8,000 1994 60,766 15,787 7,000 Mr. Latiolais. . . . . . . . . 1996 31,500 7,043 6,000 1995 35,000 7,825 8,000 1994 33,273 5,030 6,000 Mr. Adkerson . . . . . . . . . 1996 5,114 483 6,000 1995 25,000 2,646 4,000 1994 23,250 1,180 - Mr. Goodyear . . . . . . . . . 1996 17,500 - - 1995 25,000 - - 1994 23,250 - - Mr. King . . . . . . . . . . . 1996 7,500 707 - 1995 15,000 1,416 - 1994 13,258 199 -
(3) Includes $53,912, $459,400 and $500,020 of perquisites that FTX provided to Mr. Moffett in 1996, 1995 and 1994, respectively, consisting of (a) $270,000 of principal payments of a non-interest bearing loan to Mr. Moffett from FTX that were forgiven in 1995 and 1994, (b) $62,606 and $80,793 of imputed interest in 1995 and 1994, respectively, on such loan, (c) $40,000 of matching gifts under the matching gifts program during each year, (d) $2,745 in 1996 and $19,000 in each of 1995 and 1994 for financial counseling and tax return preparation and certification services, and (e) $11,167, $67,794 and $90,227 of additional income recognized for federal income tax purposes by Mr. Moffett for use of FTX's aircraft in 1996, 1995 and 1994, respectively.
(4) Includes $98,830, $42,809 and $62,062 of perquisites that FTX provided to Mr. Latiolais in 1996, 1995 and 1994, respectively, consisting of (a) $3,675, $2,549 and $4,849 of matching gifts under the matching gifts program during 1996, 1995 and 1994, respectively, (b) $19,587, $20,000 and $20,360 for financial counseling and tax return preparation and certification services in 1996, 1995 and 1994, respectively, and (c) $75,568, $20,260 and $36,853 of additional income recognized for federal income tax purposes by Mr. Latiolais for his use of FTX's aircraft in 1996, 1995 and 1994, respectively.
(5) Includes $56,708 of perquisites that FTX provided to Mr. Adkerson in 1995 consisting of (a) $26,300 of matching gifts under the matching gifts program, (b) $4,717 for financial counseling and tax return preparation and certification services and (c) $25,691 of additional income recognized for federal income tax purposes by Mr. Adkerson for his use of FTX's aircraft.
(6) Includes $1,723, $7,700 and $7,400 of scholarships that FTX provided in 1996, 1995 and 1994, respectively, for the benefit of Mr. Adkerson's son.
(7) Effective as of January 1, 1997, Mr. Goodyear resigned from FTX and FRP and pursuant to an agreement, he forfeited two-thirds of the stock options that FTX granted to him in 1996 and will receive $8,333 per month over a three-year period. See "Item 13. Certain Relationships and Related Transactions." ____________________
The following table sets forth information with respect to all stock options and SARs that FTX granted to each of the Named Executive Officers in 1996.
Option/SAR Grants in 1996
Percent of Number of Total Securities Options/SARs Underlying Granted to Exercise Grant Date Options/SARs Employees or Base Expiration Present Name Granted(1) 1996 Price Date Value(2)
James R. Moffett 330,000 30.37% $34.81 May 14, 2006 $5,375,700 Rene L. Latiolais 385,000 35.43% $34.81 May 14, 2006 6,271,650 Richard C. Adkerson 90,000 8.28% $34.81 May 14, 2006 1,466,100 Charles W. Goodyear(3) 220,000 20.25% $34.81 May 14, 2006 3,583,800 W. Russell King 4,000 0.37% $36.56 Apr. 30, 2006 69,000
(1) The stock options granted to Messrs. Moffett, Latiolais, Adkerson and Goodyear will become exercisable over a five-year period and the stock options granted to Mr. King will become exercisable over a four-year vesting period. The stock options will become immediately exercisable in their entirety if (a) any persons or group of persons acquires beneficial ownership of shares representing 20% or more of FTX's total voting power or (b) under certain circumstances, the composition of the Board of Directors is changed after a tender offer, exchange offer, merger, consolidation, sale of assets or contested election or any combination thereof. Each stock option has an equal number of tandem "limited rights," which may be exercisable only for a limited period in the event of a tender offer, exchange offer, a series of purchases or other acquisitions or any combination thereof resulting in a person or group of persons becoming a beneficial owner of shares representing 40% or more of FTX's total voting power. Each limited right entitles the holder to receive cash equal to the amount by which the highest price paid in such transaction exceeds the exercise price.
(2) The Black-Scholes option pricing model was used to determine the grant date present value of the stock options granted by FTX to the Named Executive Officers. Under the Black-Scholes option pricing model, the grant date present value of each stock option and SAR referred to in the table was calculated to be $17.25 on April 30, 1996 and $16.29 on May 14, 1996. The following facts and assumptions were used in making such calculations: (a) an unadjusted exercise price for each such stock option as set forth under the column labeled "Exercise or Base Price;" (b) a fair market value of $36.5625 and $34.8125 for one share of Common Stock on April 30, 1996 and May 14, 1996, respectively; (c) dividend yields of 0.98% and 1.03%, respectively, derived from dividing (i) $0.36, which is the value of the dividend currently being paid on one share of Common Stock, by (ii) the fair market value of one share of Common Stock on the dates of grant; (d) a term for such stock options as set forth under the column labeled "Expiration Date;" (e) a stock volatility of 27.5%, based on an analysis of weekly closing stock prices of the Common Stock over a 36-week period; and (f) an assumed risk-free interest rate of 6.61%, such rate being equivalent to the yield on the dates of grant on a treasury note with a maturity date comparable to the expiration of such stock option. No other discounts or restrictions related to vesting or the likelihood of vesting of stock options were applied. The resulting grant date present value for each stock option was multiplied by the total number of stock options granted to each of the Named Executive Officers to determine their total grant date present values.
(3) Effective as of January 1, 1997, Mr. Goodyear resigned from FTX and FRP and pursuant to an agreement, he forfeited two-thirds of the stock options that FTX granted to him in 1996 and will receive $8,333 per month over a three-year period. See "Item 13. Certain Relationships and Related Transactions." _______________________
The following table sets forth information with respect to any exercises of FTX stock options and SARs in 1996 by each of the Named Executive Officers and all outstanding FTX stock options and SARs held by each of the Named Executive Officers as of December 31, 1996.
Aggregate Option/SAR Exercises in 1996 and Option/SAR Values at December 31, 1996 Value of Number of Securities Unexercised Underlying Unexercised In-the-Money Shares Options/SARs at Options/SARs at Acquired December 31, 1996 December 31, 1996 on Value Exercisable/ Exercisable/ Name Exercise Realized Unexercisable Unexercisable James R. Moffett - $ - 34,094/330,000 $ 423,502/ - Rene L. Latiolais 90,661 1,934,636 78,298/390,649 992,021/76,653 Richard C. Adkerson 84,988 1,629,958 18,607/103,780 234,426/174,221 Charles W. Goodyear 4,675 290,732 85,252/233,780 1,172,080/174,221 W. Russell King - - 11,824/ 16,794 152,648/161,133
The following table sets forth information with respect to all long-term incentive plan awards made in 1996 by FTX to each of the Named Executive Officers.
Long-Term Incentive Plans Awards in 1996
Number of Performance Shares, or Other Units Period Until Estimated Future or Other Maturation Payouts Under Non-Stock Name Rights(1) or Payout Price-Based Plans(2) James R. Moffett 20,000 12/31/99 $442,400 Rene L. Latiolais 35,000 12/31/99 774,200 Richard C. Adkerson 7,000 12/31/99 154,840 Charles W. Goodyear 13,000 12/31/99 287,560 W. Russell King 5,500 12/31/99 121,660
(1) Represents the number of performance units covered by FTX's performance award granted in 1996 under FTX's 1992 Long-Term Performance Incentive Plan (the "Long-Term Plan"). As of December 31 of each year, each Named Executive Officer's performance award account will be credited with an amount equal to the "annual earnings per share" or "net loss per share" (as defined in the Long-Term Plan) for that year multiplied by the number of performance units then credited to such performance award account. Annual earnings per share or net loss per share includes the net income or net loss of each majority-owned subsidiary of FTX that is attributable to equity interests that are not owned by FTX. The Corporate Personnel Committee may, however, in its discretion, prior to crediting the Named Executive Officers' performance award accounts with respect to a particular year, reduce or eliminate the amount of the annual earnings per share that otherwise would be credited to any performance award account for such year. The balance in such performance award account is generally paid as soon as practicable after December 31 of the year in which the third anniversary of the award occurs.
(2) The amounts represent the annual earnings per share for 1996, as determined by FTX's Corporate Personnel Committee, applied over a four-year period.
Retirement Benefit Program
FTX's retirement benefit program was amended effective July 1, 1996, to incorporate a "cash-balance plan" design. Under the amended program, each participant, including the Named Executive Officers, is entitled to benefits based upon the sum of his starting account balance, annual benefit credits and annual interest credits allocated to his "account." The starting account balance is equal to the value of the participant's accrued benefit as of June 30, 1996, under the prior plan. The annual benefit credit consists of two parts: (1) 4% of the participant's earnings for the year in excess of the social security wage base for the year; and (2) a percentage of the participant's total earnings for the year. The percentage of total earnings is determined as follows:
15%, if as of January 1, 1997, the participant's age plus service totaled 65 or more, he was at least 50 years old and had at least 10 years of service; 10%, if as of January 1, 1997, the participant's age plus service totaled 55 or more, he had at least 10 years of service, and he did not meet the requirements for a 15% allocation; 7%, if as of January 1, 1997, the participant's age plus service totaled 45 or more, he had at least 5 years of service, and he did not meet the requirements for a greater allocation; 4%, if the participant did not meet the requirements for a greater allocation.
The annual interest credit is equal to the account balance at the end of the prior year multiplied by the annual yield on 10-year U.S. Treasury securities on the last day of the preceding year. For the first half-year of the cash-balance plan design, ending December 31, 1996, the annual benefit credits were based on compensation for the second half of the year, and the interest credit was 2.79% (equal to half the annual yield rate of 5.58%). Interest credits stop at the end of the year in which the participant reaches age 60. Upon retirement a participant's account balance is payable either in a lump sum or an annuity, as selected by the participant. A participant's "earnings" are comprised of annual base salary (see "Salary" in the Summary Compensation Table above), plus a percentage of certain bonuses (See "Bonus" in the Summary Compensation Table above), which percentage is the lesser of 50% or the percentage of the bonus not deferred. Years of service include not only years with FTX but also any years with FTX's predecessors.
Benefits payable to a participant under FTX's retirement benefit program are no longer determined primarily by such individual's final average compensation and years of service. However, if a participant's age plus service equaled 65 or more as of January 1, 1997, and as of that date the participant had both attained age 50 and had at least 10 years of service, the participant is "grandfathered" into a benefit of no less than the benefit under the former retirement benefit formula based on years of service and final average earnings.
The following is the estimated annual retirement benefit, payable as an annuity for life, of each of the Named Executive Officers assuming retirement at age 60, and allowing for reasonable annual increases in earnings until retirement: Mr. Moffett, $1,204,481; Mr. Adkerson, $197,292; Mr. Latiolais, $1,283,955; and Mr. King, $262,110. Mr. King participates in the retirement benefit program of FMS. Mr. Goodyear resigned effective January 1, 1997 and his estimated annual benefit under the retirement benefit program, if the benefit is paid as an annuity for life commencing at age 60, is $115,229.
Compensation Committee Interlocks and Insider Participation
As a limited partnership, FRP has neither a board of directors nor a compensation committee. FTX has a Corporate Personnel Committee composed of four independent directors, none of whom is an officer or employee of FTX, FRP or any of their respective subsidiaries. The current members of FTX's Corporate Personnel Committee are Robert W. Bruce III, William B. Harrison, Jr., George Putnam and J. Taylor Wharton. No Executive Officer served in 1996 as a director or member of the compensation committee of another entity, one of whose executive officers served as a director of FTX or on FTX's Corporate Personnel Committee.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table contains certain information concerning the beneficial ownership of FRP units as of December 31, 1996 by each person known by FRP to be the beneficial owner of more than 5% of any class of FRP equity security, determined in accordance with Rule 13d-3 of the SEC and based on information furnished to FRP by each such person. Unless otherwise indicated, the securities shown are held with sole voting and investment power.
Number of FRP Units Percent Beneficially of Name and Address of Beneficial Owner Owned Class
Freeport-McMoRan Inc. 52,284,950(1) 51.6% 1615 Poydras Street New Orleans, Louisiana 70112
Vanguard/Windsor Fund, Inc. 7,810,700(2) 7.6% Post Office Box 2600 Valley Forge, Pennsylvania 19482-2600
Wellington Management Company, LLP 7,810,700(3) 7.6% 75 State Street Boston, Massachusetts 02109
(1) Consists of 135,034 FRP Depositary Units and 52,149,916 FRP Unit Equivalents.
(2) Based on the Schedule 13G dated February 7, 1997 that Vanguard/Windsor Fund, Inc. filed with the SEC. Vanguard/Windsor Fund, Inc. has sole voting power and shared investment power as to all 7,810,700 units, consisting solely of FRP Depositary Units.
(3) Based on the Schedule 13G dated January 24, 1997 that Wellington Management Company, LLP filed with the SEC. Wellington Management Company, LLP has shared investment power only as to all 7,810,700 Units.
The following table contains information concerning the beneficial ownership of shares of FTX common stock ("FTX Shares") and FRP Depositary Units as of December 31, 1996 by (a) each Named Executive Officer and (b) all Executive Officers as a group, determined in accordance with Rule 13d-3 of the SEC and based upon information furnished to FRP by each such person. Unless otherwise indicated, the securities shown are held with sole voting and investment power.
Number of FTX Shares Number of FRP Units Name of Beneficial Owner Beneficially Owned(1)(2) Beneficially Owned(1) Richard C. Adkerson 23,726(3)(4) - Charles W. Goodyear 68,459(3)(5) - W. Russell King 18,645 990 Rene L. Latiolais 122,886(3) 707(6) James R. Moffett 280,298(3)(7) 39,600(7) All Executive Officers as a group (7 persons) 477,999(8) 41,297(8)
(1) With the exception of Mr. Moffett (who beneficially owns 1.2% of the outstanding FTX Shares), each individual holds less than 1% of the outstanding FTX Shares and FRP Units, respectively.
(2) Includes shares that could be acquired within sixty days after December 31, 1996, upon the exercise of options granted pursuant to FTX's stock option plans, as follows: Mr. Adkerson, 12,862 shares; Mr. Goodyear, 67,729 shares; Mr. King, 7,508 shares; Mr. Latiolais, 64,771 shares; Mr. Moffett, 22,729 shares; all Executive Officers as a group, 138,670 shares.
(3) Includes shares held by the trustee under FTX's Employee Capital Accumulation Program for the benefit of such individuals, as follows: Mr. Adkerson, 838 shares; Mr. Goodyear, 720 shares; Mr. Latiolais, 3,009 shares; Mr. Moffett, 4,318 shares; all Executive Officers as a group, 8,218 shares.
(4) Includes 149 shares held in a retirement trust for the benefit of Mr. Adkerson.
(5) Includes 10 shares held in a retirement trust for the benefit of Mr. Goodyear.
(6) Includes 573 FRP Units held for the benefit of Mr. Latiolais under the FRP Reinvestment Plan.
(7) Includes 26,624 FTX Shares and 39,600 FRP Units held for the benefit of trusts with respect to which Mr Moffett, as a co-trustee, shares voting and investment power but as to which he disclaims beneficial ownership.
(8) Represents approximately 2.0% of the FTX Shares and less than 1% of the outstanding FRP Units.
Item 13.
Item 13. Certain Relationships and Related Transactions.
Upon his resignation from FTX, FCX, MOXY, FRP, FMS and FM Properties Inc. (collectively, the "Freeport Entities") as of January 1, 1997, Mr. Goodyear forfeited two-thirds of the stock options that the Freeport Entities granted to him in 1996. The stock options that FTX granted to Mr. Goodyear in 1996 are shown in the table entitled "Option/SAR Grants in 1996" under " Item 11. Executive Compensation." In consideration for such forfeiture, Mr. Goodyear is entitled to receive $8,333 per month from the Freeport Entities starting on January 1, 1997 and continuing through December 1, 1999. Such payments may be discontinued or accelerated under certain circumstances if the consulting arrangement with FMS described below is terminated.
In December 1996, FMS entered into an agreement with Goodyear Capital Corporation ("GCC"), a corporation of which Mr. Goodyear is President and the sole stockholder, under which GCC has agreed to provide consulting services relating to the financial aspects of the businesses, operations and prospects of FMS and its corporate affiliates, including FTX, FRP and FCX, from January 1, 1997 through December 31, 1999. Under the agreement, GCC will receive an annual consulting fee of $1,400,000, reimbursement of reasonable out-of-pocket expenses incurred in connection with providing such services, certain perquisites, and incentive bonuses, in amounts to be determined, for providing material assistance to any of the Freeport Entities on any major transactions that may be successfully consummated. In 1996, Mr. Goodyear received $15,674 as reimbursement for certain fees incurred in connection with the negotiation of this agreement.
Reference is made to the information set forth in "Items 1 and 2. Business and Properties - Relationship between the Company and the FTX Group" above, to the information set forth in "Item 11. Executive Compensation" above and to the information set forth in Note 5 to the FRP Financial Statements.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)(1). Financial Statements.
Reference is made to the Index to Financial Statements appearing on page hereof.
(a)(2). Financial Statement Schedules.
Reference is made to the Index to Financial Statements appearing on page hereof.
(a)(3). Exhibits.
Reference is made to the Exhibit Index beginning on page E-1 hereof.
(b). Reports on Form 8-K.
During the last quarter of the period covered by this report, FRP filed a report on Form 8-K dated December 20, 1996 reporting an event under item 5 thereof. No financial statements were filed.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 28, 1997.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
By: FREEPORT-McMoRan INC., Its Administrative Managing General Partner
By: /s/ James R. Moffett James R. Moffett Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 28, 1997.
Signature President and Chief Executive Officer of Freeport-McMoRan Resource Partners, Limited Partnership, and Director of * Freeport-McMoRan Inc. Rene L. Latiolais (Principal Executive Officer)
Senior Vice President of Freeport-McMoRan Resource Partners, * Limited Partnership (Principal Financial Officer) Robert M. Wohleber
Vice President and Controller of Freeport-McMoRan * Resources Partners, Limited Partnership (Principal Nancy D. Bonner Accounting Officer)
* Richard C. Adkerson Director of Freeport-McMoRan Inc.
* Robert W. Bruce III Director of Freeport-McMoRan Inc.
* Robert A. Day Director of Freeport-McMoRan Inc.
* William B. Harrison, Jr. Director of Freeport-McMoRan Inc.
* Henry A. Kissinger Director of Freeport-McMoRan Inc.
* Bobby Lee Lackey Director of Freeport-McMoRan Inc.
* Gabrielle K. McDonald Director of Freeport-McMoRan Inc.
/s/ James R. Moffett James R. Moffett Director and Chairman of the Board of Freeport-McMoRan Inc.
* George Putnam Director of Freeport-McMoRan Inc.
* B. M. Rankin, Jr. Director of Freeport-McMoRan Inc.
* J. Taylor Wharton Director of Freeport-McMoRan Inc.
*By:/s/ James R. Moffett James R. Moffett Attorney-in-Fact
The financial statements of FRP, the notes thereto, and the report thereon of Arthur Andersen LLP, appearing on pages 18 through 27, inclusive, of FRP's 1996 Annual Report to unitholders are incorporated by reference.
The financial statement schedules listed below should be read in conjunction with such financial statements contained in FRP's 1996 Annual Report to unitholders.
Page --------- Report of Independent Public Accountants III-Condensed Financial Information of Registrant VIII-Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted since they are either not required, not applicable or the required information is included in the financial statements or notes thereto.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited, in accordance with generally accepted auditing standards, the financial statements as of December 31, 1996 and 1995 and for each of the three years in the period ended December 31, 1996 included in Freeport-McMoRan Resource Partners, Limited Partnership's annual report to unitholders incorporated by reference in this Form 10-K, and have issued our report thereon dated January 21, 1997. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the index above are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
Arthur Andersen LLP New Orleans, Louisiana, January 21, 1997
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS
December 31, ----------------------- 1996 1995 ---------- ---------- (In Thousands) ASSETS Current assets Cash and cash equivalents $ 6,372 $ 6,021 Accounts receivable: Customers 21,323 23,666 Other 23,606 16,680 Inventories: Products 21,859 22,221 Materials and supplies 8,214 9,542 Prepaid expenses and other 3,003 2,545 ---------- ---------- Total current assets 84,377 80,675 Property, plant and equipment-net 498,830 533,100 Investment in IMC-Agrico 399,603 428,922 Other assets 26,814 40,169 ---------- ---------- Total assets $1,009,624 $1,082,866 ========== ==========
LIABILITIESANDPARTNERS'CAPITAL Accounts payable and accrued liabilities $ 80,748 $ 56,539 Long-term debt, less current portion 350,000 371,140 Reclamation and mine shutdown reserves 53,848 76,857 Accrued postretirement benefits and other liabilities 165,380 173,864 Partners' capital 359,648 404,466 ---------- ---------- Total liabilities and partners' capital $1,009,624 $1,082,866 ========== ==========
The footnotes contained in FRP's 1996 Annual Report to unitholders are an integral part of these statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF INCOME
Years Ended December 31, ------------------------------------- 1996 1995 1994 ---------- ---------- ----------
(In Thousands) Revenues $ 175,950 $ 202,498 $ 111,185 Cost of sales: Production and delivery 119,052 119,239 61,211 Depreciation and amortization 36,203 42,142 38,825 ---------- ---------- ---------- Total cost of sales 155,255 161,381 100,036 Exploration expenses 2,485 - - General and administrative expenses 35,509 50,492 28,949 ---------- ---------- ---------- Total costs and expenses 193,249 211,873 128,985 ---------- ---------- ---------- Operating loss (17,299) (9,375) (17,800) Interest expense, net (31,752) (30,138) (32,297) Equity in earnings of IMC-Agrico 226,002 201,704 136,671 Other income (expense), net 350 (783) (2,608) ---------- ---------- ---------- Net income $ 177,301 $ 161,408 $ 83,966 ========== ========== ==========
The footnotes contained in FRP's 1996 Annual Report to unitholders are an integral part of these statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOW
Years Ended December 31, ----------------------------------- 1996 1995 1994 ---------- ---------- ---------- (In Thousands) Cash flow from operating activities: Net income $ 177,301 $ 161,408 $ 83,966 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36,203 42,142 38,825 Equity in earnings of IMC-Agrico (226,002) (201,704) (136,671) Cash distributions received from IMC-Agrico 263,083 219,515 233,617 (Increase) decrease in working capital, net of effect of acquisitions: Accounts receivable (843) (16,875) (2,311) Inventories 1,690 5,353 7,058 Prepaid expenses and other (456) (2,272) - Accounts payable and accrued liabilities 6,180 29,590 (389) Reclamation and mine shutdown expenditures (5,253) (2,065) (5,270) Other 6,958 8,478 11,551 ---------- ---------- ---------- Net cash provided by operating activities 258,861 243,570 230,376 ---------- ---------- ---------- Cash flow from investing activities: Capital expenditures (9,440) (13,331) (11,231) Investment in IMC-Agrico (7,641) (46,200) - Sale of assets 4,000 375 36,919 Other - 1,531 530 ---------- ---------- ---------- Net cash provided by (used in) investing activities (13,081) (57,625) 26,218 ---------- ---------- ---------- Cash flow from financing activities: Distributions to partners (222,119) (202,541) (127,368) Proceeds from (repayment of) debt, net (171,141) 16,269 (270,900) Purchase of partnership units - (2,061) (1,342) Proceeds from sale of 7% Senior Notes 147,831 - - Proceeds from sale of 8 3/4% Senior Subordinated Notes - - 146,125 ---------- ---------- ---------- Net cash used in financing activities (245,429) (188,333) (253,485) ---------- ---------- ---------- Net increase (decrease) in cash and cash equivalents 351 (2,388) 3,109 Cash and cash equivalents at beginning of year 6,021 8,409 5,300 ---------- ---------- ---------- Cash and cash equivalents at end of year $ 6,372 $ 6,021 $ 8,409 ========== ========== ==========
The footnotes contained in FRP's 1996 Annual Report to unitholders are an integral part of these statements.
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1996, 1995 and 1994
Col. A Col. B Col. C Col. D Col. E - --------- ---------- ---------- ---------- ---------- Additions ---------------------- Balance at Charged to Charged to Balance at Beginning Costs and Other Other-Add End of Description of Period Expenses Accounts (Deduct) Period - ---------- ---------- ---------- ---------- ---------- --------- (In Thousands) Reserves and allowances deducted from asset accounts:
Reclamation and mine shutdown reserves: 1996: Sulphur $ 71,954 $ 3,920 $ - $ (28,217)a $ 47,657 Fertilizer 35,931 10,137 - (3,781) 42,287 Oil & Gas 4,903 1,288 - - 6,191 ---------- ---------- ---------- ---------- ---------- $ 112,788 $ 15,345 $ - $ (31,998)b $96,135 ========== ========== ========== ========== ========== 1995: Sulphur $ 55,105 $ 2,643 $ - $ 14,206 c $ 71,954 Fertilizer 37,683 2,785 - (4,537) 35,931 Oil & Gas 3,657 1,257 - (11) 4,903 ---------- ---------- ---------- ---------- ---------- $ 96,445 $ 6,685 $ - $ 9,658b $ 112,788 ========== ========== ========== ========== ========== 1994: Sulphur $ 57,287 $ 1,041 $ - $ (3,223) $ 55,105 Fertilizer 38,437 2,310 - (3,064) 37,683 Oil & Gas 1,609 2,385 - (337) 3,657 ---------- ---------- ---------- ---------- ---------- $ 97,333 $ 5,736 $ - $ (6,624)b $96,445 ========== ========== ========== ========== ========
a. Includes a reclassification to short-term payables of $17.1 million.
b. Includes expenditures of $11.3 million in 1996, $10.5 million in 1995 and $11.2 million in 1994.
c. Includes $15.2 million of liabilities assumed in connection with the acquisition of the sulphur assets of Pennzoil Co. (see Note 7 to the Financial Statements).
Freeport-McMoRan Resource Partners, Limited Partnership
Exhibit Index
Exhibit Number
3.1 Amended and Restated Agreement of Limited Partnership of FRP dated as of May 29, 1987 (the "FRP Partnership Agreement") among FTX, Freeport Phosphate Rock Company and Geysers Geothermal Company, as general partners, and Freeport Minerals Company ("FMC"), as general partner and attorney-in-fact for the limited partners, of FRP. Incorporated by reference to Exhibit B to the Prospectus dated May 29, 1987 included in FRP's Registration Statement on Form S-1, as amended, as initially filed with the Commission on May 29, 1987 (Registration No. 33-13513).
3.2 Amendment to the FRP Partnership Agreement dated as of December 16, 1988 effected by FMC, as Administrative Managing General Partner, and FTX, as General Partner of FRP. Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1994.
3.3 Amendment to the FRP Partnership Agreement dated as of March 29, 1990 effected by FMC, as Administrative Managing General Partner, and FTX, as Managing General Partner, of FRP. Incorporated by reference to Exhibit 19.2 to the Quarterly Report on Form 10-Q of FRP for the quarter ended March 31, 1990 (the "FRP 1990 First Quarter Form 10-Q").
3.4 Amendment to the FRP Partnership Agreement dated as of April 6, 1990 effected by FTX, as Administrative Managing General Partner of FRP. Incorporated by reference to Exhibit 19.3 to the FRP 1990 First Quarter Form 10-Q.
3.5 Amendment to the FRP Partnership Agreement dated as of January 27, 1992 between FTX, as Administrative Managing General Partner, and FMRP , as Managing General Partner, of FRP. Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1991 (the "FRP 1991 Form 10-K").
3.6 Amendment to the FRP Partnership Agreement dated as of October 14, 1992 between FTX, as Administrative Managing General partner, and FMRP, as Managing General Partner, of FRP. Incorporated by reference to Exhibit 3.4 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1992 (the "FRP 1992 Form 10-K").
3.7 Amended and Restated Certificate of Limited Partnership of FRP dated June 12, 1986 (the "FRP Partnership Certificate"). Incorporated by reference to Exhibit 3.3 to FRP's Registration Statement on Form S-1, as amended, as initially filed with th Commission on June 20, 1986 (Registration No. 33-5561).
3.8 Certificate of Amendment to the FRP Partnership Certificate dated as of January 12, 1989. Incorporated by reference to Exhibit 3.6 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (the "FRP 1993 Form 10-K").
3.9 Certificate of Amendment to the FRP Partnership Certificate dated as of December 29, 1989. Incorporated by reference to Exhibit 19.1 to the FRP 1990 First Quarter Form 10-Q.
3.10 Certificate of Amendment to the FRP Partnership Certificate dated as of April 12, 1990. Incorporated by reference to Exhibit 19.4 to the FRP 1990 First Quarter Form 10-Q.
4.1 Deposit Agreement dated as of June 27, 1986 (the "Deposit Agreement") among FRP, The Chase Manhattan Bank, N.A. ("Chase") and Freeport Minerals Company ("Freeport Minerals"), as attorney-in-fact of those limited partners and assignees holding depositary receipts for units of limited partnership interest in FRP ("Depositary Receipts"). Incorporated by reference to Exhibit 28.4 to the Current Report on Form 8-K of FTX dated July 11, 1986.
4.2 Resignation dated December 26, 1991 of Chase as Depositary under the Deposit Agreement and appointment dated December 27, 1991 of Mellon Bank, N.A. ("Mellon") as successor Depositary, effective January 1, 1992. Incorporated by reference to Exhibit 4.5 to the FRP 1991 Form 10-K.
4.3 Service Agreement dated as of January 1, 1992 between FRP and Mellon pursuant to which Mellon serves as Depositary under the Deposit Agreement and Custodian under the Custodial Agreement. Incorporated by reference to Exhibit 4.6 to the FRP 1991 Form 10-K.
4.4 Amendment to the Deposit Agreement dated as of November 18, 1992 between FRP and Mellon. Incorporated by reference to Exhibit 4.4 to the FRP 1992 Form 10-K.
4.5 Form of Depositary Receipt. Incorporated by reference to Exhibit 4.5 to the FRP 1992 Form 10-K.
4.6 Custodial Agreement regarding the FRP Depositary unit Reinvestment Plan among FTX, FRP and Chase, effective as of April 1, 1987 (the "Custodial Agreement"). Incorporated by reference to Exhibit 19.1 to the Quarterly Report on Form 10-Q of FRP for the quarter ended June 30, 1987.
4.7 FRP Depositary Unit Reinvestment Plan. Incorporated by reference to Exhibit 4.4 to the FRP 1991 Form 10-K.
4.8 Second Amended and Restated Credit Agreement dated as of November 14, 1996 (the "FTX/FRP Credit Agreement") among FTX, FRP, the various financial institutions that are parties thereto (the "Banks"), The Chase Manhattan Bank (successor by merger to Chemical Bank) and The Chase Manhattan Bank (National Association), as Administrative Agent, FRP Collateral Agent, FTX Collateral Agent and Documentary Agent.
4.9 Subordinated Indenture as of October 26, 1990 (the "Subordinated Indenture") between FRP and Manufacturers Hanover Trust Company ("MHTC") as Trustee. Incorporated by reference to Exhibit 4.11 to the FRP 1993 Form 10-K.
4.10 First Supplemental Indenture dated as of February 15, 1994 between FRP and Chemical Bank, as Successor to MHTC, as Trustee, to the Subordinated Indenture providing for the issuance of $150,000,000 of aggregate principal amount of 8 3/4% Senior Subordinated Notes due 2004. Incorporated by reference to Exhibit 4.12 to the FRP 1993 Form 10-K.
4.11 Form of Senior Indenture (the "Senior Indenture") from FRP to Chemical Bank, as Trustee. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of FRP dated February 13, 1996.
4.12 Form of Supplemental Indenture dated February 14, 1996 from FRP to Chemical Bank, as Trustee, to the Senior Indenture providing for the issuance of $150,000,000 aggregate principal amount of 7% Senior Notes due 2008. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated February 16, 1996 of FRP.
10.1 Contribution Agreement dated as of April 5, 1993 between FRP and IGL (the "FRP-IGL Contribution Agreement"). Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of FRP dated July 15, 1993 (the "FRP July 15,1993 Form 8-K").
10.2 First Amendment dated as of July 1, 1993 to the FRP-IGL Contribution Agreement. Incorporated by reference to Exhibit 2.2 to the FRP July 15, 1993 Form 8-K.
10.3 Amended and Restated Partnership Agreement dated as of May 26, 1995 among IMC-Agrico GP Company, Agrico, Limited Partnership and IMC- Agrico MP Inc. Incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K of FRP for the fiscal year ended December 31, 1995 (the "FRP 1995 Form 10-K").
10.4 Amendment and Agreement dated as of January 23, 1996 to the Amended and Restated Partnership Agreement dated May 26, 1995 by and among IMC-Agrico MP, Inc., IMC Global Operations, Inc. and IMC-Agrico Company. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated February 13,1996 of FRP.
10.5 Amended and Restated Parent Agreement dated as of May 26, 1995 among IMC Global Operations, Inc., FRP, FTX and IMC-Agrico. Incorporated by reference to Exhibit 10.5 to the FRP 1995 Form 10-K.
10.6 Asset Purchase Agreement dated as of October 22, 1994 between FRP and Pennzoil Company (the "Asset Purchase Agreement"). Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of FRP dated January 18, 1995 (the "FRP January 18, 1995 8-K").
10.7 Amendment No. 1 dated as of January 3, 1995 to the Asset Purchase Agreement. Incorporated by reference to Exhibit 2.2 to the FRP January 18, 1995 8-K.
10.8 Exploration Agreement effective July 1, 1996 between McMoRan Oil & Gas Co. ("MOXY") and the Company. Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q of MOXY for the quarter ended June 30, 1996.
10.9 Letter Agreement dated February 28, 1997 between MOXY and the Company Incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K of MOXY for the fiscal year ended December 31, 1996.
12.1 FRP Computation of Ratio of Earnings to Fixed Charges.
13.1 Those portions of the 1996 Annual Report to unitholders of FRP that are incorporated herein by reference.
21.1 Subsidiaries of FRP.
23.1 Consent of Arthur Andersen LLP dated March 28, 1997.
23.2 Consent of Ernst & Young LLP dated March 28, 1997.
24.1 Powers of Attorney pursuant to which this report has been signed on behalf of certain directors of FTX.
27.1 FRP Financial Data Schedule.
99.1 Report of Ernst & Young LLP