Cyprus Amax Minerals Reports a 1999 Third Quarter Loss of $11 Million Before Special Charges of $64 Million

DENVER (PROTEXT) - Cyprus Amax Minerals Company (NYSE: CYM) today reported a 1999 third quarter loss of $11 million or 17 cents loss per share, before special charges of $64 million, for a net loss of $75 million, or 88 cents loss per share. This compared with a 1998 loss from continuing operations of $31 million, or 38 cents loss per share, before after-tax gains of $26 million, for a net loss from continuing operations of $5 million, or 10 cents loss per share. This improvement, excluding the special items was primarily attributable to lower copper costs of 13 percent, lower exploration expenses, and lower net interest expense, partially offset by lower metal realizations. In the third quarter of 1999, Cyprus Amax recorded an after- tax charge of $64 million primarily for merger expenses with Asarco and legal settlements. In the third quarter of 1998, Cyprus Amax recorded an after-tax gain of $13 million from the sale of hedge positions by Kinross Gold Corporation, an after-tax gain of $10 million on the sale of an Oakbridge Ltd. coal mine in Australia, and an after-tax gain of $3 million on the sale of real estate. For the first nine months of 1999, Cyprus Amax reported a loss from continuing operations of $151 million, or $1.83 loss per share, compared with a 1998 loss from continuing operations of $58 million, or 77 cents loss per share. On September 30, 1999, Cyprus Amax announced that a definitive agreement had been signed under which Phelps Dodge will acquire Cyprus Amax for $7.61 in cash and 0.2203 Phelps Dodge shares per Cyprus Amax share on a fully prorated basis. This transaction is expected to close in the fourth quarter of 1999. Prior to entering into the agreement with Phelps Dodge, Cyprus Amax terminated its merger agreement with Asarco Incorporated and was required to pay to Asarco a $45 million break-up fee. Phelps Dodge shareholders have approved the merger and 89.6% of Cyprus Amax common shares have been acquired by Phelps Dodge. A special meeting of shareholders of Cyprus Amax will be held on December 2, 1999 in Phoenix, Arizona to approve the merger. On October 27, 1999, Cyprus Amax announced that it had completed the sale of its common shares of Kinross Gold Corporation. A syndicate of underwriters purchased approximately 89 million common shares of Kinross Gold at Canadian $4.00 per share for aggregate proceeds of Canadian $356 million (US $242 million). Cyprus Amax realized approximately US $233 million net of expenses from the transaction. THIRD QUARTER HIGHLIGHTS (ALL COMPARISONS ARE VERSUS THIRD QUARTER 1998 UNLESS OTHERWISE STATED): (Segment income is earnings before corporate overhead, interest, equity and other, income taxes, and minority interest.) COPPER/MOLYBDENUM -- Copper/Molybdenum earned $31 million, $6 million more than in 1998. -- Copper realizations averaged 78 cents per pound, 4 cents lower than in 1998. -- Copper production increased to 260 million pounds from 243 million pounds. -- Copper net cash costs dropped to 52 cents per pound, a reduction of 2 cents per pound. Excluding the molybdenum by- product credit; net cash costs were 7 cents per pound lower or 11 percent. -- Cost of goods sold dropped to 62 cents per pound, a reduction of 9 cents per pound. -- Copper price protection strategies are in place for the fourth quarter of 1999 that will ensure a minimum average realization on an LME basis of 69 cents per pound, at a cost of 2 cents per pound, on 200 million pounds of production and for the first quarter of 2000 that will ensure a minimum average realization on an LME basis of 71 cents per pound, at a cost of 2 cents per pound, on 200 million pounds of production. -- Primary molybdenum reported a loss of $1 million, $4 million lower than in 1998 primarily due to $1.01 per pound lower molybdenum realizations and lower production volumes due to the three-month shut- down at the Henderson mine, that began on July 1, 1999 in order to change over from train haulage to the new efficient conveyor system. The start-up in early October 1999 has progressed several weeks ahead of schedule. EXPLORATION -- Exploration expense was $4 million, $5 million lower than in 1998, principally due to constraining spending. OTHER -- All Other Minerals reported a loss of $27 million compared to earnings of $8 million in 1998. The $35 million variance is primarily due to settling litigation in the third quarter of 1999, with Coeur d' Alene Mines Corporation for $31.5 million, relating to Cyprus Amax's sale of the Golden Cross mine in 1993. -- Revenue of $309 million was $45 million lower than in 1998 due to lower copper and molybdenum realizations, and the absence of revenues from lithium. -- Equity Investments and Other incurred a loss of $11 million compared with earnings of $13 million in 1998. Oakbridge reported a loss of $5 million compared with 1998 earnings of $5 million. The 1998 results include a $10 million pre-tax gain on the sale of a coal mine in Australia. Kinross reported a loss of $4 million compared with 1998 earnings of $8 million. The 1998 results include a $13 million pre-tax gain for the recognition of the sale by Kinross Gold of the pre-merger Amax Gold hedging portfolio. -- Corporate expenses of $67 million were $56 million higher than in 1998 due to the Asarco merger related expenses. -- Net interest expense of $16 million was $16 million less than 1998 reflecting increased interest income from cash received from the coal sale and the significant reduction in debt. -- The $200 million borrowed against the Revolving Credit Agreement in the second quarter was repaid during the third quarter of 1999. -- On October 19, 1999 Cyprus Amax announced that it had called for redemption of all its $4.00 Series A Convertible Preferred Stock at a redemption price of $52.4778 per share, which includes accrued and unpaid dividends of $.8778 per share. The date of redemption is November 19, 1999. -- On October 22, 1999, Phelps Dodge and Cyprus Amax entered into a loan agreement whereby Cyprus Amax would loan Phelps Dodge $175 million at an interest rate of 6 percent per annum. On that date, Phelps Dodge drew down the $175 million and the loan matures on December 15, 1999. -- On October 27, 1999, the $100 million outstanding balance on Cyprus Amax's Term Loan facility was repaid. Actual results may vary materially from any forward-looking statement the Company makes. Refer to the Cautionary Statement and Risk Factors contained in the Company's most recent Form 10- K. To obtain a faxed copy of this or any Cyprus Amax news release, call 1-800-758-5804, ext. 224250. News releases can also be accessed via the Internet at the Cyprus Amax Web Site, http://www.cyprusamax.com. STATISTICAL PAGES FOLLOW Cyprus Amax Minerals Company Key Operating Data Three and Nine Months Ended September 30 Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 Copper/Molybdenum Copper Sales Volume - Millions of Lbs. 285 291 868 859 Produced Copper Sold - Millions of Lbs. 248 254 767 748 Copper Production - Millions of Lbs. 260 243 771 710 Average Realization - $/Lb. of Copper .78 .82 .71 .85 Cost of Sales - $/Lb. .62 .71 .63 .73 Net Cash Cost - $/Lb. .52 .54 .51 .56 Full Cost - $/Lb. .65 .69 .63 .71 Molybdenum Sales - Millions of Lbs. 14 13 42 45 Molybdenum Production - Millions of Lbs. 10 15 41 46 Average Realization - $/Lb. 4.06 5.07 4.10 5.16 Cyprus Amax Minerals Company Consolidated Statement of Income Three and Nine Months Ended September 30 (In Millions, Except Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 Revenue $ 309 $ 354 $ 869 $1,224 Costs and Expenses Cost of Sales 217 259 646 866 Selling and Administrative Expenses 105 18 139 87 Depreciation, Depletion, and Amortization 50 55 153 202 Write-Downs and Special Charges - - - 4 Exploration 4 9 11 34 Total Costs and Expenses 376 341 949 1,193 Income (Loss) From Operations (67) 13 (80) 31 Interest Income 15 3 22 10 Interest Expense (33) (35) (102) (123) Capitalized Interest 2 - 4 1 Equity Investments and Other (11) 13 (28) 12 Loss from Continuing Operations Before Income Taxes and Minority Interest (94) (6) (184) (69) Income Tax Benefit 20 2 34 11 Minority Interest (1) (1) (1) - Loss from Continuing Operations (75) (5) (151) (58) Income from Operations of Discontinued Domestic Coal Division, Net of Applicable Taxes - 24 16 45 Loss on Disposal of Domestic Coal Division, Net of Applicable Taxes - - (13) - Net Income (Loss) (75) 19 (148) (13) Preferred Stock Dividends (5) (5) (14) (14) Income (Loss) Applicable to Common Shares $ (80) $ 14 $ (162) $ (27) Earnings (Loss) Per Common Share Basic and Diluted(1) Loss from Continuing Operations $(.88) $(.10) $(1.83) $(.77) Income from Discontinued Domestic Coal Division, Net of Taxes $ - $ .26 $ .03 $ .49 Net Earnings (Loss) Per Common Share $(.88) $ .16 $(1.80) $(.28) Weighted Average Common Shares Outstanding Basic 90.5 92.9 90.5 93.4 Diluted 100.9 102.5 100.5 103.0 Common Shares Outstanding at End of Period 90.6 91.2 90.6 91.2 (1) Diluted earnings (loss) per share were anti-dilutive. Cyprus Amax Minerals Company Financial Summary by Business Segment Three and Nine Months Ended September 30 (In Millions) Three Months Ended September 30, Earnings (Loss) Sales Revenue from Operations 1999 1998 1999 1998 Copper/Molybdenum $297 $322 $ 31 $ 25 Exploration - - (4) (9) All Other Minerals 12 32 (27) 8 Total $309 $354 - 24 Corporate (67) (11) Interest, Equity and Other (27) (19) Loss from Continuing Operations Before Income Taxes and Minority Interest (94) (6) Income Tax Benefit 20 2 Minority Interest (1) (1) Loss from Continuing Operations (75) (5) Income from Operations of Discontinued Domestic Coal Division, Net of Applicable Taxes - 24 Loss on Disposal of Domestic Coal Division, Net of Applicable Taxes - - Net Income (Loss) $(75) $ 19 Nine Months Ended September 30, Earnings (Loss) Sales Revenue from Operations 1999 1998 1999 1998 Copper/Molybdenum $844 $1,011 $ 53 $ 107 Exploration - - (11) (34) All Other Minerals 25 213 (31) (10) Total $869 $1,224 11 63 Corporate (91) (32) Interest, Equity and Other (104) (100) Loss from Continuing Operations Before Income Taxes and Minority Interest (184) (69) Income Tax Benefit 34 11 Minority Interest (1) - Loss from Continuing Operations (151) (58) Income from Operations of Discontinued Domestic Coal Division, Net of Applicable Taxes 16 45 Loss on Disposal of Domestic Coal Division, Net of Applicable Taxes (13) - Net Income (Loss) $(148) $(13) Cyprus Amax Minerals Company Consolidated Balance Sheet (In Millions) September 30, December 31, ASSETS 1999 1998 Cash and Cash Equivalents $ 845 $ 353 Accounts Receivable, Net 38 48 Notes Receivable, Net 53 69 Inventories 301 386 Prepaid Expenses 73 52 Deferred Income Taxes 2 13 Total Current Assets 1,312 921 Properties - At Cost, Net 2,543 3,842 Equity Investments 317 345 Other Assets 175 233 Total Assets $4,347 $5,341 LIABILITIES and SHAREHOLDERS' EQUITY Short-Term Debt and Current Portion of Long-Term Debt $ 83 $ 161 Other Current Liabilities 320 510 Long-Term Debt 1,532 1,677 Capital Lease Obligations 16 41 Deferred Employee and Retiree Benefits 178 345 Deferred Closure, Reclamation and Environmental 187 300 Deferred Income Taxes 4 57 Other Noncurrent Liabilities and Deferred Credits 29 59 Minority Interest 21 34 Total Shareholders' Equity 1,977 2,157 Total Liabilities and Shareholders' Equity $4,347 $5,341 Cyprus Amax Minerals Company Consolidated Statement of Cash Flows Nine Months Ended September 30 (In Millions) Nine Months Ended September 30, 1999 1998 Operating Activities Net Loss $ (148) $ (13) Adjustments to Reconcile Net Loss to Net Cash Provided by (Used for) Operating Activities Depreciation, Depletion, and Amortization 195 284 Write-Downs and Special Charges - 4 Deferred Income Taxes (56) - Loss (Gain) on Sale of Assets (4) 10 Changes in Assets and Liabilities Net of Effects from Businesses Acquired/Sold (125) (95) Other, Net 31 21 Net Cash Provided by (Used for) Operating Activities (107) 211 Investing Activities Capital Expenditures (168) (170) Capitalized Interest (4) (4) Advances and Investments, Net to Affiliates (12) (62) Collections on Notes Receivable 3 4 Net Proceeds from Sale of Assets 1,028 115 Cash Effect of Deconsolidating Amax Gold Inc. - (18) Net Cash Provided by (Used for) Investing Activities 847 (135) Financing Activities Net Borrowings on Short-Term Debt 19 21 Payments on Short-Term Debt (46) (24) Net Proceeds from Issuance of Long-Term Debt 39 3 Payments on Debt and Other Obligations (172) (51) Payments on Capital Lease Obligations (47) (30) Stock Activity, Net - (5) Dividends to Minority Interests - (4) Dividends Paid (41) (70) Net Cash Used For Financing Activities (248) (160) Net Increase (Decrease) in Cash and Cash Equivalents 492 (84) Cash and Cash Equivalents at Beginning of Year 353 250 Cash and Cash Equivalents at End of Period $ 845 $ 166 ots Original Text Service: Cyprus Amax Minerals Company Internet: http://www.newsaktuell.de CONTACT: Gerald J. Malys, Senior Vice President & Chief Financial Officer, 303-643-5060, or John Taraba, Vice President & Controller, 303-643-5244, both of Cyprus Amax Minerals Company Company News On-Call: http://www.prnewswire.com/comp/224250.html or fax, 800-758-5804, ext. 224250 Web site: http://www.cyprusamax.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. Protext is a commercial service providing distribution of press releases from clients, who are identified in the text of Protext reports and who bear full responsibility for their contents. PROTEXT