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MAGMA COPPER CO. REPORTS NET INCOME OF $23.3 MILLION OR $0.50 PER SHARE FOR THE THIRD QUARTER

 MAGMA COPPER CO. REPORTS NET INCOME OF $23.3 MILLION
 OR $0.50 PER SHARE FOR THE THIRD QUARTER
 TUCSON, Ariz., Oct. 27 /PRNewswire/ -- Magma Copper Co. (NYSE: MCU) today reported net income of $23.3 million ($0.50 per share) for the three months ended Sept. 30, 1992. Earnings for third quarter 1992 were up 55 percent, compared to second quarter 1992 net income of $15.0 million ($0.32 per share), before extraordinary item, and more than doubled compared to third quarter 1991 net income of $11.5 million ($0.27 per share). Per share amounts are based on fully diluted shares outstanding.
 The increase in earnings for the quarter was primarily due to a 7 cent increase in copper prices and a reduction in net cash operating costs of 3 cents to $0.64 per pound for third quarter 1992. The earnings were also favorably impacted by a reduction in net interest expense partially offset by an increase, compared to third quarter 1991, in depreciation, depletion and amortization.
 Net income for the nine months ended Sept. 30, 1992 was $48.1 million ($1.02 per share), before extraordinary item, compared to $30.0 million ($0.70 per share), before the effect of accounting change, for the same period in 1991.
 Despite a 1 cent per pound decrease in copper price realized for the first nine months of 1992, compared to the first nine months of 1991, net income increased 60 percent due primarily to a 5 cent per pound decrease in net cash operating costs, a 13 percent increase in Magma source pounds sold and a $6.6 million reduction in net interest expense, partially offset by increased depreciation, depletion and amortization.
 J. Burgess Winter, Magma's president and chief executive officer, said: "We are pleased with our further cost reductions and congratulate all of our employees for the ongoing trend of increased productivity and efficiency."
 Sales for third quarter 1992 were $218 million, compared to $204 million for second quarter 1992 and $194 million for third quarter 1991.
 Magma's average copper price realized for third quarter 1992 was $1.07, compared to $1.00 for both second quarter 1992 and third quarter 1991. John F. Champagne, president of Magma Metals Co. commented: "Although the copper price has backed off since the end of the third quarter, the fundamentals of the copper market are still strong and our outlook for the copper price is favorable.
 "The third quarter rise in copper price enabled us to purchase puts covering 511 million pounds of 1993 copper production with a strike price of $0.95 for a cost of only one-half cent per pound or $2.7 million. This market strategy will preserve all of the upside potential of higher copper prices while ensuring adequate cash flow for capital projects by creating a copper price floor of $0.94 per pound in 1993."
 Magma sold 139 million pounds of copper produced from its own mines during third quarter 1992, compared to 149 million for second quarter 1992 and 135 million for third quarter 1991. From third- party sources Magma produced 52 million pounds of copper for third quarter 1992, compared to 44 million for second quarter 1992 and 50 million for third quarter 1991.
 Production from the smelting and refining operations, which includes copper processed from Magma's mines and third parties, was 154 million pounds of copper while Magma's leaching operations produced 39 million pounds of electrowon copper cathode during third quarter 1992, resulting in a record combined production of 193 million pounds, compared to 189 million pounds for second quarter 1992 and 180 million pounds for third quarter 1991.
 Net cash provided by operating activities was $40 million for third quarter 1992, compared to $39 million for second quarter 1992 and $20 million for third quarter 1991. Capital expenditures for the quarter were $16.4 million. Additionally, Magma issued an $8 million note payable related to the acquisition of the Florence property. Cash and marketable securities at the end of third quarter 1992 were $208 million, compared to $91 million at Dec. 31, 1991.
 During the third quarter, Magma received permits for a third converter and third acid plant at its smelter. Magma's smelter expansion could increase smelter capacity by 20 percent, or 120 million pounds per year. Feasibility studies are currently ongoing and are expected to be finalized by year-end.
 Magma Copper Co., one of the largest primary copper producers in the United States, produces high-quality copper cathode and rod for sale to customers worldwide. Magma has operations in San Manuel, Miami, Superior and Humboldt, Ariz., and Ely, Nev. Magma Metals Co., a wholly owned subsidiary, operates Magma's smelting and refining complex located in San Manuel which represents approximately 25 percent of the U.S. smelting capacity. Corporate headquarters are in Tucson.
 Financial and operating results follow.
 MAGMA COPPER CO.
 Selected Financial and Operating Data
 (In millions, except per pound amounts)
 Three months ended Nine months ended
 Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
 1992 1992 1991 1992 1991
 Electrolytic
 pounds
 produced from:
 Magma sources-
 Electrorefined 102.8 104.3 95.4 301.6 287.1
 Electrowon
 (SXEW) 38.7 39.7 34.5 114.8 94.4
 Total Magma
 sources 141.5 144.0 129.9 416.4 381.5
 Custom sources-
 Purchased
 concentrates 32.4 28.5 32.7 91.7 53.9
 Other purchases 10.6 2.0 3.1 15.1 20.0
 Toll customers 8.9 13.9 14.1 45.5 63.8
 Total Custom
 sources 51.9 44.4 49.9 152.3 137.7
 Total production 193.4 188.4 179.8 568.7 519.2
 Pounds sold from:
 Magma sources 139.5 149.3 135.4 435.7 384.8
 Purchased
 concentrates 32.4 28.5 32.7 91.7 53.9
 Other purchases 10.6 2.0 3.2 15.1 20.9
 Total sales
 quantities(A) 182.5 179.8 171.3 542.5 459.6
 Sales of copper $197.3 $181.8 $174.9 $556.9 $475.2
 Price realized
 per pound
 (excluding rod
 premium) $1.07 $1.00 $1.00 $1.01 $1.02
 Cost of products
 sold:
 Cost of copper
 sold-
 Magma sources $104.8 $112.8 $105.1 $333.0 $306.7
 Custom sources-
 Purchased
 concentrates 32.4 28.4 32.2 88.0 53.4
 Other purchases 11.3 1.9 3.2 15.6 21.9
 Tolling 1.9 1.6 2.4 6.7 8.7
 Other 7.5 12.4 9.3 29.9 20.5
 Total 53.1 44.3 47.1 140.2 104.5
 Total cost of
 products sold $157.9 $157.1 $152.2 $473.2 $411.2
 Per pound cost of
 products sold:
 Magma sources
 Before credits $.75 $.75 $.78 $.76 $.80
 Credits(B) (.11) (.08) (.10) (.10) (.09)
 Net $.64 $.67 $.68 $.66 $.71
 Purchased
 concentrates $1.00 $1.00 $.98 $.96 $.99
 (A) Excludes copper processed for toll customers.
 (B) Deductions for rod premiums and profits on by-products, custom processing and toll conversion.
 MAGMA COPPER CO.
 Summary Statements of Consolidated Income
 (In thousands, except per share amounts)
 Three months ended Nine months ended
 Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
 1992 1992 1991 1992 1991
 Sales $218,286 $203,852 $193,793 $622,058 $527,106
 Cost of sales:
 Cost of
 products
 sold (157,855) (157,073) (152,151) (473,183) (411,237)
 Depreciation,
 depletion and
 amortization (13,979) (13,928) (11,980) (41,432) (32,060)
 Selling,
 general and
 administrative(4,452) (5,045) (4,099) (14,039) (12,563)
 Exploration,
 research and
 development (660) (461) (162) (1,856) (221)
 Income from
 operations 41,340 27,345 25,401 91,548 71,025
 Other income
 (expense):
 Interest
 expense (10,240) (11,838) (13,298) (34,909) (40,292)
 Interest
 income 2,603 2,592 1,963 7,047 5,820
 Other 1,113 931 871 3,021 878
 Income before
 income taxes,
 extraordinary
 item and
 cumulative
 effect of
 accounting
 change 34,816 19,030 14,937 66,707 37,431
 Income tax
 provision (11,508) (3,981) (3,400) (18,602) (7,400)
 Income before
 extraordinary
 item and
 cumulative
 effect of
 accounting
 change 23,308 15,049 11,537 48,105 30,031
 Extraordinary
 item:
 Premium on early
 repayment
 of debt,
 net of tax --- (3,020) --- (3,020) ---
 Cumulative
 effect of
 accounting
 change,
 net of tax --- --- --- --- (14,000)
 Net income $23,308 $12,029 $11,537 $45,085 $16,031
 Preferred stock
 dividends (3,489) (3,425) (2,007) (9,433) (5,836)
 Net income
 available for
 common stock $19,819 $8,604 $9,530 $35,652 $10,195
 Earnings per
 share of
 common stock,
 primary
 Income before
 extraordinary
 item and
 cumulative
 effect of
 accounting
 change $.68 $.45 $.38 $1.46 $1.00
 Extraordinary
 item:
 Premium on
 early repayment
 of debt,
 net of tax --- (.09) --- (.09) ---
 Cumulative effect
 of accounting
 change,
 net of tax --- --- --- --- (.47)
 Net income $.68 $.36 $.38 $1.37 $.53
 Preferred stock
 dividends (.10) (.10) (.06) (.29) (.19)
 Earnings per share
 of common stock $.58 $.26 $.32 $1.08 $.34
 Earning per share
 of common stock,
 fully diluted
 Income before
 extraordinary item
 and cumulative
 effect of
 accounting
 change $.50 $.32 $.27 $1.02 $.70
 Extraordinary
 item:
 Premium on early
 repayment of
 debt, net of tax --- (.06) --- (.06) ---
 Cumulative effect
 of accounting
 change,
 net of tax --- --- --- --- (.33)
 Net income $.50 $.26 $.27 $.96 $.34(A)
 (A) The company's convertible preferred stock is not included in the fully diluted calculation as its effects are antidilutive.
 MAGMA COPPER CO.
 Consolidated Balance Sheets
 (In thousands)
 Sept. 30, Dec. 31,
 Assets 1992 1991
 Current Assets:
 Cash $121,537 $57,348
 Marketable securities 86,839 34,000
 Accounts receivable 48,640 57,873
 Inventories:
 Metals 72,345 66,277
 Materials and supplies 23,393 25,215
 Prepaid expenses 6,693 7,910
 Total current assets 359,447 248,623
 Net Property, Plant and Mine
 Development 775,099 766,184
 Other 3,925 1,112
 Total Assets $1,138,471 $1,015,919
 Liabilities and Stockholders' Equity
 Current Liabilities:
 Accounts payable $13,713 $9,438
 Accrued liabilities 116,185 90,305
 Current portion of long-term debt 15,082 14,082
 Income taxes payable 2,056 ---
 Total current liabilities 147,036 113,825
 Accrued Pension, Retirement and
 Other Liabilities 56,332 59,628
 Deferred Income Taxes 106,486 92,466
 Long-Term Debt 373,638 340,923
 Stockholders' Equity:
 Series B preferred stock 9 9
 Class A common stock 42 42
 Class B common stock 267 259
 Capital in excess of par value 417,303 409,905
 Retained earnings 35,652 ---
 Dividend payable in common stock 3,284 1,366
 Unearned stock grant compensation (1,578) (2,504)
 Total stockholders' equity 454,979 409,077
 Total Liabilities and
 Stockholders' Equity $1,138,471 $1,015,919
 MAGMA COPPER CO.
 Consolidated Statements of Cash Flows
 (In thousands)
 Three months ended Nine months ended
 Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
 1992 1992 1991 1992 1991
 Net income $23,308 $12,029 $11,537 $45,085 $16,031
 Adjustments
 to reconcile
 net income
 to net cash
 provided by
 operating
 activities:
 Depreciation,
 depletion and
 amortization 13,979 13,928 11,980 41,432 32,060
 (Gain) loss on
 sale of assets (188) (349) (437) (919) 216
 Cumulative
 effect of
 accounting
 change,
 net of tax --- --- --- --- 14,000
 Other 309 309 309 927 1,052
 Total 37,408 25,917 23,389 86,525 63,359
 Change in
 certain assets
 and liabilities:
 (Increase)
 decrease in:
 Accounts
 receivable 3,149 (2,190) (5,180) 9,233 7,039
 Inventories (19,242) (8,771) (13,726) (5,073) (28,411)
 Prepaid
 expenses (2,589) (523) (672) 1,217 (2,371)
 Increase
 (decrease)
 in:
 Accounts
 payable and
 accrued
 expenses 16,481 18,575 16,003 30,155 27,219
 Income taxes
 payable (2,100) 4,156 1,336 2,056 (5,620)
 Accrued pension,
 retirement and
 other
 liabilities (974) (597) (1,733) (3,296) (2,299)
 Deferred income
 taxes 8,264 2,643 430 14,020 220
 Net change in
 certain
 assets and
 liabilities 2,989 13,293 (3,542) 48,312 (4,223)
 Net cash
 provided by
 operating
 activities 40,397 39,210 19,847 134,837 59,136
 Cash flows from
 investing
 activities:
 Capital
 expenditures (16,426) (15,213) (10,379) (42,775) (34,288)
 Marketable
 securities (7,697) (58,878) --- (52,839) ---
 Proceeds from
 sale of assets 760 719 657 2,175 559
 Other (1,006) (290) 707 (315) 2,641
 Net cash
 provided (used)
 by investing
 activities (24,369) (73,662) (9,015) (93,754) (31,088)
 Cash flows from
 financing
 activities:
 Long-term
 debt borrowings --- --- --- 125,000 ---
 Long-term debt
 repayment --- (100,000) --- (100,000) ---
 Debt issuance
 costs --- --- --- (2,500) ---
 Issuance of
 common stock
 under stock
 plans 226 200 --- 606 ---
 Net cash
 provided
 (used) by
 financing
 activities 226 (99,800) --- 23,106 ---
 Net increase
 (decrease)
 in cash 16,254 (134,252) 10,832 64,189 28,048
 Cash at the
 beginning of
 the period 105,283 239,535 130,842 57,348 113,626
 Cash at the
 end of the
 period $121,537(A) $105,283 $141,674 $121,537(A) $141,674
 Supplemental
 disclosure
 of cash flow
 information:
 Cash paid
 during the
 year for -
 Interest $7,402 $17,517 $8,799 $25,547 $34,643
 Income taxes $4,000 --- --- $4,000 $12,800
 Supplemental
 schedule of
 non-cash
 investing and
 financing
 activities:
 Purchase of
 property
 financed
 by note
 payable $8,000 --- --- $8,000 ---
 Issuance and
 accretion of
 non-interest-
 bearing notes
 as a preferred
 stock dividend $206 $198 $554 $715 $1,564
 (A) Does not include $87 million of highly liquid cash investments with initial maturities in excess of three months at Sept. 30, 1992.
 -0- 10/27/92
 /CONTACT: Richard P. Johnson, 602-575-5670, or Kimberly L. Wick, 602-575-5673, both of Magma Copper/
 (MCU) CO: Magma Copper Co. ST: Arizona IN: MNG SU: ERN


TS-JL -- SD001 -- 5193 10/27/92 08:59 EST
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Date:Oct 27, 1992
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