Item 2. PROPERTIES
Used in cement and related products segments
Cement. PRC owns, in fee, a cement plant located in Ponce, Puerto Rico on a 25-acre site. The Ponce cement plant operates under the dry process technology and during the last fiscal year 5,529,836 barrels of cement were produced. During that same period, 4,617,826 barrels of clinker were produced for an approximate 85% (87% in 1995) of its effective kiln's clinker production capacity.
The Company owns, in fee, properties containing adequate deposits of limestone and other raw materials, used in the production of grey cement, which directly adjoin or are close to the plant sites.
PRC leases, under a long-term lease, expiring in year 2004, with the municipality of Ponce, a parcel of land on which it installed certain facilities for receiving and handling coal. The coal received through said facility is used as fuel in the Company's cement and hydrated lime manufacturing operations.
Lime. PRC also owns, in fee, a hydrated lime manufacturing plant that is located within the Ponce cement plant premises. The lime plant produced 43,848 tons of lime and was operated at approximately 95% of its capacity.
Ready-mixed concrete. PRC owns, in fee, twenty batching plants used in the production of ready-mixed concrete. Three of these batching plants are located on sites owned, in fee, by the Company with the remaining, located on leased properties with terms ranging from one to ten years. The Company does not expect any problem in the renewal of these contracts.
The Company also owns a fleet of 219 ready-mixed trucks.
During l996, PRC continued the repairs and maintenance program on its plants. The Company believes that its plants are currently in good condition and properly maintained.
Used in paper and packaging segment
The manufacturing plant of the St. Regis Paper and Bag Division is located on a site owned by the Company in fee in Ponce, Puerto Rico. The Company believes the plant to be in good condition and properly maintained.
Used in realty operations
PRC and one of its subsidiaries own, in fee, and hold for future development and sale, approximately 532 acres of land throughout Puerto Rico.
Used for office facilities
The Company and its subsidiaries own a one story building housing its executive offices located in the Amelia Industrial Park, Guaynabo, Puerto Rico. It also owns an office facility located in a building in Hato Rey, Puerto Rico.
RMC's administrative offices are located on leased property in Carolina, Puerto Rico.
Information about leased properties is incorporated by reference from the Annual Report, page 28, section entitled "Notes to Consolidated Financial Statements, Note 14 /Lease Commitments."
Item 3.
Item 3. LEGAL PROCEEDINGS
There are presently pending against the Company the legal proceedings described in the Annual Report, page 29, section entitled "Notes to Consolidated Financial Statements, Note 16/Contingent Liabilities and Other Commitments," furnished pursuant to Item 14, to which reference is hereby made and which is incorporated by reference herein.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.
PART II
Items 5 through 8 of Part II of this report are omitted as permitted by General Instruction G(2) since the information required by such items is contained in the Company's Annual Report which is incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item l0. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
(a) Identification of Directors
Information required herein is contained in a definitive Proxy Statement for use in connection with the Company's Annual Meeting of Stockholders to be held on May 7, l997 filed with the Commission pursuant to Regulation l4A (the "Proxy Statement") pages 2 to 8, section entitled "Information about Nominees, Directors and Principal Stockholders" and is incorporated herein by reference.
(b) Identification of Executive Officers. (See Item 1. Business Section. Section (e).)
Item 11. EXECUTIVE COMPENSATION
Information required by Item 11 is contained in the Proxy Statement, pages 11 to 20, section entitled "Executive Compensation" through and including the section entitled "Certain Transactions with Management," and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by Item l2 is contained in the Proxy Statement, pages 2 to 10, sections entitled "Information about Nominees, Directors and Principal Stockholders" and "Security Ownership of Certain Beneficial Owners," and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by Item 13 is contained in the Proxy Statement, pages 19 to 20, sections entitled "Compensation Committee Interlocks and Insider Participation" and "Certain Transactions with Management" and is incorporated herein by reference.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report on Form 10-K:
1. Financial Statements incorporated by reference to the Annual Report, pages 19 to 21; and
2. Financial statement schedules and supplementary data required by Item 8
Item 8 of Form 10-K filed herewith.
The financial statement schedules required by Item 14(d) of Form 10-K are excluded since the Company is primarily an operating company. All subsidiaries included in the consolidated financial statements being filed, in the aggregate, do not have minority equity interest and/or indebtedness to any person other than the Company or the consolidated subsidiaries in amounts which together exceed l0% of PRC's total consolidated assets at December 3l, l996.
(b) Reports on Form 8-K: None.
(c) Exhibits required by Section 601 Regulation S-K:
3. Certificate of Incorporation and By-laws
l. Certificate of Incorporation and amendment thereto filed as an exhibit to Form S-l on March 25, 1963, with (i) composite copy of the Certificate of Incorporation dated May l6, l983 filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1983, (ii) amendments dated May 6, 1987 filed as an exhibit to Form 10-Q for the fiscal quarter ended June 30, 1987, and (iii) amendment dated May 5, 1993 (increasing the number of authorized shares of common stock from 10 million to 20 million) filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1993.*
2. By-Laws of the Company, as amended, filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1987, with (i) amendment dated January 1993 filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1993,* and (ii) amendment dated December 22, 1994, filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1994.*
l0. Material contracts
10.1 Coal Purchase/Sale Agreement between PRC and Carbones de Colombia, S.A. dated as of December 14, 1982 filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1982.* Copy of addendum No. 5 which changed the quantity of coal purchases to 100,000 tons per year through the year 2000, was filed as an exhibit to Form 10-Q for the fiscal quarter ended March 31, 1992.*
10.2 (a) Consolidated and restated loan agreement dated as of September 27, 1985 among PRC, PRC's Guarantors and the Government Development Bank for Puerto Rico for approximately $18.3 million encompassing all outstanding debt of the Company to the bank as of that date.*
(b) Indenture trust agreement dated September 27, l985 between PRC as grantor and Banco de Ponce as trustee for the benefit of the Government Development Bank for Puerto Rico.*
(Both documents listed above in this paragraph l0.2 were filed as exhibits to a Current Report on Form 8-K dated September l985 and are related to the early extinguishment of the debt transaction described therein.)
10.3 Loan agreement between PRC and Banco Popular de Puerto Rico in the principal amount of $10,000,000 dated as of November 6, 1987 filed as an exhibit to a Current Report on Form 8-K dated November 1987.* Letter dated January 17, 1992, which modifies certain terms of such loan agreement (including a reduction in the interest rate and a change in the original repayment schedule from quarterly payments to annual payments) filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1991.*
10.4 Form of Severance Compensation Agreement executed by PRC during the third quarter of 1989 with a consultant and 18 of the PRC's key officers, filed as an exhibit to Form 10-Q for the fiscal quarter ended September 30, 1989.**
10.5 Loan agreement between PRC and Banco Popular de Puerto Rico in the principal amount of $8,000,000 dated as of December 8, 1993 (used to finance the conversion to cement grinding of two existing slurry mills) and letter dated July 11, 1994 (amending certain sections of the original loan agreement) filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1994.*
10.6 Loan agreement between PRC and The Bank of Nova Scotia in the principal amount of $16,000,000 dated as of February 26, 1993 (used in the financing of the conversion of two existing slurry mills to cement grinding) filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1994.*
10.7 Loan agreement between PRC and Banco Popular de Puerto Rico in the principal amount of $6,000,000 dated August 2, 1993 (to pay a $3 million scheduled installment and an optional $3 million payment on a long-term debt due August 1993) and letter dated July 11, 1994 (amending certain sections of the original loan agreement) filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1994.*
10.8 Loan agreement between PRC and Banco Popular de Puerto Rico in the principal amount of $7,000,000 dated September 15, 1994 (used to refinance the outstanding balance of another loan) filed as an exhibit to Form 10-Q for the fiscal quarter ended September 30, 1994.*
10.9 Amendment to the Consulting Agreement between PRC and Antonio Luis Ferre dated January 1, 1995 filed as an exhibit to Form 10-K for the fiscal year ended December 31, 1994.**
10.10 Note Purchase Agreement dated January 27, 1997, with respect to $50,000,000 of Series A and $20,000,000 of Series B Senior Secured Notes due January 27, 2017 (used to refinance the outstanding principal balances of various long-term debt).
13. Annual Report to security holders for the year ended December 3l, l996.
21. Subsidiaries of the Company are included as part of the Annual Report to security holders, page 33, section entitled "Subsidiaries." All of the Company's subsidiaries are incorporated under the laws of the Commonwealth of Puerto Rico, except for Caribbean Cement Carriers Corporation, which is incorporated under the laws of the Republic of Panama, and Ferre Export Corporation, which is incorporated under the laws of the state of New York.
23. Consent of Price Waterhouse, independent public accountants.
27. Financial Data Schedule (for SEC use only).
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* Incorporated herein by reference.
** Exhibit constitutes a management contract or compensatory plan or arrangement required to be filed pursuant to Item 601 (b) (10) (iii).
S I G N A T U R E S
Pursuant to the requirements of Section l3 or 15(d) of the Securities Exchange Act of l934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PUERTO RICAN CEMENT COMPANY, INC. (REGISTRANT)
Date: March 26, 1997 By: /s/ MIGUEL NAZARIO ----------------------------- Miguel Nazario President and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of l934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Date: March 26, 1997 By: /s/ MIGUEL NAZARIO ---------------------------------- Miguel Nazario President and Chief Executive Officer and Director
Date: March 26, 1997 By: /s/ ANTONIO LUIS FERRE ---------------------------------- Antonio Luis Ferre Chairman of the Board and Director
Date: March 26, 1997 By: /s/ ALBERTO M. PARACCHINI --------------------------------- Alberto M. Paracchini Director and Vice Chairman of the Board
Date: March 26, 1997 By: /s/ HECTOR DEL VALLE --------------------------------- Hector del Valle Director and Vice Chairman of the Board
Date: March 26, 1997 By: /s/ ANTONIO L. FERRE RANGEL --------------------------------- Antonio L. Ferre Rangel Vice President of Operations and Strategic Planning and Director
Date: March 26, 1997 By: /s/ JOSE O. TORRES --------------------------------- Jose O. Torres Vice President of Finance, Sales, Assistant Secretary and Treasurer
PUERTO RICAN CEMENT COMPANY, INC. AND SUBSIDIARY COMPANIES
INDEX
SCHEDULE VIII PUERTO RICAN CEMENT COMPANY, INC. AND SUBSIDIARY COMPANIES VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
(1) Additions, include $505,013 of ready mixers acquired in November 21, 1995.