Delaware
|
74-2480931
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer Identification No.)
|
One
North Central Avenue
|
|
Phoenix,
Arizona
|
85004-4414
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(602)
366-8100
|
|
(Registrant's
telephone number, including area
code)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Stock, par value $0.10 per share
|
New
York Stock Exchange
|
|
7% Convertible
Senior Notes due 2011 of the registrant
|
New
York Stock Exchange
|
|
6¾%
Mandatory Convertible Preferred Stock, par value $0.10 per
share
|
New
York Stock Exchange
|
Portions
of our Proxy Statement for our 2008 Annual Meeting are incorporated by
reference into Part III (Items 10, 11, 12, 13 and 14) of this
report.
|
Page
|
|
1
|
|
1
|
|
46
|
|
59
|
|
59
|
|
63
|
|
63
|
|
63
|
|
63
|
|
66
|
|
69
|
|
127
|
|
186
|
|
186
|
|
186
|
|
186
|
|
186
|
|
186
|
|
186
|
|
187
|
|
187
|
|
188
|
|
188
|
|
S-1
|
|
F-1
|
|
E-1
|
·
|
a
large-diameter, column-leach facility for testing run-of-mine material,
which is capable of processing up to approximately 550 metric tons of ore
annually;
|
·
|
a
continuous SX/EW test facility capable of producing approximately 3,000
pounds of copper cathode per day;
|
·
|
a
small-diameter, column-leach facility with a capacity of about 250
individual tests per year for crushed
material;
|
·
|
a
metallurgical laboratory for the development of biological leaching
processes and enhancements, and other biological
applications;
|
·
|
a
demonstration facility for production of new copper products;
and
|
·
|
a
state-of-the-art material characterization laboratory with advanced
mineralogy, analytical chemistry and metallography
capabilities.
|
COPPER, Pro
Forma
|
Years
Ended December 31,
|
||||||||||||||
(millions
of recoverable pounds)
|
2007
a
|
2006
a
|
2005
a
|
2004
a
|
2003
a
|
||||||||||
MINED COPPER
(FCX’s net
interest in %)
|
|||||||||||||||
North
America
|
|||||||||||||||
Morenci
(85%)
|
687
|
b
|
693
|
b
|
680
|
b
|
715
|
b
|
715
|
b
|
|||||
Bagdad
(100%)
|
202
|
165
|
201
|
220
|
214
|
||||||||||
Sierrita
(100%)
|
150
|
162
|
158
|
155
|
151
|
||||||||||
Chino
(100%)
|
190
|
186
|
210
|
183
|
55
|
||||||||||
Tyrone
(100%)
|
50
|
64
|
81
|
86
|
114
|
||||||||||
Miami
(100%)
|
20
|
19
|
25
|
20
|
36
|
||||||||||
Tohono
(100%)
|
3
|
5
|
5
|
-
|
-
|
||||||||||
Safford
(100%)
|
1
|
-
|
-
|
-
|
-
|
||||||||||
Other
(100%)
|
17
|
11
|
5
|
5
|
11
|
||||||||||
Total
North America
|
1,320
|
c
|
1,305
|
1,365
|
1,384
|
1,296
|
|||||||||
South
America
|
|||||||||||||||
Cerro
Verde (53.56%)
|
594
|
222
|
206
|
195
|
193
|
||||||||||
Candelaria
(80%)
|
399
|
374
|
359
|
441
|
469
|
||||||||||
Ojos
del Salado (80%)
|
54
|
55
|
62
|
20
|
-
|
||||||||||
El
Abra (51%)
|
366
|
482
|
464
|
481
|
499
|
||||||||||
Total
South America
|
1,413
|
c
|
1,133
|
1,091
|
1,137
|
1,161
|
|||||||||
Indonesia
|
|||||||||||||||
Grasberg
(90.64%)
|
1,151
|
d
|
1,201
|
d
|
1,456
|
d
|
997
|
d
|
1,292
|
d
|
|||||
Consolidated
basis
|
3,884
|
3,639
|
3,912
|
3,518
|
3,749
|
||||||||||
Less
minority participants’ share
|
653
|
537
|
543
|
512
|
550
|
||||||||||
Net
equity interest
|
3,231
|
3,102
|
3,369
|
3,006
|
3,199
|
||||||||||
GOLD, Pro
Forma
|
|||||||||||||||
(thousands
of recoverable ounces)
|
|||||||||||||||
MINED GOLD
(FCX’s net
interest in %)
|
|||||||||||||||
North
America (100%)
|
15
|
b
|
19
|
b
|
17
|
13
|
2
|
||||||||
South
America (80%)
|
116
|
e
|
112
|
117
|
122
|
127
|
|||||||||
Indonesia
(90.64%)
|
2,198
|
d
|
1,732
|
d
|
2,789
|
d
|
1,456
|
d
|
2,463
|
d
|
|||||
Consolidated
basis
|
2,329
|
1,863
|
2,923
|
1,591
|
2,592
|
||||||||||
Less
minority participants’ shares
|
229
|
184
|
284
|
160
|
256
|
||||||||||
Net
equity interest
|
2,100
|
1,679
|
2,639
|
1,431
|
2,336
|
||||||||||
MOLYBDENUM, Pro
Forma
|
|||||||||||||||
(millions
of recoverable pounds)
|
|||||||||||||||
MINED MOLYBDENUM
(FCX’s
net interest in %)
|
|||||||||||||||
Henderson
(100%)
|
39
|
f
|
37
|
32
|
28
|
22
|
|||||||||
By-product
– North America (100%)
|
30
|
b
|
31
|
b
|
30
|
29
|
30
|
||||||||
By-product
– Cerro Verde (53.56%)
|
1
|
-
|
-
|
-
|
-
|
||||||||||
Consolidated
basis
|
70
|
|
68
|
62
|
57
|
52
|
|||||||||
a.
|
Includes
Phelps Dodge’s pre-acquisition results for comparative purposes
only.
|
b.
|
Amounts
are net of Morenci’s 15 percent joint venture partner
interest.
|
c.
|
Includes North
American copper production of 258 million pounds and South American copper
production of 259 million pounds for Phelps Dodge's pre-acquisition
results.
|
d.
|
Amounts
are net of Grasberg’s joint venture partner’s interest, which varies in
accordance with terms of the joint venture
agreement.
|
e.
|
Includes gold
production of 21 thousand ounces for Phelps Dodge's pre-acquisition
results.
|
f.
|
Includes molybdenum
production of 14 million pounds for Phelps Dodge's pre-acquistion
results.
|
Years
Ended December 31,
|
|||||||||||||||
COPPER,
Pro Forma
(millions of
recoverable pounds)
|
2007
a
|
2006
a
|
2005
a
|
2004
a
|
2003
a
|
||||||||||
MINED COPPER
(FCX’s net
interest in %)
|
|||||||||||||||
North
America
|
|||||||||||||||
Morenci
(85%)
|
693
|
b
|
692
|
b
|
680
|
b
|
715
|
b
|
716
|
b
|
|||||
Bagdad
(100%)
|
200
|
165
|
209
|
224
|
222
|
||||||||||
Sierrita
(100%)
|
157
|
161
|
165
|
158
|
159
|
||||||||||
Chino
(100%)
|
186
|
186
|
209
|
183
|
52
|
||||||||||
Tyrone
(100%)
|
53
|
64
|
81
|
86
|
114
|
||||||||||
Miami
(100%)
|
24
|
19
|
29
|
22
|
40
|
||||||||||
Tohono
(100%)
|
3
|
5
|
5
|
-
|
-
|
||||||||||
Safford
(100%)
|
-
|
-
|
-
|
-
|
-
|
||||||||||
Other
(100%)
|
16
|
11
|
5
|
5
|
13
|
||||||||||
Total
North America
|
1,332
|
c
|
1,303
|
1,383
|
1,393
|
1,316
|
|||||||||
South
America
|
|||||||||||||||
Cerro
Verde (53.56%)
|
587
|
214
|
205
|
196
|
191
|
||||||||||
Candelaria
(80%)
|
393
|
370
|
359
|
446
|
469
|
||||||||||
Ojos
del Salado (80%)
|
54
|
55
|
62
|
21
|
-
|
||||||||||
El
Abra (51%)
|
365
|
487
|
467
|
482
|
503
|
||||||||||
Total
South America
|
1,399
|
c
|
1,126
|
1,093
|
1,145
|
1,163
|
|||||||||
Indonesia
|
|||||||||||||||
Grasberg
(90.64%)
|
1,131
|
d
|
1,201
|
d
|
1,457
|
d
|
992
|
d
|
1,296
|
d
|
|||||
Consolidated
basis
|
3,862
|
3,630
|
3,933
|
3,530
|
3,775
|
||||||||||
Less
minority participants’ share
|
647
|
535
|
545
|
513
|
550
|
||||||||||
Net
equity interest
|
3,215
|
3,095
|
3,388
|
3,017
|
3,225
|
||||||||||
Consolidated
sales from mines
|
3,862
|
3,630
|
3,933
|
3,530
|
3,775
|
||||||||||
Purchased
copper
|
650
|
736
|
821
|
866
|
749
|
||||||||||
Total
consolidated sales
|
4,512
|
4,366
|
4,754
|
4,396
|
4,524
|
||||||||||
Average
realized price per pound
|
|||||||||||||||
Excluding
hedging
|
$3.28
|
$3.06
|
$1.76
|
$1.33
|
$0.82
|
||||||||||
Including
hedging
|
$3.23
|
e
|
$2.79
|
e
|
$1.67
|
e
|
$1.33
|
$0.82
|
|||||||
GOLD, Pro Forma
(thousands of recoverable
ounces)
|
|||||||||||||||
MINED GOLD
(FCX’s net
interest in %)
|
|||||||||||||||
North
America (100%)
|
21
|
b
|
19
|
b
|
18
|
12
|
7
|
||||||||
South
America (80%)
|
114
|
f
|
111
|
117
|
122
|
127
|
|||||||||
Indonesia
(90.64%)
|
2,185
|
d
|
1,736
|
d
|
2,790
|
d
|
1,443
|
d
|
2,470
|
d
|
|||||
Consolidated
|
2,320
|
1,866
|
2,925
|
1,577
|
2,604
|
||||||||||
Less
minority participants’ shares
|
228
|
185
|
285
|
159
|
257
|
||||||||||
Net
|
2,092
|
1,681
|
2,640
|
1,418
|
2,347
|
||||||||||
Consolidated
sales from mines
|
2,320
|
1,866
|
2,925
|
1,577
|
2,604
|
||||||||||
Purchased
gold
|
6
|
12
|
12
|
20
|
35
|
||||||||||
Total
consolidated sales
|
2,326
|
1,878
|
2,937
|
1,597
|
2,639
|
||||||||||
Average
realized price per ounce
|
$681.80
|
$566.11
|
g
|
$453.80
|
$410.85
|
$364.40
|
|||||||||
MOLYBDENUM,
Pro Forma
(millions of recoverable
pounds)
|
|||||||||||||||
MINED
MOYBDENUM - Consolidated basis
|
69
|
h
|
69
|
60
|
63
|
54
|
|||||||||
Purchased
molybdenum
|
9
|
8
|
13
|
13
|
8
|
||||||||||
Total
consolidated sales
|
78
|
77
|
73
|
76
|
62
|
||||||||||
Average
realized price per pound
|
$25.87
|
$21.87
|
$25.89
|
$12.71
|
$5.78
|
|
|
|
a.
|
Includes Phelps Dodge’s pre-acquisition results for comparative purposes only. |
b.
|
Amounts
are net of Morenci’s joint venture partner’s 15 percent
interest.
|
c.
|
Includes
North American copper sales of 283 million pounds and South American
copper sales of 222 million pounds for Phelps Dodge’s pre-acquisition
results.
|
d.
|
Amounts
are net of Grasberg’s joint venture partner’s interest, which varies in
accordance with terms of the joint venture
agreement.
|
e.
|
Includes
the impact of hedging losses related to copper price protection
programs.
|
f.
|
Includes
gold sales of 18 thousand ounces for Phelps Dodge’s pre-acquisition
results.
|
g.
|
Amount
was approximately $606 per ounce before a loss on redemption of FCX’s
Gold-Denominated Preferred Stock, Series
II.
|
h.
|
Includes
molybdenum sales of 17 million pounds for Phelps Dodge’s pre-acquisition
results.
|
a.
|
Consolidated
basis reserves represent estimated metal quantities after reduction for
joint venture partner interests at the Morenci mine in North America and
at the Grasberg minerals district in
Indonesia.
|
b.
|
Net
equity interest represents our net ownership interest (
i.e.,
estimated
consolidated reserves further reduced for minority
interests).
|
·
|
g/t
– grams per metric ton
|
·
|
DOZ/ESZ
– Deep Ore Zone/Ertsberg Stockwork Zone. In prior years these ore bodies
were shown separately.
|
·
|
MLZ/DMLZ
– Mill Level Zone/Deep Mill Level Zone. In prior years these ore bodies
were shown separately.
|
·
|
Moly
– Molybdenum
|
·
|
ROM
– Run of Mine
|
Recoverable Proven and
Probable Reserves
|
||||||||||||||||||||||||
Estimated at December
31, 2007
|
||||||||||||||||||||||||
Average
Ore Grade
|
Recoveries
|
|||||||||||||||||||||||
Processing
Method
|
Proven
and Probable
Million
Metric
tons
|
Copper
%
|
Gold
g/t
|
Moly
%
|
Silver
g/t
|
Cobalt
%
|
Copper
%
|
Gold
%
|
Moly
%
|
Silver
%
|
Cobalt
%
|
|||||||||||||
North
America
|
||||||||||||||||||||||||
Morenci
|
Mill
|
235
|
0.53
|
-
|
0.022
|
-
|
-
|
78.5
|
-
|
29.7
|
-
|
-
|
||||||||||||
Crushed
leach
|
469
|
0.56
|
-
|
-
|
-
|
-
|
76.7
|
-
|
-
|
-
|
-
|
|||||||||||||
ROM
leach
|
2,114
|
0.19
|
-
|
-
|
-
|
-
|
41.7
|
-
|
-
|
-
|
-
|
|||||||||||||
Bagdad
|
Mill
|
590
|
0.35
|
0.004
|
0.022
|
1.14
|
-
|
84.8
|
60.0
|
72.3
|
70.0
|
-
|
||||||||||||
ROM
leach
|
238
|
0.12
|
-
|
-
|
-
|
-
|
27.3
|
-
|
-
|
-
|
-
|
|||||||||||||
Chino
|
Mill
|
56
|
0.63
|
0.034
|
0.016
|
0.48
|
-
|
78.2
|
77.9
|
37.0
|
77.9
|
-
|
||||||||||||
ROM
leach
|
108
|
0.44
|
-
|
-
|
-
|
-
|
61.9
|
-
|
-
|
-
|
-
|
|||||||||||||
Cobre
|
ROM
leach
|
77
|
0.40
|
-
|
-
|
-
|
-
|
66.9
|
-
|
-
|
-
|
-
|
||||||||||||
Miami
|
ROM
leach
|
102
|
0.39
|
-
|
-
|
-
|
-
|
60.1
|
-
|
-
|
-
|
-
|
||||||||||||
Safford
|
Crushed
leach
|
445
|
0.40
|
-
|
-
|
-
|
-
|
67.6
|
-
|
-
|
-
|
-
|
||||||||||||
ROM
leach
|
104
|
0.21
|
-
|
-
|
-
|
-
|
19.6
|
-
|
-
|
-
|
-
|
|||||||||||||
Sierrita
|
Mill
|
1,053
|
0.26
|
0.003
|
0.030
|
1.03
|
-
|
85.4
|
60.0
|
84.7
|
70.0
|
-
|
||||||||||||
ROM
leach
|
9
|
0.18
|
-
|
-
|
-
|
-
|
49.2
|
-
|
-
|
-
|
-
|
|||||||||||||
Tyrone
|
ROM
leach
|
191
|
0.32
|
-
|
-
|
-
|
-
|
64.6
|
-
|
-
|
-
|
-
|
||||||||||||
Henderson
|
Mill
|
122
|
-
|
-
|
0.193
|
-
|
-
|
-
|
-
|
86.1
|
-
|
-
|
||||||||||||
Climax
|
Mill
|
165
|
-
|
-
|
0.165
|
-
|
-
|
-
|
-
|
88.6
|
-
|
-
|
||||||||||||
6,078
|
||||||||||||||||||||||||
South
America
|
||||||||||||||||||||||||
Cerro
Verde
|
Mill
|
1,456
|
0.44
|
-
|
0.014
|
2.00
|
-
|
85.7
|
-
|
49.1
|
40.9
|
-
|
||||||||||||
Crushed
leach
|
252
|
0.47
|
-
|
-
|
-
|
-
|
79.4
|
-
|
-
|
-
|
-
|
|||||||||||||
ROM
leach
|
57
|
0.29
|
-
|
-
|
-
|
-
|
43.2
|
-
|
-
|
-
|
-
|
|||||||||||||
Candelaria
|
Mill
|
360
|
0.59
|
0.133
|
-
|
2.17
|
-
|
91.1
|
79.8
|
-
|
77.1
|
-
|
||||||||||||
Ojos
del Salado
|
Mill
|
7
|
1.14
|
0.286
|
-
|
2.61
|
-
|
90.0
|
68.3
|
-
|
60.1
|
-
|
||||||||||||
El
Abra
|
Crushed
leach
|
656
|
0.53
|
-
|
-
|
-
|
-
|
60.5
|
-
|
-
|
-
|
-
|
||||||||||||
ROM
leach
|
545
|
0.30
|
-
|
-
|
-
|
-
|
31.1
|
-
|
-
|
-
|
-
|
|||||||||||||
3,333
|
||||||||||||||||||||||||
Indonesia
|
||||||||||||||||||||||||
Grasberg
open pit
|
Mill
|
433
|
0.89
|
0.983
|
-
|
2.25
|
-
|
83.9
|
82.5
|
-
|
43.3
|
-
|
||||||||||||
DOZ/ESZ
|
Mill
|
284
|
0.65
|
0.707
|
-
|
3.05
|
-
|
83.8
|
75.6
|
-
|
55.0
|
-
|
||||||||||||
Grasberg
block cave
|
Mill
|
983
|
1.06
|
0.852
|
-
|
3.33
|
-
|
85.1
|
68.0
|
-
|
59.6
|
-
|
||||||||||||
Kucing
Liar
|
Mill
|
568
|
1.18
|
1.054
|
-
|
5.84
|
-
|
85.8
|
47.2
|
-
|
38.9
|
-
|
||||||||||||
MLZ/DMLZ
|
Mill
|
392
|
1.01
|
0.813
|
-
|
4.95
|
-
|
84.6
|
75.6
|
-
|
62.5
|
-
|
||||||||||||
Big
Gossan
|
Mill
|
53
|
2.31
|
1.100
|
-
|
14.75
|
-
|
90.9
|
67.2
|
-
|
63.3
|
-
|
||||||||||||
2,713
|
||||||||||||||||||||||||
Africa
|
||||||||||||||||||||||||
Tenke
Fungurume
|
Agitation
leach
|
100
|
2.26
|
-
|
-
|
-
|
-
|
0.332
|
87.2
|
-
|
-
|
-
|
-
|
80.0
|
||||||||||
Total
|
12,224
|
0.51
|
0.204
|
0.010
|
1.362
|
0.003
|
69.8
|
66.3
|
64.6
|
56.1
|
80.0
|
|||||||||||||
Recoverable Proven and
Probable Reserves
|
||||||||||||||
Estimated at December
31, 2007
|
||||||||||||||
Recoverable
Reserves
|
||||||||||||||
FCX’s
Interest
|
Processing
Method
|
Copper
billion
lbs.
|
Gold
million
ozs.
|
Moly
billion
lbs.
|
Silver
million
ozs.
|
Cobalt
billion
lbs.
|
||||||||
North
America
|
||||||||||||||
Morenci
|
85%
|
Mill
|
2.1
|
-
|
0.1
|
-
|
-
|
|||||||
Crushed
leach
|
4.4
|
-
|
-
|
-
|
-
|
|||||||||
ROM
leach
|
3.7
|
-
|
-
|
-
|
-
|
|||||||||
Bagdad
|
100%
|
Mill
|
3.8
|
0.1
|
0.2
|
15.2
|
-
|
|||||||
ROM
leach
|
0.2
|
-
|
-
|
-
|
-
|
|||||||||
Chino
|
100%
|
Mill
|
0.6
|
-
|
-
|
0.7
|
-
|
|||||||
ROM
leach
|
0.7
|
-
|
-
|
-
|
-
|
|||||||||
Cobre
|
100%
|
ROM
leach
|
0.5
|
-
|
-
|
-
|
-
|
|||||||
Miami
|
100%
|
ROM
leach
|
0.5
|
-
|
-
|
-
|
-
|
|||||||
Safford
|
100%
|
Crushed
leach
|
2.6
|
-
|
-
|
-
|
-
|
|||||||
ROM
leach
|
0.1
|
-
|
-
|
-
|
-
|
|||||||||
Sierrita
|
100%
|
Mill
|
5.1
|
0.1
|
0.6
|
24.4
|
-
|
|||||||
ROM
leach
|
-
|
-
|
-
|
-
|
-
|
|||||||||
Tyrone
|
100%
|
ROM
leach
|
0.9
|
-
|
-
|
-
|
-
|
|||||||
Henderson
|
100%
|
Mill
|
-
|
-
|
0.4
|
-
|
-
|
|||||||
Climax
|
100%
|
Mill
|
-
|
-
|
0.5
|
-
|
-
|
|||||||
25.2
|
0.2
|
1.8
|
40.3
|
-
|
||||||||||
Recoverable
metal in stockpiles
|
2.2
|
-
|
-
|
-
|
-
|
|||||||||
100%
operations
|
27.4
|
0.2
|
1.8
|
40.3
|
-
|
|||||||||
Consolidated
basis
a
|
25.8
|
0.2
|
1.8
|
40.3
|
-
|
|||||||||
Net
equity interest
b
|
25.8
|
0.2
|
1.8
|
40.3
|
-
|
|||||||||
South
America
|
||||||||||||||
Cerro
Verde
|
53.56%
|
Mill
|
12.1
|
-
|
0.2
|
38.3
|
-
|
|||||||
Crushed
leach
|
2.1
|
-
|
-
|
-
|
-
|
|||||||||
ROM
leach
|
0.1
|
-
|
-
|
-
|
-
|
|||||||||
Candelaria
|
80%
|
Mill
|
4.3
|
1.2
|
-
|
19.4
|
-
|
|||||||
Ojos
del Salado
|
80%
|
Mill
|
0.2
|
-
|
-
|
0.4
|
-
|
|||||||
El
Abra
|
51%
|
Crushed
leach
|
4.7
|
-
|
-
|
-
|
-
|
|||||||
ROM
leach
|
1.1
|
-
|
-
|
-
|
-
|
|||||||||
24.6
|
1.2
|
0.2
|
58.1
|
-
|
||||||||||
Recoverable
metal in stockpiles
|
1.4
|
0.2
|
-
|
3.6
|
-
|
|||||||||
100%
operations
|
26.0
|
1.4
|
0.2
|
61.7
|
-
|
|||||||||
Consolidated
basis
a
|
26.0
|
1.4
|
0.2
|
61.7
|
-
|
|||||||||
Net
equity interest
b
|
15.0
|
1.1
|
0.1
|
38.9
|
-
|
|||||||||
Indonesia
|
||||||||||||||
Grasberg
open pit
|
(c)
|
Mill
|
7.2
|
11.2
|
-
|
13.6
|
-
|
|||||||
DOZ/ESZ
|
(c)
|
Mill
|
3.4
|
4.9
|
-
|
15.3
|
-
|
|||||||
Grasberg
block cave
|
(c)
|
Mill
|
19.6
|
18.3
|
-
|
62.7
|
-
|
|||||||
Kucing
Liar
|
(c)
|
Mill
|
12.7
|
9.1
|
-
|
41.5
|
-
|
|||||||
MLZ/DMLZ
|
(c)
|
Mill
|
7.4
|
7.7
|
-
|
39.1
|
-
|
|||||||
Big
Gossan
|
(c)
|
Mill
|
2.4
|
1.3
|
-
|
15.8
|
-
|
|||||||
52.7
|
52.5
|
-
|
188.0
|
-
|
||||||||||
Recoverable
metal in stockpiles
|
-
|
-
|
-
|
-
|
-
|
|||||||||
100%
operations
|
52.7
|
52.5
|
-
|
188.0
|
-
|
|||||||||
Consolidated
basis
a
|
37.1
|
39.4
|
-
|
128.9
|
-
|
|||||||||
Net
equity interest
b
|
33.7
|
35.7
|
-
|
116.9
|
-
|
|||||||||
Africa
|
||||||||||||||
Tenke
Fungurume
|
57.75%
|
Agitation
leach
|
4.3
|
-
|
-
|
-
|
0.6
|
|||||||
100%
operations
|
4.3
|
-
|
-
|
-
|
0.6
|
|||||||||
Consolidated
basis
a
|
4.3
|
-
|
-
|
-
|
0.6
|
|||||||||
Net
interest
b
|
2.5
|
-
|
-
|
-
|
0.3
|
|||||||||
TOTAL
– 100% operations
|
110.4
|
54.1
|
2.0
|
290.0
|
0.6
|
|||||||||
TOTAL
– Consolidated basis
a
|
93.2
|
41.0
|
2.0
|
230.9
|
0.6
|
|||||||||
TOTAL
– Net equity interest
b
|
77.0
|
37.0
|
1.9
|
196.1
|
0.3
|
|||||||||
a. Consolidated
basis represents estimated metal quantities after reduction for joint
venture partner interests at the Morenci mine in North
America
|
||||||||||||||
and
at the Grasberg mining complex in Indonesia.
|
||||||||||||||
b. Net equity
interest represents our net ownership interest (
i.e.,
estimated
consolidated reserves further reduced for minority
interests).
|
||||||||||||||
c. Our
joint venture agreement with Rio Tinto gives us, through 2021, a 60%
interest on a consolidated basis, in certain assets and future
production
|
||||||||||||||
exceeding
specified annual amounts of copper, gold and silver in Block A, and 100%
of the remaining assets and production. After 2021, we
have
|
||||||||||||||
a
60% interest in all production from Block A on a consolidated
basis.
|
Copper Equivalent Cutoff Grade |
Moly
Cutoff Grade
|
|||||||||
Crushed
or
|
ROM
|
|||||||||
Mill
|
Agitation
Leach
|
Leach
|
Mill
|
|||||||
North
America
|
||||||||||
Morenci
|
0.25
|
%
|
0.25
|
%
|
0.10
|
%
|
N/A
|
|||
Bagdad
|
0.19
|
N/A
|
0.05
|
N/A
|
||||||
Chino
|
0.25
|
N/A
|
0.11
|
N/A
|
||||||
Cobre
|
N/A
|
N/A
|
0.17
|
N/A
|
||||||
Miami
|
N/A
|
N/A
|
0.04
|
N/A
|
||||||
Safford
|
N/A
|
0.12
|
0.08
|
N/A
|
||||||
Sierrita
|
0.24
|
N/A
|
0.04
|
N/A
|
||||||
Tyrone
|
N/A
|
N/A
|
0.05
|
N/A
|
||||||
Henderson
|
N/A
|
N/A
|
N/A
|
0.14
|
%
|
|||||
Climax
|
N/A
|
N/A
|
N/A
|
0.06
|
||||||
South
America
|
||||||||||
Cerro
Verde
|
0.21
|
0.16
|
0.13
|
N/A
|
||||||
Candelaria
|
0.23
|
N/A
|
N/A
|
N/A
|
||||||
Ojos
del Salado
|
0.88
|
N/A
|
N/A
|
N/A
|
||||||
El
Abra
|
N/A
|
0.19
|
0.02
|
N/A
|
||||||
Indonesia
|
||||||||||
Grasberg
open pit
|
0.71
|
N/A
|
N/A
|
N/A
|
||||||
DOZ/ESZ
|
0.72
|
N/A
|
N/A
|
N/A
|
||||||
Grasberg
block cave
|
0.66
|
N/A
|
N/A
|
N/A
|
||||||
Kucing
Liar
|
0.83
|
N/A
|
N/A
|
N/A
|
||||||
MLZ/DMLZ
|
0.78
|
N/A
|
N/A
|
N/A
|
||||||
Big
Gossan
|
1.42
|
N/A
|
N/A
|
N/A
|
||||||
Africa
|
||||||||||
Tenke
Fungurume
|
N/A
|
1.30
|
N/A
|
N/A
|
Average
Spacing in Meters
|
|||||||||||
Proven
|
Probable
|
||||||||||
Mining
Unit
|
Mill
|
Leach
|
Mill
|
Leach
|
|||||||
North
America
|
|||||||||||
Morenci
|
Open
Pit
|
86
|
86
|
122
|
122
|
||||||
Bagdad
|
Open
Pit
|
58
|
25
|
134
|
98
|
||||||
Chino
|
Open
Pit
|
43
|
86
|
86
|
122
|
||||||
Cobre
|
Open
Pit
|
46
|
61
|
61
|
91
|
||||||
Miami
|
Open
Pit
|
N/A
|
61
|
N/A
|
91
|
||||||
Safford
|
Open
Pit
|
N/A
|
61
|
N/A
|
122
|
||||||
Sierrita
|
Open
Pit
|
68
|
41
|
106
|
76
|
||||||
Tyrone
|
Open
Pit
|
N/A
|
86
|
N/A
|
86
|
||||||
Henderson
|
Block
Cave
|
38
|
N/A
|
85
|
N/A
|
||||||
Climax
|
Open
Pit
|
61
|
N/A
|
61
|
N/A
|
||||||
South
America
|
|||||||||||
Cerro
Verde
|
Open
Pit
|
50
|
50
|
100
|
100
|
||||||
Candelaria
|
Open
Pit
|
35
|
N/A
|
70
|
N/A
|
||||||
Ojos
del Salado
|
Block
Cave
|
25
|
N/A
|
50
|
N/A
|
||||||
El
Abra
|
Open
Pit
|
N/A
|
75
|
N/A
|
120
|
||||||
Indonesia
|
|||||||||||
Grasberg
|
Open
Pit
|
36
|
N/A
|
92
|
N/A
|
||||||
DOZ/ESZ
|
Block
Cave
|
20
|
N/A
|
50
|
N/A
|
||||||
Grasberg
|
Block
Cave
|
33
|
N/A
|
98
|
N/A
|
||||||
Kucing
Liar
|
Block
Cave
|
34
|
N/A
|
92
|
N/A
|
||||||
Mill
Level Zone
|
Block
Cave
|
19
|
N/A
|
60
|
N/A
|
||||||
Deep
Mill Level Zone
|
Block
Cave
|
21
|
N/A
|
94
|
N/A
|
||||||
Big
Gossan
|
Open
Stope
|
13
|
N/A
|
42
|
N/A
|
||||||
Africa
|
|||||||||||
Tenke
Fungurume
|
Open
Pit
|
N/A
|
50
|
N/A
|
100
|
Mineralized
Material
100%
Basis
Estimated
at December 31, 2007
|
|||||||||||||||||||||||
Milling
Material
|
Leaching
Material
|
Total
Mineralized Material
|
|||||||||||||||||||||
FCX’s
Interest
|
Million
metric tons
|
Copper
%
|
Gold
g/t
|
Moly
%
|
Million
metric
tons
|
Copper
%
|
Million
metric tons
|
Copper
%
|
Gold
g/t
|
Moly
%
|
|||||||||||||
North
America
|
|||||||||||||||||||||||
Sierrita
|
100%
|
2,245
|
0.21
|
-
|
0.02
|
25
|
0.17
|
2,270
|
0.21
|
-
|
0.02
|
||||||||||||
Morenci
|
85%
|
336
|
0.36
|
-
|
0.02
|
1,172
|
0.24
|
1,508
|
0.27
|
-
|
0.004
|
||||||||||||
Lone
Star
|
100%
|
-
|
-
|
-
|
1,451
|
0.38
|
1,451
|
0.38
|
-
|
-
|
|||||||||||||
Bagdad
|
100%
|
834
|
0.32
|
-
|
0.02
|
-
|
-
|
834
|
0.32
|
-
|
0.02
|
||||||||||||
Chino
|
100%
|
232
|
0.58
|
-
|
0.01
|
402
|
0.30
|
634
|
0.40
|
-
|
0.004
|
||||||||||||
Ajo
|
100%
|
352
|
0.41
|
-
|
0.01
|
-
|
-
|
352
|
0.41
|
-
|
0.01
|
||||||||||||
Safford
|
100%
|
211
|
0.73
|
-
|
-
|
88
|
0.36
|
299
|
0.62
|
-
|
-
|
||||||||||||
Tyrone
|
100%
|
-
|
-
|
-
|
-
|
287
|
0.30
|
287
|
0.30
|
-
|
-
|
||||||||||||
Tohono
|
100%
|
135
|
0.70
|
-
|
-
|
146
|
0.84
|
281
|
0.77
|
-
|
-
|
||||||||||||
Cochise/Bisbee
|
100%
|
-
|
-
|
-
|
-
|
272
|
0.45
|
272
|
0.45
|
-
|
-
|
||||||||||||
Sanchez
|
100%
|
-
|
-
|
-
|
-
|
209
|
0.29
|
209
|
0.29
|
-
|
-
|
||||||||||||
Miami
|
100%
|
-
|
-
|
-
|
-
|
21
|
0.26
|
21
|
0.26
|
-
|
-
|
||||||||||||
Cobre
|
100%
|
3
|
0.94
|
-
|
-
|
-
|
-
|
3
|
0.94
|
-
|
-
|
||||||||||||
Climax
|
100%
|
397
|
-
|
-
|
0.17
|
-
|
-
|
397
|
-
|
-
|
0.17
|
||||||||||||
Henderson
|
100%
|
286
|
-
|
-
|
0.12
|
-
|
-
|
286
|
-
|
-
|
0.12
|
||||||||||||
South
America
|
|||||||||||||||||||||||
El
Abra
|
51%
|
330
|
0.40
|
-
|
-
|
497
|
0.43
|
827
|
0.42
|
-
|
-
|
||||||||||||
Cerro
Verde
|
53.56%
|
392
|
0.35
|
-
|
0.01
|
30
|
0.31
|
422
|
0.35
|
-
|
0.01
|
||||||||||||
Candelaria
a
|
80%
|
136
|
0.44
|
0.12
|
-
|
-
|
-
|
136
|
0.44
|
0.12
|
-
|
||||||||||||
Indonesia
|
|||||||||||||||||||||||
Grasberg
district
b
|
54.38%
f
|
2,804
|
0.57
|
0.50
|
-
|
-
|
-
|
2,804
|
0.57
|
0.50
|
-
|
||||||||||||
Africa
|
|||||||||||||||||||||||
Tenke
Fungurume
c
|
57.75%
|
83
|
2.98
|
-
|
-
|
44
|
2.49
|
127
|
2.81
|
-
|
-
|
||||||||||||
Total
100% basis
|
8,776
|
0.41
|
0.16
|
0.02
|
4,644
|
0.37
|
13,420
|
0.39
|
0.11
|
0.01
|
|||||||||||||
Consolidated basis
d
|
7,605
|
0.38
|
0.11
|
0.02
|
4,468
|
0.38
|
12,073
|
0.38
|
0.07
|
0.01
|
|||||||||||||
Net equity interest
e
|
7,041
|
0.37
|
0.11
|
0.03
|
4,192
|
0.36
|
11,233
|
0.36
|
0.07
|
0.02
|
|||||||||||||
a.
|
Candelaria
stated tonnage also includes 1.7 grams of silver per metric
ton.
|
b.
|
Grasberg
stated tonnage also includes 3.3 grams of silver per metric
ton.
|
c.
|
Tenke
Fungurume stated tonnage also includes 0.30 percent
cobalt.
|
d.
|
Consolidated
basis represents estimated mineralized material after reduction for joint
venture partner interests at the Morenci mine in North America and at the
Grasberg minerals district in
Indonesia.
|
e.
|
Net
equity interest represents our net ownership interest (
i.e.,
estimated
mineralized material further reduced for minority
interests).
|
f.
|
FCX’s
interest in the Grasberg minerals district reflects our 60 percent joint
venture ownership, further reduced by minority
interests.
|
2007
|
2006
|
2005
|
||||
PT
Smelting
|
39%
|
27%
|
29%
|
|||
Atlantic
Copper
|
25%
|
23%
|
25%
|
|||
Other
parties
|
36%
|
50%
|
46%
|
|||
100%
|
100%
|
100%
|
||||
Location
|
Number
of Unions
|
Number
of Union-Represented Employees
|
Expiration
Date
|
PT
Freeport Indonesia – Indonesia
|
1
|
4,260
|
October
2009
|
Tenke
Fungurume – DRC
|
2
|
1,080
|
March
2008
|
Cerro
Verde – Peru
|
1
|
684
|
December
2008
|
Candelaria
– Chile
|
2
|
484
|
October
2009
|
El
Abra – Chile
|
2
|
471
|
October
2008
|
Chino
– New Mexico
|
1
|
293
|
November
2009
|
Atlantic
Copper – Spain
|
2
|
172
|
December
2007
a
|
Stowmarket
– United Kingdom
|
1
|
53
|
May
2008
|
Bayway
– New Jersey
|
1
|
52
|
April
2010
|
Rotterdam
– The Netherlands
|
2
|
50
|
March
2008
|
Aurex
– Chile
|
1
|
34
|
February
2010
|
Name
|
Age
|
Position
or Office
|
||
James
R. Moffett
|
69
|
Chairman
of the Board of FCX. President Commissioner
|
||
of
PT Freeport Indonesia.
|
||||
Richard
C. Adkerson
|
61
|
Director,
President and Chief Executive Officer of FCX.
|
||
Director
and Executive Vice President of PT Freeport Indonesia. Chairman of the
Board of Directors of Atlantic Copper.
|
||||
Michael
J. Arnold
|
55
|
Executive
Vice President and Chief Administrative
|
||
Officer
of FCX.
|
||||
Kathleen
L. Quirk
|
44
|
Executive
Vice President, Chief Financial Officer and
|
||
Treasurer
of FCX. Commissioner of PT Freeport Indonesia. Director of Atlantic
Copper.
|
2007
|
2006
|
|||||||||||
High
|
Low
|
High
|
Low
|
|||||||||
First
Quarter
|
$
|
67.19
|
$
|
48.85
|
$
|
65.00
|
$
|
47.11
|
||||
Second
Quarter
|
85.50
|
65.62
|
72.20
|
43.10
|
||||||||
Third
Quarter
|
110.60
|
67.07
|
62.29
|
47.58
|
||||||||
Fourth
Quarter
|
120.20
|
85.71
|
63.70
|
47.60
|
2007
|
||||||
Per
Share
Amount
|
Record
Date
|
Payment
Date
|
||||
First
Quarter
|
$
|
0.3125
|
Jan.
16, 2007
|
Feb.
1, 2007
|
||
Second
Quarter
|
0.3125
|
Apr.
16, 2007
|
May
1, 2007
|
|||
Third
Quarter
|
0.3125
|
July
16, 2007
|
Aug.
1, 2007
|
|||
Fourth
Quarter
|
0.3125
|
Oct.
15, 2007
|
Nov.
1, 2007
|
2006
|
||||||
Per
Share
Amount
|
Record
Date
|
Payment
Date
|
||||
First
Quarter
|
$
|
0.3125
|
Jan.
17, 2006
|
Feb.
1, 2006
|
||
Supplemental
dividend
|
0.50
|
Mar.
15, 2006
|
Mar.
31, 2006
|
|||
Second
Quarter
|
0.3125
|
Apr.
17, 2006
|
May
1, 2006
|
|||
Supplemental
dividend
|
0.75
|
June
15, 2006
|
June
30, 2006
|
|||
Third
Quarter
|
0.3125
|
July
17, 2006
|
Aug.
1, 2006
|
|||
Supplemental
dividend
|
0.75
|
Sept.
14, 2006
|
Sept.
29, 2006
|
|||
Fourth
Quarter
|
0.3125
|
Oct.
16, 2006
|
Nov.
1, 2006
|
|||
Supplemental
dividend
|
1.50
|
Dec.
14, 2006
|
Dec.
29, 2006
|
(d)
Maximum Number
|
|||||||||
(c)
Total Number of
|
(or
Approximate
|
||||||||
(a)
Total
|
Shares
(or Units)
|
Dollar
Value) of Shares
|
|||||||
Number
of
|
(b)
Average
|
Purchased
as Part of
|
(or
Units) That May
|
||||||
Shares
(or Units)
|
Price
Paid Per
|
Publicly
Announced
|
Yet
Be Purchased Under
|
||||||
Period
|
Purchased
a
|
Share
(or Unit)
|
Plans
or Programs
|
the
Plans or Programs
|
|||||
October
1-31, 2007
|
1,744
|
$
|
115.76
|
-
|
-
|
||||
November
1-30, 2007
|
2,135
|
$
|
110.62
|
-
|
-
|
||||
December
1-31, 2007
|
94
|
$
|
102.56
|
-
|
-
|
||||
Total
|
3,973
|
$
|
112.69
|
-
|
20,000,000
|
||||
a.
|
This
category includes shares repurchased under FCX’s applicable stock
incentive plans (Plans) and its non-qualified supplemental savings plan
(SSP). Through the Plans, FCX repurchases shares to satisfy tax
obligations on restricted stock awards and to cover the cost of option
exercises, and in the SSP repurchases shares as a result of FCX dividends
paid.
|
Years
Ended December 31,
|
|||||||||||||||
2007
a
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
FCX
CONSOLIDATED FINANCIAL DATA
|
(In
Millions, Except Per Share Amounts)
|
||||||||||||||
Revenues
|
$
|
16,939
|
b
|
$
|
5,791
|
$
|
4,179
|
$
|
2,372
|
$
|
2,212
|
||||
Operating
income
|
6,555
|
b,c
|
2,869
|
2,177
|
704
|
d
|
823
|
||||||||
Income
from continuing operations (applicable to common
|
|||||||||||||||
stock)
before cumulative effect of accounting changes
|
2,734
|
1,396
|
935
|
157
|
170
|
||||||||||
Income
from discontinued operations, net of taxes
|
35
|
–
|
–
|
–
|
–
|
||||||||||
Cumulative
effect of accounting changes, net
|
–
|
–
|
–
|
–
|
(16
|
)
h
|
|||||||||
Net
income applicable to common stock
|
2,769
|
b,c,e,f
|
1,396
|
e,f,g
|
935
|
e,f
|
157
|
d,e,f
|
154
|
e
|
|||||
Basic
net income per share of common stock:
|
|||||||||||||||
Continuing
operations
|
$
|
8.02
|
$
|
7.32
|
$
|
5.18
|
$
|
0.86
|
$
|
0.99
|
|||||
Discontinued
operations
|
0.10
|
–
|
–
|
–
|
–
|
||||||||||
Basic
net income per share of common stock
|
$
|
8.12
|
$
|
7.32
|
$
|
5.18
|
$
|
0.86
|
$
|
0.99
|
|||||
Diluted
net income per share of common stock:
|
|||||||||||||||
Continuing
operations
|
$
|
7.41
|
$
|
6.63
|
$
|
4.67
|
$
|
0.85
|
$
|
0.97
|
|||||
Discontinued
operations
|
0.09
|
–
|
–
|
–
|
–
|
||||||||||
Diluted
net income per share of common stock
|
$
|
7.50
|
b,c,e,f
|
$
|
6.63
|
e,f,g
|
$
|
4.67
|
e,f
|
$
|
0.85
|
d,e,f
|
$
|
0.97
|
e,h
|
Basic
average shares outstanding
|
341
|
191
|
180
|
182
|
156
|
||||||||||
Diluted
average shares outstanding
|
397
|
221
|
220
|
185
|
159
|
||||||||||
Dividends
declared per common share
|
$
|
1.375
|
$
|
5.0625
|
$
|
2.50
|
$
|
1.10
|
$
|
0.27
|
|||||
At
December 31:
|
|||||||||||||||
Cash
and cash equivalents
|
$
|
1,626
|
$
|
907
|
$
|
764
|
$
|
552
|
$
|
499
|
|||||
Property,
plant, equipment and development costs, net
|
25,715
|
3,099
|
3,089
|
3,199
|
3,262
|
||||||||||
Goodwill
|
6,105
|
–
|
–
|
–
|
–
|
||||||||||
Total
assets
|
40,661
|
5,390
|
g
|
5,550
|
5,087
|
4,718
|
|||||||||
Long-term
debt, including current portion and short-term
|
|||||||||||||||
borrowings
|
7,211
|
680
|
1,256
|
1,952
|
2,228
|
||||||||||
Total
stockholders’ equity
|
18,234
|
2,445
|
g
|
1,843
|
1,164
|
776
|
a.
|
Includes
the results of Phelps Dodge Corporation (Phelps Dodge) beginning March 20,
2007.
|
b.
|
Includes
charges to revenues for mark-to-market accounting adjustments on the 2007
copper price protection program assumed in the acquisition of Phelps Dodge
totaling $175 million ($106 million to net income or $0.27 per
share).
|
c.
|
Includes
purchase accounting impacts of $1.3 billion ($793 million to net income or
$2.00 per share) related to the acquisition of Phelps
Dodge.
|
d.
|
Includes
a $95 million ($49 million to net income or $0.26 per share) gain on
insurance settlement related to the fourth-quarter 2003 slippage and
debris flow events at the Grasberg open pit and a $12 million ($12 million
to net income or $0.06 per share) charge related to Atlantic Copper’s
workforce reduction plan.
|
e.
|
Includes
net losses on early extinguishment of debt totaling $132 million ($0.33
per share) in 2007, $30 million ($0.14 per share) in 2006, $40 million
($0.18 per share) in 2005, $7 million ($0.04 per share) in 2004 and $32
million ($0.20 per share) in 2003.
|
f.
|
Includes
gains of $52 million ($0.13 per share) in 2007 related to sales of
marketable securities, $30 million ($0.13 per share) in 2006 related to
the disposition of land and certain royalty rights at Atlantic Copper, $5
million ($0.02 per share) in 2005 and $20 million ($0.11 per share) in
2004 from the sale of land in Arizona held by an FCX joint venture, and an
additional $7 million ($0.04 per share) in 2004 from Atlantic Copper’s
sale of its wire rod and wire
assets.
|
g.
|
Effective
January 1, 2006, we adopted Emerging Issues Task Force Issue No. 04-6,
“Accounting for Stripping Costs Incurred during Production in the Mining
Industry” (EITF 04-6), and recorded our deferred mining costs asset ($285
million) as of December 31, 2005, net of taxes, minority interest share
and inventory effects ($136 million), as a cumulative effect adjustment to
reduce beginning retained earnings. As a result of adopting EITF 04-6,
income from continuing operations before income taxes and minority
interests was $35 million lower and net income was $19 million ($0.08 per
share) lower than if we had not adopted EITF 04-6. Effective January 1,
2006, we also adopted Statement of Financial Accounting Standards (SFAS)
No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R). As a result
of adopting SFAS No. 123R, income from continuing operations before income
taxes and minority interests was $28 million lower and net income was $16
million ($0.07 per share) lower than if we had not adopted SFAS No. 123R.
Results for prior years have not been
restated.
|
h.
|
Effective
January 1, 2003, we adopted SFAS No. 143, “Accounting for Asset Retirement
Obligations,” and recorded a $9 million ($0.06 per share) cumulative
effect gain. Effective July 1, 2003, we adopted SFAS No. 150, “Accounting
for Certain Financial Instruments with Characteristics of both Liabilities
and Equity,” and recorded a $25 million ($0.16 per share) cumulative
effect charge.
|
Years
Ended December 31,
|
|||||||||||||||
2007
a
|
2006
a
|
2005
a
|
2004
a
|
2003
a
|
|||||||||||
FCX
PRO FORMA CONSOLIDATED OPERATING DATA, Net of Joint Venture
Interests
|
|||||||||||||||
Copper
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
3,884
|
3,639
|
3,912
|
3,518
|
3,749
|
||||||||||
Production
(thousands of metric tons)
|
1,762
|
1,651
|
1,774
|
1,596
|
1,701
|
||||||||||
Sales
(millions of pounds)
|
3,862
|
3,630
|
3,933
|
3,530
|
3,775
|
||||||||||
Sales
(thousands of metric tons)
|
1,752
|
1,647
|
1,784
|
1,601
|
1,712
|
||||||||||
Average
realized price per pound, excluding hedging
|
$
|
3.28
|
$
|
3.06
|
$
|
1.76
|
$
|
1.33
|
$
|
0.82
|
|||||
Average
realized price per pound, including hedging
|
$
|
3.23
|
b
|
$
|
2.79
|
b
|
$
|
1.67
|
b
|
$
|
1.33
|
$
|
0.82
|
||
Gold
(recoverable)
|
|||||||||||||||
Production
(thousands of ounces)
|
2,329
|
1,863
|
2,923
|
1,591
|
2,592
|
||||||||||
Sales
(thousands of ounces)
|
2,320
|
1,866
|
2,925
|
1,577
|
2,604
|
||||||||||
Average
realized price per ounce
|
$
|
681.80
|
$
|
566.11
|
c
|
$
|
453.80
|
$
|
410.85
|
$
|
364.40
|
||||
Molybdenum
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
70
|
68
|
62
|
57
|
52
|
||||||||||
Sales
(millions of pounds)
|
69
|
69
|
60
|
63
|
54
|
||||||||||
Average
realized price per pound
|
$
|
25.87
|
$
|
21.87
|
$
|
25.89
|
$
|
12.71
|
$
|
5.78
|
|||||
CONSOLIDATED
NORTH AMERICAN MINING OPERATING DATA, Net of Joint Venture Interest (Pro
Forma)
|
|||||||||||||||
Copper
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
1,320
|
1,305
|
1,365
|
1,384
|
1,296
|
||||||||||
Production
(thousands of metric tons)
|
599
|
592
|
619
|
628
|
588
|
||||||||||
Sales
(millions of pounds)
|
1,332
|
1,303
|
1,383
|
1,393
|
1,316
|
||||||||||
Sales
(thousands of metric tons)
|
604
|
591
|
627
|
632
|
597
|
||||||||||
Average
realized price per pound, excluding hedging
|
$
|
3.26
|
$
|
3.03
|
$
|
1.67
|
$
|
1.29
|
$
|
0.82
|
|||||
Average
realized price per pound, including hedging
|
$
|
3.12
|
b
|
$
|
2.26
|
b
|
$
|
1.49
|
b
|
$
|
1.29
|
$
|
0.82
|
||
Molybdenum
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
69
|
68
|
62
|
57
|
52
|
||||||||||
Sales
(millions of pounds)
|
69
|
69
|
60
|
63
|
54
|
||||||||||
Average
realized price per pound
|
$
|
25.87
|
$
|
21.87
|
$
|
25.89
|
$
|
12.71
|
$
|
5.78
|
|||||
CONSOLIDATED
SOUTH AMERICAN MINING OPERATING DATA (Pro Forma)
|
|||||||||||||||
Copper
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
1,413
|
1,133
|
1,091
|
1,137
|
1,161
|
||||||||||
Production
(thousands of metric tons)
|
641
|
514
|
495
|
516
|
527
|
||||||||||
Sales
(millions of pounds)
|
1,399
|
1,126
|
1,093
|
1,145
|
1,163
|
||||||||||
Sales
(thousands of metric tons)
|
635
|
511
|
496
|
519
|
527
|
||||||||||
Average
realized price per pound, excluding hedging
|
$
|
3.25
|
$
|
3.03
|
$
|
1.75
|
$
|
1.33
|
$
|
0.83
|
|||||
Average
realized price per pound, including hedging
|
$
|
3.25
|
$
|
3.03
|
$
|
1.63
|
b
|
$
|
1.33
|
$
|
0.83
|
||||
Gold
(recoverable)
|
|||||||||||||||
Production
(thousands of ounces)
|
116
|
112
|
117
|
122
|
127
|
||||||||||
Sales
(thousands of ounces)
|
114
|
111
|
117
|
122
|
127
|
||||||||||
Average
realized price per ounce
|
$
|
700.81
|
$
|
551.70
|
$
|
425.32
|
$
|
409.14
|
$
|
349.12
|
|||||
Molybdenum
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
1
|
–
|
–
|
–
|
–
|
||||||||||
CONSOLIDATED
INDONESIAN MINING OPERATING DATA, Net of Rio Tinto’s Joint Venture
Interest
|
|||||||||||||||
Copper
(recoverable)
|
|||||||||||||||
Production
(millions of pounds)
|
1,151
|
1,201
|
1,456
|
997
|
1,292
|
||||||||||
Production
(thousands of metric tons)
|
522
|
545
|
660
|
452
|
586
|
||||||||||
Sales
(millions of pounds)
|
1,131
|
1,201
|
1,457
|
992
|
1,296
|
||||||||||
Sales
(thousands of metric tons)
|
513
|
545
|
661
|
450
|
588
|
||||||||||
Average
realized price per pound
|
$
|
3.32
|
$
|
3.13
|
$
|
1.85
|
$
|
1.37
|
$
|
0.82
|
|||||
Gold
(recoverable)
|
|||||||||||||||
Production
(thousands of ounces)
|
2,198
|
1,732
|
2,789
|
1,456
|
2,463
|
||||||||||
Sales
(thousands of ounces)
|
2,185
|
1,736
|
2,790
|
1,443
|
2,470
|
||||||||||
Average
realized price per ounce
|
$
|
680.74
|
$
|
566.51
|
c
|
$
|
456.27
|
$
|
412.32
|
$
|
366.60
|
||||
a.
|
Includes
Phelps Dodge’s pre-acquisition results for comparative purposes
only.
|
b.
|
Includes
the impact of hedging losses related to copper price protection
programs.
|
c.
|
Amount
was approximately $606 per ounce before a loss resulting from the
redemption of FCX’s Gold-Denominated Preferred Stock, Series
II.
|
a.
|
Includes
Phelps Dodge’s pre-acquisition results for comparative purposes
only.
|
Years
Ended December 31,
|
|||||
2007
|
2006
|
2005
|
2004
|
2003
|
|
Ratio
of earnings to fixed charges
|
9.9x
|
33.1x
|
15.9x
|
4.9x
|
4.0x
|
Ratio
of earnings to fixed charges
|
|||||
and
preferred stock dividends
|
6.6x
|
14.3x
|
8.2x
|
2.9x
|
3.0x
|
(Projected)
|
|||||||
2007
|
2008
|
||||||
Production
and delivery costs
|
$
|
737
|
$
|
60
|
|||
Depreciation,
depletion and amortization
|
595
|
940
|
|||||
Amortization
of intangibles and other
|
(76
|
)
|
75
|
||||
Reduction
of operating income
|
$
|
1,256
|
$
|
1,075
|
a
|
||
Reduction
of income from continuing operations
|
$
|
785
|
$
|
670
|
a.
|
The
estimated reduction in operating income for 2008 is expected to decline,
compared with 2007, primarily because of a decreased impact on production
and delivery costs from inventory valuations as the most significant
increases in inventory values were realized in 2007, partly offset by
increases in (i) depreciation, depletion and amortization reflecting a
full year impact for 2008 and higher values for acquired property, plant
and equipment resulting from revised valuations completed in
fourth-quarter 2007 and (ii) amortization of net intangibles assets in
2008, compared with the amortization of net intangible liabilities in
2007, which included the amortization of unfavorable sales contracts
(refer to Note 7).
|
Years
Ended December 31,
|
|||||||||||
2007
|
2006
|
2005
|
|||||||||
Balance
at beginning of year
|
$
|
30
|
$
|
27
|
$
|
23
|
|||||
Liabilities
assumed in the acquisition of Phelps Dodge
|
531
|
a
|
–
|
–
|
|||||||
Liabilities
incurred
|
1
|
–
|
2
|
||||||||
Revisions
to cash flow estimates
|
179
|
b
|
–
|
(1
|
)
|
||||||
Accretion
expense
|
27
|
3
|
3
|
||||||||
Spending
|
(40
|
)
|
–
|
–
|
|||||||
Balance
at end of year
|
$
|
728
|
$
|
30
|
$
|
27
|
|||||
a.
|
The
fair value of AROs assumed in the acquisition of Phelps Dodge was
estimated based on projected cash flows, an estimated long-term annual
inflation rate of 2.4 percent, a discount rate based on FCX’s estimated
credit-adjusted, risk-free interest rate of 7.8 percent and a market risk
premium of 10 percent to reflect what a third-party might require to
assume these AROs.
|
b.
|
The
most significant revisions to cash flow estimates in 2007 were related to
changes at Chino, Tyrone and PT Freeport Indonesia. During 2007, Chino and
Tyrone each submitted updated third-party closure cost estimates to the
state of New Mexico as part of the permit renewal process. As a result, we
revised our cash flow estimates and increased our ARO by $95 million for
Chino and $45 million for Tyrone. Additional adjustments may be required
based upon the state’s review of the updated closure plans and any permit
conditions imposed by the state of New Mexico. Additionally, PT Freeport
Indonesia updated its cost estimates primarily for changes to its plans
for the treatment of acidic water, resulting in an increase of $33
million.
|
Balance
at beginning of year
|
$
|
–
|
||||
Liabilities
assumed in the acquisition of Phelps Dodge
|
1,334
|
|
||||
Additions | 6 | |||||
Reductions
|
(1
|
)
|
||||
Spending
|
(71
|
)
|
||||
Balance
at end of year
|
$
|
1,268
|
||||
Projected
Consolidated Sales
|
||||||
Average
Annual
|
||||||
2008
|
2008
– 2010
|
|||||
Copper
(billions of recoverable pounds)
|
4.3
|
4.5
|
||||
Gold
(millions of recoverable ounces)
|
1.3
|
1.9
|
||||
Molybdenum
(millions of recoverable pounds)
|
75
|
85
|
Years
Ended December 31,
|
|||||||||
2007
a
|
2006
|
2005
|
|||||||
Revenues
|
$
|
16,939
|
b
|
$
|
5,791
|
c
|
$
|
4,179
|
|
Operating
income
|
6,555
|
b
|
2,869
|
c
|
2,177
|
||||
Income
from continuing operations applicable to common stock
d
|
2,734
|
b,e
|
1,396
|
c,f
|
935
|
g
|
|||
Net
income applicable to common stock
d
|
2,769
|
b,e
|
1,396
|
c,f
|
935
|
g
|
|||
Diluted
net income per share of common stock:
|
|||||||||
Continuing
operations
|
$
|
7.41
|
$
|
6.63
|
$
|
4.67
|
|||
Discontinued
operations
|
0.09
|
–
|
–
|
||||||
Diluted
net income per share of common stock
|
$
|
7.50
|
b,e,h
|
$
|
6.63
|
c,f
|
$
|
4.67
|
g
|
Sales
from Mines, excluding sales of purchased metal
|
|||||||||
Copper
|
|||||||||
Consolidated
share (millions of recoverable pounds)
|
3,357
|
1,201
|
1,457
|
||||||
Average
realized price per pound
|
$
|
3.28
|
b
|
$
|
3.13
|
$
|
1.85
|
||
Gold
|
|||||||||
Consolidated
share (thousands of recoverable ounces)
|
2,298
|
1,736
|
2,790
|
||||||
Average
realized price per ounce
|
$
|
682.20
|
$
|
566.51
|
c
|
$
|
456.27
|
||
Molybdenum
|
|||||||||
Consolidated
share (millions of recoverable pounds)
|
52
|
N/A
|
N/A
|
||||||
Average
realized price per pound
|
$
|
26.81
|
N/A
|
N/A
|
a.
|
Includes
the operations of Phelps Dodge beginning March 20, 2007. A summary of the
key components contributing to the consolidated results for the year ended
December 31, 2007, follows:
|
Income
from
|
|||||||||
Operating
|
Continuing
|
||||||||
Revenues
|
Income
|
Operations
|
|||||||
FCX,
excluding Phelps Dodge
|
$
|
6,034
|
$
|
3,055
|
$
|
824
|
|||
Phelps
Dodge results
|
10,785
|
4,756
|
2,903
|
||||||
Purchase
accounting impacts:
|
|||||||||
Inventories
(including mill and leach stockpiles)
|
–
|
(737
|
)
|
(464
|
)
|
||||
Property,
plant and equipment
|
–
|
(595
|
)
|
(375
|
)
|
||||
Intangible
assets/liabilities and other
|
120
|
76
|
54
|
||||||
Consolidated
|
$
|
16,939
|
$
|
6,555
|
$
|
2,942
|
b.
|
Includes
charges to revenues for mark-to-market accounting adjustments on the 2007
copper price protection program totaling $175 million ($106 million to net
income or $0.27 per share) and a reduction in average realized copper
prices of $0.05 per pound.
|
c.
|
Includes
losses on redemptions of our Gold-Denominated Preferred Stock, Series II,
and Silver-Denominated Preferred Stock totaling $82 million ($44 million
to net income or $0.20 per share). The loss on the redemption of our
Gold-Denominated Preferred Stock, Series II, also resulted in a reduction
in average realized gold prices of $39.85 per
ounce.
|
d.
|
After
dividends on preferred stock.
|
e.
|
Includes
net losses on early extinguishment of debt totaling $173 million ($132
million to net income or $0.33 per share) primarily related to premiums
paid and the accelerated recognition of deferred financing costs
associated with prepayments of
debt.
|
f.
|
Includes
losses on early extinguishment and conversion of debt totaling $32 million
($30 million to net income or $0.14 per share) primarily related to the
completion of a tender offer and privately negotiated transactions to
induce conversion of our 7% Convertible Senior Notes into FCX common stock
and open-market purchases of our 10⅛% Senior
Notes.
|
g.
|
Includes
losses on early extinguishment and conversion of debt totaling $52 million
($40 million to net income or $0.18 per share) primarily related to
open-market purchases of our 10⅛% Senior Notes and privately negotiated
transactions to induce conversion of our 7% Convertible Senior Notes into
FCX common stock.
|
h.
|
On
March 19, 2007, we issued 136.9 million common shares to acquire Phelps
Dodge. On March 28, 2007, we sold an additional 47.15 million common
shares. Common shares outstanding at December 31, 2007, totaled 382
million shares. Assuming conversion of all our convertible instruments,
total potential common shares outstanding would be 445 million shares at
December 31, 2007.
|
Effective
|
Provision
for
|
||||||||
Income
a
|
Tax
Rate
|
Income
Tax
|
|||||||
North
America
|
|||||||||
Income
before taxes and minority interests
|
$
|
1,875
|
30%
|
$
|
568
|
||||
Purchase
accounting adjustments
|
(895
|
)
|
39%
|
(353
|
)
|
||||
Subtotal
|
980
|
215
|
|||||||
South
America
|
|||||||||
Income
before taxes and minority interests
|
2,623
|
33%
|
868
|
||||||
Purchase
accounting adjustments
|
(369
|
)
|
34%
|
(126
|
)
|
||||
Subtotal
|
2,254
|
742
|
|||||||
Indonesia
|
|||||||||
Income
before taxes and minority interests
|
2,878
|
46%
|
1,326
|
||||||
Other
|
|||||||||
Income
before taxes and minority interests
|
21
|
29%
|
6
|
||||||
Adjustment
b
|
N/A
|
N/A
|
111
|
||||||
Consolidated
totals
|
$
|
6,133
|
39%
|
$
|
2,400
|
a.
|
Represents
income from continuing
operations.
|
b.
|
Represents
an adjustment for a one-time charge associated with the reversal of the
Phelps Dodge APB Opinion No. 23 indefinite reinvestment assertion on
certain earnings in South America. This adjustment was fully offset by a
reduction in minority interests’ share of net
income.
|
Years
Ended December 31,
|
||||||
2006
|
2005
|
|||||
Indonesian
mining operating income
a
|
$
|
2,809
|
$
|
2,321
|
||
Indonesian
mining interest expense, net
|
(20
|
)
|
(22
|
)
|
||
Intercompany
operating profit recognized (deferred)
|
32
|
(145
|
)
|
|||
Income
before taxes
|
2,821
|
2,154
|
||||
Indonesian
mining Contract of Work rate
|
35
|
%
|
35
|
%
|
||
Indonesian
mining income taxes
|
987
|
754
|
||||
Indonesian
mining net income
|
1,834
|
1,400
|
||||
Withholding
tax on FCX’s equity share
|
9.064
|
%
|
9.064
|
%
|
||
Withholding
taxes
|
166
|
127
|
||||
PT
Indocopper Investama corporate income taxes
|
48
|
37
|
||||
Other,
net
|
–
|
(3
|
)
|
|||
FCX
consolidated provision for income taxes
|
$
|
1,201
|
$
|
915
|
||
FCX
consolidated effective tax rate
|
43
|
%
|
45
|
%
|
||
a.
|
Excludes
charges for the in-the-money value of FCX stock option exercises, which
are eliminated in consolidation, totaling $88 million in 2006 and $64
million in 2005.
|
Years
Ended December 31,
|
||||||||||
2007
a
|
2006
|
2005
|
||||||||
North
American mining
b
:
|
||||||||||
Unaffiliated
customers
|
$
|
8,641
|
c
|
$
|
–
|
$
|
–
|
|||
Intersegment
|
9
|
–
|
–
|
|||||||
8,650
|
–
|
–
|
||||||||
South
American mining
d
:
|
||||||||||
Unaffiliated
customers
|
2,265
|
–
|
–
|
|||||||
Intersegment
|
1,580
|
–
|
–
|
|||||||
3,845
|
–
|
–
|
||||||||
Indonesian
mining:
|
||||||||||
Unaffiliated
customers
|
3,640
|
3,543
|
2,810
|
|||||||
Intersegment
|
1,168
|
852
|
758
|
|||||||
4,808
|
4,395
|
3,568
|
||||||||
Atlantic
Copper smelting & refining:
|
||||||||||
Unaffiliated
customers
|
2,388
|
2,242
|
1,363
|
|||||||
2,388
|
2,242
|
1,363
|
||||||||
Corporate,
other & eliminations:
|
||||||||||
Unaffiliated
customers
|
5
|
6
|
6
|
|||||||
Intersegment
|
(2,757
|
)
|
(852
|
)
|
(758
|
)
|
||||
(2,752
|
)
|
(846
|
)
|
(752
|
)
|
|||||
Consolidated
revenues
|
$
|
16,939
|
$
|
5,791
|
$
|
4,179
|
a.
|
Includes
the results of Phelps Dodge beginning March 20,
2007.
|
b.
|
Includes
our operating mines at Morenci, Bagdad, Sierrita, Safford, Chino and
Tyrone, and also includes our Rod and Refining and Molybdenum operations
(refer to Note 18).
|
c.
|
Includes
charges for mark-to-market accounting adjustments on the 2007 copper price
protection program totaling $175
million.
|
d.
|
Includes
our operating mines at Cerro Verde, Candelaria, Ojos del Salado and El
Abra (refer to Note 18).
|
Years
Ended December 31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
North
American mining
|
$
|
1,717
|
$
|
–
|
$
|
–
|
||||
South
American mining
|
2,190
|
–
|
–
|
|||||||
Indonesian
mining
|
3,033
|
2,721
|
2,257
|
|||||||
Atlantic
Copper smelting & refining
|
3
|
74
|
35
|
|||||||
Corporate,
other & eliminations
|
(388
|
)
|
74
|
(115
|
)
|
|||||
Consolidated
operating income
|
$
|
6,555
|
a
|
$
|
2,869
|
$
|
2,177
|
a.
|
Operating
income includes purchase accounting adjustments totaling $1.3 billion in
2007, which primarily relate to the impacts of increases in the carrying
values of acquired metal inventories (including mill and leach stockpiles)
and property, plant and
equipment.
|
Years
Ended December 31,
|
|||||||||||
North
American Mining Operating Results (Pro Forma)
|
2007
|
2006
|
2005
|
||||||||
Consolidated
Operating Data, Net of Joint Venture Interest
|
|||||||||||
Copper
(millions of recoverable pounds)
|
|||||||||||
Production
|
1,320
|
1,305
|
1,365
|
||||||||
Sales
a
|
1,332
|
1,303
|
1,383
|
||||||||
Average
realized price per pound, excluding hedging
|
$
|
3.26
|
$
|
3.03
|
$
|
1.67
|
|||||
Average
realized price per pound, including hedging
b
|
$
|
3.12
|
$
|
2.26
|
$
|
1.49
|
|||||
Molybdenum
(millions of recoverable pounds)
|
|||||||||||
Production
|
69
|
68
|
62
|
||||||||
Sales
|
69
|
69
|
60
|
||||||||
Average
realized price per pound
|
$
|
25.87
|
$
|
21.87
|
$
|
25.89
|
|||||
100%
Operating Data, Including Joint Venture Interest
|
|||||||||||
SX/EW
operations
|
|||||||||||
Leach
ore placed in stockpiles (metric tons per day)
|
798,200
|
801,200
|
778,500
|
||||||||
Average
copper ore grade (percent)
|
0.23
|
0.30
|
0.26
|
||||||||
Copper
production (millions of recoverable pounds)
|
940
|
1,013
|
1,066
|
||||||||
Mill
operations
|
|||||||||||
Ore
milled (metric tons per day)
|
223,800
|
199,300
|
194,800
|
||||||||
Average
ore grade (percent)
|
|||||||||||
Copper
|
0.35
|
0.33
|
0.33
|
||||||||
Molybdenum
|
0.02
|
0.02
|
0.03
|
||||||||
Production
(millions of recoverable pounds)
|
|||||||||||
Copper
|
501
|
414
|
419
|
||||||||
Molybdenum
(by-product)
|
30
|
31
|
30
|
||||||||
Molybdenum operations
(Henderson)
|
|||||||||||
Ore
milled (metric tons per day)
|
24,000
|
22,200
|
20,300
|
||||||||
Average
molybdenum ore grade (percent)
|
0.23
|
0.23
|
0.22
|
||||||||
Molybdenum
production (millions of recoverable pounds)
|
39
|
37
|
32
|
||||||||
a.
|
Excludes
sales of purchased copper.
|
b.
|
Includes
the impact of hedging losses related to copper price protection
programs.
|
Year Ended December
31, 2007
|
|||||||||
By-Product
|
Co-Product
Method
|
||||||||
Method
|
Copper
|
Molybdenum
|
a
|
||||||
Revenues,
after adjustments shown below
|
$
|
3.22
|
$
|
3.22
|
$
|
29.31
|
|||
Site
production and delivery, before net noncash and
|
|||||||||
nonrecurring
costs shown below
|
1.43
|
1.22
|
10.58
|
||||||
By-product
credits
a
|
(0.66
|
)
|
–
|
–
|
|||||
Treatment
charges
|
0.09
|
0.09
|
–
|
||||||
Unit
net cash costs
|
0.86
|
1.31
|
10.58
|
||||||
Depreciation,
depletion and amortization
|
0.15
|
0.12
|
0.87
|
||||||
Noncash
and nonrecurring costs, net
|
0.02
|
0.02
|
0.03
|
||||||
Total
unit costs
|
1.03
|
1.45
|
11.48
|
||||||
Revenue
adjustments, primarily for pricing on prior period
|
|||||||||
open
sales and hedging
|
(0.10
|
)
|
(0.10
|
)
|
–
|
||||
Idle
facility and other non-inventoriable costs
|
(0.05
|
)
|
(0.05
|
)
|
(0.02
|
)
|
|||
Gross
profit
|
$
|
2.04
|
$
|
1.62
|
$
|
17.81
|
|||
Consolidated
sales (millions of recoverable pounds)
|
|||||||||
Copper
|
1,316
|
1,316
|
|||||||
Molybdenum
|
30
|
Year Ended December
31, 2006
|
|||||||||
By-Product
|
Co-Product
Method
|
||||||||
Method
|
Copper
|
Molybdenum
|
a
|
||||||
Revenues,
after adjustments shown below
|
$
|
3.19
|
$
|
3.19
|
$
|
24.85
|
|||
Site
production and delivery, before net noncash and
|
|||||||||
nonrecurring
costs shown below
|
1.14
|
0.93
|
9.37
|
||||||
By-product
credits
a
|
(0.60
|
)
|
–
|
–
|
|||||
Treatment
charges
|
0.07
|
0.06
|
–
|
||||||
Unit
net cash costs
|
0.61
|
0.99
|
9.37
|
||||||
Depreciation,
depletion and amortization
|
0.11
|
0.09
|
0.77
|
||||||
Noncash
and nonrecurring costs, net
|
0.02
|
0.02
|
0.03
|
||||||
Total
unit costs
|
0.74
|
1.10
|
10.17
|
||||||
Revenue
adjustments, primarily for pricing on prior period
|
|||||||||
open
sales and hedging
|
(0.93
|
)
|
(0.93
|
)
|
–
|
||||
Idle
facility and other non-inventoriable costs
|
(0.03
|
)
|
(0.03
|
)
|
–
|
||||
Gross
profit
|
$
|
1.49
|
$
|
1.13
|
$
|
14.68
|
|||
Consolidated
sales (millions of recoverable pounds)
|
|||||||||
Copper
|
1,292
|
1,292
|
|||||||
Molybdenum
|
31
|
a.
|
Molybdenum
by-product credits reflect volumes produced at market-based pricing, and
also include tolling revenues at
Sierrita.
|
Year Ended December
31, 2005
|
|||||||||
By-Product
|
Co-Product
Method
|
||||||||
Method
|
Copper
|
Molybdenum
|
a
|
||||||
Revenues,
after adjustments shown below
|
$
|
1.63
|
$
|
1.63
|
$
|
32.47
|
|||
Site
production and delivery, before net noncash and
|
|||||||||
nonrecurring
costs shown below
|
0.97
|
0.77
|
9.72
|
||||||
By-product
credits
a
|
(0.70
|
)
|
–
|
–
|
|||||
Treatment
charges
|
0.07
|
0.07
|
–
|
||||||
Unit
net cash costs
|
0.34
|
0.84
|
9.72
|
||||||
Depreciation,
depletion and amortization
|
0.10
|
0.08
|
1.00
|
||||||
Noncash
and nonrecurring costs, net
|
0.01
|
0.01
|
0.03
|
||||||
Total
unit costs
|
0.45
|
0.93
|
10.75
|
||||||
Revenue
adjustments, primarily for pricing on prior period
|
|||||||||
open
sales and hedging
|
(0.14
|
)
|
(0.14
|
)
|
–
|
||||
Idle
facility and other non-inventoriable costs
|
(0.02
|
)
|
(0.02
|
)
|
–
|
||||
Gross
profit
|
$
|
1.02
|
$
|
0.54
|
$
|
21.72
|
|||
Consolidated
sales (millions of recoverable pounds)
|
|||||||||
Copper
|
1,378
|
1,378
|
|||||||
Molybdenum
|
30
|
a.
|
Molybdenum
by-product credits reflect volumes produced at market-based pricing and
also include tolling revenues at
Sierrita.
|
Years
Ended December 31,
|
|||||||||||
2007
|
2006
|
2005
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
26.10
|
$
|
22.14
|
$
|
27.63
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||
and
nonrecurring costs shown below
|
4.32
|
3.71
|
3.65
|
||||||||
Unit
net cash costs
|
4.32
|
3.71
|
3.65
|
||||||||
Depreciation
and amortization
|
1.00
|
0.89
|
0.88
|
||||||||
Noncash
and nonrecurring costs, net
|
0.02
|
0.02
|
0.01
|
||||||||
Total
unit costs
|
5.34
|
4.62
|
4.54
|
||||||||
Gross
profit
a
|
$
|
20.76
|
$
|
17.52
|
$
|
23.09
|
|||||
Consolidated
molybdenum sales (millions of recoverable pounds)
|
39
|
37
|
32
|
a.
|
Gross
profit reflects sales of Henderson products based on volumes produced at
market-based pricing. On a consolidated basis, the Molybdenum segment
includes profits on sales as they are made to third parties and
realizations based on actual contract
terms.
|
Years
Ended December 31,
|
|||||||||||
South
American Mining Operating Results (Pro Forma)
|
2007
|
2006
|
2005
|
||||||||
Copper
(millions of recoverable pounds)
|
|||||||||||
Production
|
1,413
|
1,133
|
1,091
|
||||||||
Sales
|
1,399
|
1,126
|
1,093
|
||||||||
Average
realized price per pound, excluding hedging
|
$
|
3.25
|
$
|
3.03
|
$
|
1.75
|
|||||
Average
realized price per pound, including hedging
a
|
$
|
3.25
|
$
|
3.03
|
$
|
1.63
|
|||||
Gold
(thousands of recoverable ounces)
|
|||||||||||
Production
|
116
|
112
|
117
|
||||||||
Sales
|
114
|
111
|
117
|
||||||||
Average
realized price per ounce
|
$
|
700.81
|
$
|
551.70
|
$
|
425.32
|
|||||
Molybdenum
(millions of recoverable pounds)
|
|||||||||||
Production
|
1
|
–
|
–
|
||||||||
SX/EW
operations
|
|||||||||||
Leach
ore placed in stockpiles (metric tons per day)
|
289,100
|
257,400
|
264,600
|
||||||||
Average
copper ore grade (percent)
|
0.43
|
0.45
|
0.46
|
||||||||
Copper
production (millions of recoverable pounds)
|
569
|
695
|
670
|
||||||||
Mill
operations
|
|||||||||||
Ore
milled (metric tons per day)
|
167,900
|
68,500
|
68,700
|
||||||||
Average
copper ore grade (percent)
|
0.74
|
0.87
|
0.84
|
||||||||
Production
(millions of recoverable pounds)
|
|||||||||||
Copper
|
844
|
438
|
421
|
||||||||
Molybdenum
|
1
|
–
|
–
|
a.
|
Includes
the impact of hedging losses related to El Abra’s 2005 copper price
protection program.
|
Year Ended December
31, 2007
|
||||||
By-Product
|
Co-Product
|
|||||
Method
|
Method
|
|||||
Revenues,
after adjustments shown below
|
$
|
3.25
|
$
|
3.25
|
||
Site
production and delivery, before net noncash and
|
||||||
nonrecurring
costs shown below
|
0.91
|
0.87
|
||||
By-product
credits
|
(0.09
|
)
|
–
|
|||
Treatment
charges
|
0.20
|
0.20
|
||||
Unit
net cash costs
|
1.02
|
1.07
|
||||
Depreciation,
depletion and amortization
|
0.14
|
0.14
|
||||
Noncash
and nonrecurring costs, net
|
–
|
–
|
||||
Total
unit costs
|
1.16
|
1.21
|
||||
Revenue
adjustments, primarily for pricing on prior period
|
||||||
open
sales and hedging
|
0.01
|
0.01
|
||||
Other
non-inventoriable costs
|
(0.02
|
)
|
(0.02
|
)
|
||
Gross
profit
|
$
|
2.08
|
$
|
2.03
|
||
Consolidated
sales
|
||||||
Copper
(millions of recoverable pounds)
|
1,399
|
1,399
|
Year Ended December
31, 2006
|
||||||
By-Product
|
Co-Product
|
|||||
Method
|
Method
|
|||||
Revenues,
after adjustments shown below
|
$
|
3.14
|
$
|
3.14
|
||
Site
production and delivery, before net noncash and
|
||||||
nonrecurring
costs shown below
|
0.82
|
0.79
|
||||
By-product
credits
|
(0.08
|
)
|
–
|
|||
Treatment
charges
|
0.17
|
0.17
|
||||
Unit
net cash costs
|
0.91
|
0.96
|
||||
Depreciation,
depletion and amortization
|
0.17
|
0.17
|
||||
Noncash
and nonrecurring costs, net
|
–
|
–
|
||||
Total
unit costs
|
1.08
|
1.13
|
||||
Revenue
adjustments, primarily for pricing on prior period
|
||||||
open
sales and hedging
|
(0.02
|
)
|
(0.01
|
)
|
||
Other
non-inventoriable costs
|
(0.02
|
)
|
(0.02
|
)
|
||
Gross
profit
|
$
|
2.02
|
$
|
1.98
|
||
Consolidated
sales
|
||||||
Copper
(millions of recoverable pounds)
|
1,126
|
1,126
|
Year Ended December
31, 2005
|
||||||
By-Product
|
Co-Product
|
|||||
Method
|
Method
|
|||||
Revenues,
after adjustments shown below
|
$
|
1.70
|
$
|
1.70
|
||
Site
production and delivery, before net noncash and
|
||||||
nonrecurring
costs shown below
|
0.68
|
0.65
|
||||
By-product
credits
|
(0.06
|
)
|
–
|
|||
Treatment
charges
|
0.10
|
0.09
|
||||
Unit
net cash costs
|
0.72
|
0.74
|
||||
Depreciation,
depletion and amortization
|
0.17
|
0.17
|
||||
Noncash
and nonrecurring costs, net
|
–
|
–
|
||||
Total
unit costs
|
0.89
|
0.91
|
||||
Revenue
adjustments, primarily for pricing on prior period
|
||||||
open
sales and hedging
|
(0.09
|
)
|
(0.09
|
)
|
||
Other
non-inventoriable costs
|
(0.01
|
)
|
(0.01
|
)
|
||
Gross
profit
|
$
|
0.71
|
$
|
0.69
|
||
Consolidated
sales
|
||||||
Copper
(millions of recoverable pounds)
|
1,093
|
1,093
|
a.
|
Amount
was approximately $606 per ounce before a loss resulting from redemption
of FCX’s Gold-Denominated Preferred Stock, Series
II.
|
2007
|
2006
|
2005
|
|||||||
PT
Freeport Indonesia revenues – prior year
|
$
|
4,395
|
$
|
3,568
|
$
|
1,747
|
|||
Price
realizations:
|
|||||||||
Copper
|
219
|
1,531
|
706
|
||||||
Gold
|
250
|
191
|
123
|
||||||
Sales
volumes:
|
|||||||||
Copper
|
(220
|
)
|
(473
|
)
|
636
|
||||
Gold
|
254
|
(481
|
)
|
555
|
|||||
Adjustments,
primarily for copper pricing on prior year open sales
|
(173
|
)
|
195
|
(1
|
)
|
||||
Treatment
charges, royalties and other
|
83
|
(136
|
)
|
(198
|
)
|
||||
PT
Freeport Indonesia revenues – current year
|
$
|
4,808
|
$
|
4,395
|
$
|
3,568
|
|||
Gross Profit per Pound
of Copper/per Ounce of Gold and Silver
|
||||||||||||
Year Ended December
31, 2007
|
||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Gold
|
Silver
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
3.32
|
$
|
3.32
|
$
|
680.74
|
$
|
13.31
|
||||
Site
production and delivery, before net noncash and
|
||||||||||||
nonrecurring
costs shown below
|
1.19
|
0.85
|
172.23
|
3.37
|
||||||||
Gold
and silver credits
|
(1.36
|
)
|
–
|
–
|
–
|
|||||||
Treatment
charges
|
0.34
|
0.24
|
49.45
|
0.97
|
||||||||
Royalty
on metals
|
0.12
|
0.08
|
17.05
|
0.33
|
||||||||
Unit
net cash costs
|
0.29
|
1.17
|
238.73
|
4.67
|
||||||||
Depreciation
and amortization
|
0.17
|
0.12
|
25.54
|
0.50
|
||||||||
Noncash
and nonrecurring costs, net
|
0.04
|
0.03
|
5.90
|
0.12
|
||||||||
Total
unit costs
|
0.50
|
1.32
|
270.17
|
5.29
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales
|
0.03
|
0.03
|
1.07
|
0.03
|
||||||||
PT
Smelting intercompany profit recognized
|
0.01
|
0.01
|
1.71
|
0.03
|
||||||||
Gross
profit
|
$
|
2.86
|
$
|
2.04
|
$
|
413.35
|
$
|
8.08
|
||||
Consolidated
sales
|
||||||||||||
Copper
(millions of recoverable pounds)
|
1,131
|
1,131
|
||||||||||
Gold
(thousands of recoverable ounces)
|
2,185
|
|||||||||||
Silver
(thousands of recoverable ounces)
|
3,593
|
Year Ended December
31, 2006
|
||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Gold
|
Silver
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
3.13
|
$
|
3.13
|
$
|
566.51
|
a
|
$
|
8.59
|
b
|
||
Site
production and delivery, before net noncash and
|
||||||||||||
nonrecurring
costs shown below
|
1.03
|
0.79
|
156.24
|
3.11
|
||||||||
Gold
and silver credits
|
(0.93
|
)
|
–
|
–
|
–
|
|||||||
Treatment
charges
|
0.40
|
0.31
|
60.41
|
1.20
|
||||||||
Royalty
on metals
|
0.10
|
0.08
|
15.94
|
0.32
|
||||||||
Unit
net cash costs
|
0.60
|
1.18
|
232.59
|
4.63
|
||||||||
Depreciation
and amortization
|
0.15
|
0.12
|
23.25
|
0.46
|
||||||||
Noncash
and nonrecurring costs, net
|
0.04
|
0.03
|
5.60
|
0.11
|
||||||||
Total
unit costs
|
0.79
|
1.33
|
261.44
|
5.20
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales
|
0.10
|
c
|
0.17
|
11.53
|
0.22
|
|||||||
PT
Smelting intercompany profit eliminated
|
–
|
–
|
(0.37
|
)
|
(0.01
|
)
|
||||||
Gross
profit
|
$
|
2.44
|
$
|
1.97
|
$
|
316.23
|
$
|
3.60
|
||||
Consolidated
sales
|
||||||||||||
Copper
(millions of recoverable pounds)
|
1,201
|
1,201
|
||||||||||
Gold
(thousands of recoverable ounces)
|
1,736
|
|||||||||||
Silver
(thousands of recoverable ounces)
|
3,806
|
a.
|
Amount
was approximately $606 per ounce before a loss resulting from redemption
of our Gold-Denominated Preferred Stock, Series
II.
|
b.
|
Amount
was approximately $12 per ounce before a loss resulting from redemption of
our Silver-Denominated Preferred
Stock.
|
c.
|
Includes
a $0.06 per pound loss on the redemption of our Gold-Denominated Preferred
Stock, Series II, and a $0.01 per pound loss on the redemption of our
Silver-Denominated Preferred
Stock.
|
Year Ended December
31, 2005
|
||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Gold
|
Silver
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
1.85
|
$
|
1.85
|
$
|
456.27
|
$
|
6.36
|
a
|
|||
Site
production and delivery, before net noncash and
|
||||||||||||
nonrecurring
costs shown below
|
0.65
|
b
|
0.44
|
c
|
107.71
|
c
|
1.76
|
c
|
||||
Gold
and silver credits
|
(0.89
|
)
|
–
|
–
|
–
|
|||||||
Treatment
charges
|
0.24
|
0.16
|
39.75
|
0.65
|
||||||||
Royalty
on metals
|
0.07
|
0.05
|
11.77
|
0.19
|
||||||||
Unit
net cash costs
|
0.07
|
0.65
|
159.23
|
2.60
|
||||||||
Depreciation
and amortization
|
0.14
|
0.10
|
23.79
|
0.39
|
||||||||
Noncash
and nonrecurring costs, net
|
–
|
–
|
0.52
|
0.01
|
||||||||
Total
unit costs
|
0.21
|
0.75
|
183.54
|
3.00
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales
|
0.01
|
d
|
0.02
|
(1.14
|
)
|
0.02
|
||||||
PT
Smelting intercompany profit eliminated
|
(0.01
|
)
|
(0.01
|
)
|
(2.67
|
)
|
(0.04
|
)
|
||||
Gross
profit
|
$
|
1.64
|
$
|
1.11
|
$
|
268.92
|
$
|
3.34
|
||||
Consolidated
sales
|
||||||||||||
Copper
(millions of recoverable pounds)
|
1,457
|
1,457
|
||||||||||
Gold
(thousands of recoverable ounces)
|
2,790
|
|||||||||||
Silver
(thousands of recoverable ounces)
|
4,735
|
a.
|
Amount
was approximately $7 per ounce before a loss resulting from redemption of
our Silver-Denominated Preferred
Stock.
|
b.
|
Net
of deferred mining costs of $0.05 per pound. Following the adoption of
EITF 04-6 on January 1, 2006, stripping costs are no longer deferred
(refer to Note 1 for further
discussion).
|
c.
|
Net
of deferred mining costs of $0.03 per pound of copper, $7.37 per ounce of
gold and $0.12 per ounce of silver (see note b
above).
|
d.
|
Includes
less than a $0.01 per pound loss on the redemption of our
Silver-Denominated Preferred Stock.
|
Copper
|
Gold
|
Molybdenum
|
||||||
(billion
|
(million
|
(billion
|
||||||
pounds)
|
ounces)
|
pounds)
|
||||||
North
America
|
25.8
|
0.2
|
1.8
|
|||||
South
America
|
26.0
|
1.4
|
0.2
|
|||||
Indonesia
|
37.1
|
39.4
|
–
|
|||||
Africa
|
4.3
|
–
|
–
|
|||||
Consolidated
basis
a
|
93.2
|
41.0
|
2.0
|
|||||
Net
equity interest
b
|
77.0
|
37.0
|
1.9
|
a.
|
Consolidated
basis reserves represent estimated metal quantities after reductions for
joint venture partner interests at the Morenci mine in North America and
at the Grasberg mining complex in
Indonesia.
|
b.
|
Net
equity interest represents our net ownership interest (
i.e.
, estimated
consolidated reserves further reduced for minority
interests).
|
Copper
|
Gold
|
Molybdenum
|
||||||
(billion
|
(million
|
(billion
|
||||||
pounds)
|
ounces)
|
pounds)
|
||||||
Reserves
at December 31, 2006
a
|
93.6
|
42.5
|
2.0
|
|||||
Net
additions/revisions
|
3.5
|
0.8
|
0.1
|
|||||
Production
|
(3.9)
|
|
(2.3)
|
|
(0.1)
|
|
||
Reserves
at December 31, 2007
|
93.2
|
41.0
|
2.0
|
a.
|
Includes
Phelps Dodge reserves prior to the
acquisition.
|
Years
Ended December 31,
|
|||||||||
2007
|
2006
|
2005
|
|||||||
Gross
profit
|
$
|
23
|
$
|
90
|
$
|
46
|
|||
Add
depreciation and amortization expense
|
36
|
33
|
29
|
||||||
Other
|
1
|
–
|
3
|
||||||
Cash
margin
|
$
|
60
|
$
|
123
|
$
|
78
|
|||
Operating
income
|
$
|
3
|
$
|
74
|
$
|
35
|
|||
Concentrate
and scrap treated (thousands of metric tons)
|
952
|
954
|
975
|
||||||
Anodes
production (millions of pounds)
|
565
|
581
|
627
|
||||||
Treatment
rates per pound
|
$
|
0.27
|
$
|
0.33
|
$
|
0.23
|
|||
Cathodes
sales (millions of pounds)
|
555
|
529
|
549
|
||||||
Gold
sales in anodes and slimes (thousands of ounces)
|
663
|
667
|
543
|
||||||
December
31,
|
||||||
2007
|
2006
|
|||||
Cash
from U.S. operations
|
$
|
0.1
|
$
|
–
|
||
Cash
from international operations
|
1.5
|
0.9
|
||||
Total
consolidated cash and cash equivalents
|
1.6
|
0.9
|
||||
Less:
minority interests’ share
|
(0.3
|
)
|
–
|
|||
Cash,
net of minority interests’ share
|
1.3
|
0.9
|
||||
Withholding
taxes if distributed
a
|
(0.2
|
)
|
(0.1
|
)
|
||
Net
cash available to FCX
|
$
|
1.1
|
$
|
0.8
|
||
a.
|
Cash
at our international operations is subject to foreign withholding taxes of
up to 22 percent upon repatriation into the
U.S.
|
Tenke
Fungurume mine development
|
$
|
500
|
||
Climax
molybdenum mine restart
|
250
|
|||
Incremental
expansions
a
|
185
|
|||
Big
Gossan mine development
|
160
|
|||
El
Abra sulfide mine
|
70
|
|||
Other
major projects
|
135
|
|||
$
|
1,300
|
a.
|
We
are continuing to evaluate expansion opportunities associated with
existing ore bodies. As an initial step, we are pursuing incremental
expansions at Morenci, Sierrita, Bagdad and Cerro Verde. The projects will
require a capital investment of approximately $400 million and are
expected to provide incremental production ramping up to over 200 million
pounds of copper and 7 million pounds of molybdenum by 2011. Detailed
engineering for these projects is under
way.
|
·
|
$317
million for the completion of a tender offer and privately negotiated
transactions to induce conversion of our 7% Convertible Senior Notes into
FCX common stock.
|
·
|
$167
million for the mandatory redemption of our Gold-Denominated Preferred
Stock, Series II.
|
·
|
$13
million for the final mandatory redemption of our Silver-Denominated
Preferred Stock.
|
·
|
$11
million for open-market purchases of our 10⅛% Senior
Notes.
|
·
|
$251
million for privately negotiated transactions to induce conversion of a
portion of our 7% Convertible Senior Notes into FCX common
stock.
|
·
|
$231
million for open-market purchases, including (i) $216 million of our 10⅛%
Senior Notes, (ii) $11 million of our 7.50% Senior Notes and (iii) $4
million of our 7.20% Senior Notes.
|
·
|
$187
million to prepay certain bank
debt.
|
·
|
The
partial mandatory redemption of $13 million of our Silver-Denominated
Preferred Stock.
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
|||||||||||||
Equipment
loans and other
|
$
|
31
|
$
|
49
|
$
|
22
|
$
|
22
|
$
|
74
|
$
|
85
|
||||||
Senior
Notes
|
–
|
–
|
–
|
119
|
–
|
6,809
|
||||||||||||
$
|
31
|
$
|
49
|
$
|
22
|
$
|
141
|
$
|
74
|
$
|
6,894
|
Less
Than
|
Years
|
Years
|
||||||||||||
Total
|
1
Year
|
2 -
3
|
4 -
5
|
Thereafter
|
||||||||||
Scheduled
interest payment obligations
a
|
$
|
5,399
|
$
|
580
|
$
|
1,158
|
$
|
1,138
|
$
|
2,523
|
||||
Reclamation and environmental obligations b |
8,826
|
249 | 533 | 421 | 7,623 | |||||||||
Take-or-pay
contracts
c
|
2,286
|
1,536
|
542
|
184
|
24
|
|||||||||
Operating
lease obligations
|
103
|
26
|
45
|
30
|
2
|
|||||||||
Atlantic
Copper obligation to insurance company
d
|
95
|
11
|
21
|
21
|
42
|
|||||||||
PT
Freeport Indonesia mine closure and reclamation fund
e
|
19
|
1
|
1
|
1
|
16
|
|||||||||
Total
contractual cash obligations
f
|
$
|
16,728
|
$
|
2,403
|
$
|
2,300
|
$
|
1,795
|
$
|
10,230
|
a.
|
Scheduled
interest payment obligations were calculated using stated coupon rates for
fixed-rate debt and interest rates applicable at December 31, 2007, for
variable-rate debt.
|
b.
|
Represents
estimated cash payments, on an escalated basis, associated
with reclamation and environmental activities. The timing and the
amount of these payments could change as a result of changes in regulatory
requirements, changes in scope and costs of reclamation activities and as
actual spending occurs. Refer to Note 15 for additional discussion
of environmental and reclamation
matters.
|
c.
|
Represents
contractual obligations for purchases of goods or services that are
defined by us as agreements that are enforceable and legally binding and
that specify all significant terms. Take-or-pay contracts primarily
comprise the procurement of copper concentrates and cathodes ($1.7
billion) and transportation ($270 million). Some of our take-or-pay
contracts are settled based on the prevailing market rate for the service
or commodity purchased, and in some cases, the amount of the actual
obligation may change over time because of market conditions.
Obligations for copper concentrates and cathodes provide for deliveries of
specified volumes, at market-based prices, to Atlantic Copper and the
North American mining sales company. Transportation obligations are
primarily for South American contracted ocean freight rates and for North
American natural gas
transportation.
|
d.
|
In
August 2002, Atlantic Copper complied with Spanish legislation by agreeing
to fund 7.2 million euros annually for 15 years to an approved insurance
company for an estimated 72 million euro contractual obligation to
supplement amounts paid to certain retired employees. Atlantic Copper had
$72 million recorded for this obligation at December 31,
2007.
|
e.
|
Represents
PT Freeport Indonesia’s commitments to contribute amounts to a cash fund
designed to accumulate at least $100 million by the end of our Indonesian
mining activities to pay for mine closure and
reclamation.
|
f.
|
This
table excludes certain other obligations in our consolidated balance
sheets, including estimated funding for pension obligations as the
funding may vary from year-to-year based on changes in the fair value of
plan assets and actuarial assumptions and Financial Accounting
Standards Board (FASB) Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109”
(FIN 48), liabilities totaling $115 million that relate to unrecognized
tax benefits where the timing of settlement is not determinable. This
table also excludes purchase orders for the purchase of inventory and
other goods and services that represent contractual obligations, as
purchase orders typically represent authorizations to purchase rather than
binding agreements.
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Fair
Value
|
|||||||||||||||
Fixed-rate
debt
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
119
|
$
|
–
|
$
|
5,809
|
$
|
6,373
|
|||||||
Average
interest rate
|
–
|
–
|
–
|
8.7
|
%
|
–
|
8.2
|
%
|
8.2
|
%
|
|||||||||||
Variable-rate
debt
|
$
|
31
|
$
|
49
|
$
|
22
|
$
|
22
|
$
|
74
|
$
|
1,085
|
$
|
1,222
|
|||||||
Average
interest rate
|
6.8
|
%
|
5.3
|
%
|
6.9
|
%
|
7.3
|
%
|
6.1
|
%
|
7.9
|
%
|
7.6
|
%
|
Year Ended December
31, 2007
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
Method
|
Copper
|
Molybdenum
|
a
|
Other
|
b
|
Total
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
4,242
|
$
|
4,242
|
$
|
866
|
$
|
60
|
5,168
|
||||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
1,883
|
1,609
|
312
|
23
|
1,944
|
||||||||||
By-product
credits
a
|
(865
|
)
|
–
|
–
|
–
|
–
|
|||||||||
Treatment
charges
|
119
|
116
|
–
|
3
|
119
|
||||||||||
Net
cash costs
|
1,137
|
1,725
|
312
|
26
|
2,063
|
||||||||||
Depreciation,
depletion and amortization
|
192
|
165
|
26
|
1
|
192
|
||||||||||
Noncash
and nonrecurring costs, net
|
22
|
21
|
1
|
–
|
22
|
||||||||||
Total
costs
|
1,351
|
1,911
|
339
|
27
|
2,277
|
||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and hedging
|
(139
|
)
|
(139
|
)
|
–
|
–
|
(139
|
)
|
|||||||
Idle
facility and other non-inventoriable costs
|
(65
|
)
|
(64
|
)
|
(1
|
)
|
–
|
(65
|
)
|
||||||
Gross
profit
|
$
|
2,687
|
$
|
2,128
|
$
|
526
|
$
|
33
|
$
|
2,687
|
|||||
Reconciliation
to Amounts Reported
|
|||||||||||||||
Depreciation,
|
|||||||||||||||
Production
|
Depletion
and
|
||||||||||||||
Revenues
|
and
Delivery
|
Amortization
|
|||||||||||||
Totals
presented above
|
$
|
5,168
|
$
|
1,944
|
$
|
192
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
22
|
N/A
|
||||||||||||
Treatment
charges per above
|
N/A
|
119
|
N/A
|
||||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and hedging per above
|
(139
|
)
|
N/A
|
N/A
|
|||||||||||
Purchase
accounting impact
|
120
|
851
|
762
|
||||||||||||
Eliminations
and other
|
14,084
|
6,874
|
556
|
||||||||||||
As
reported in FCX’s pro forma consolidated
|
|||||||||||||||
financial
results
|
$
|
19,233
|
$
|
9,810
|
$
|
1,510
|
a.
|
Molybdenum
by-product credits reflect volumes produced at market-based pricing and
also include tolling revenues at
Sierrita.
|
b.
|
Includes
gold and silver product revenues and production
costs.
|
Year Ended December
31, 2006
|
||||||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||||||
Method
|
Copper
|
Molybdenum
|
a
|
Other
|
b
|
Total
|
||||||||||
Revenues,
after adjustments shown below
|
$
|
4,121
|
$
|
4,121
|
$
|
772
|
$
|
44
|
$
|
4,937
|
||||||
Site
production and delivery, before net noncash
|
||||||||||||||||
and
nonrecurring costs shown below
|
1,472
|
1,199
|
291
|
25
|
1,515
|
|||||||||||
By-product
credits
a
|
(773
|
)
|
–
|
–
|
–
|
–
|
||||||||||
Treatment
charges
|
87
|
83
|
–
|
4
|
87
|
|||||||||||
Net
cash costs
|
786
|
1,282
|
291
|
29
|
1,602
|
|||||||||||
Depreciation,
depletion and amortization
|
147
|
122
|
23
|
2
|
147
|
|||||||||||
Noncash
and nonrecurring costs, net
|
20
|
19
|
1
|
–
|
20
|
|||||||||||
Total
costs
|
953
|
1,423
|
315
|
31
|
1,769
|
|||||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||||||
period
open sales and hedging
|
(1,205
|
)
|
(1,205
|
)
|
–
|
–
|
(1,205
|
)
|
||||||||
Idle
facility and other non-inventoriable costs
|
(36
|
)
|
(36
|
)
|
–
|
–
|
(36
|
)
|
||||||||
Gross
profit
|
$
|
1,927
|
$
|
1,457
|
$
|
457
|
$
|
13
|
$
|
1,927
|
||||||
Reconciliation
to Amounts Reported
|
||||||||||||||||
Depreciation,
|
||||||||||||||||
Production
|
Depletion
and
|
|||||||||||||||
Revenues
|
and
Delivery
|
Amortization
|
||||||||||||||
Totals
presented above
|
$
|
4,937
|
$
|
1,515
|
$
|
147
|
||||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
20
|
N/A
|
|||||||||||||
Treatment
charges per above
|
N/A
|
87
|
N/A
|
|||||||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||||||
period
open sales and hedging per above
|
(1,205
|
)
|
N/A
|
N/A
|
||||||||||||
Purchase
accounting impact
|
120
|
1,526
|
722
|
|||||||||||||
Eliminations
and other
|
12,801
|
6,652
|
515
|
|||||||||||||
As
reported in FCX’s pro forma consolidated
|
||||||||||||||||
financial
statements
|
$
|
16,653
|
$
|
9,880
|
$
|
1,384
|
||||||||||
a.
|
Molybdenum
by-product credits reflect volumes produced at market-based pricing and
also include tolling revenues at
Sierrita.
|
b.
|
Includes
gold and silver product revenues and production
costs.
|
Year Ended December
31, 2005
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
Method
|
Copper
|
Molybdenum
|
a
|
Other
|
b
|
Total
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
2,247
|
$
|
2,247
|
$
|
978
|
$
|
26
|
$
|
3,251
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
1,330
|
1,061
|
293
|
15
|
1,369
|
||||||||||
By-product
credits
a
|
(965
|
)
|
–
|
–
|
–
|
–
|
|||||||||
Treatment
charges
|
92
|
90
|
–
|
2
|
92
|
||||||||||
Net
cash costs
|
457
|
1,151
|
293
|
17
|
1,461
|
||||||||||
Depreciation,
depletion and amortization
|
143
|
112
|
30
|
1
|
143
|
||||||||||
Noncash
and nonrecurring costs, net
|
16
|
15
|
1
|
–
|
16
|
||||||||||
Total
costs
|
616
|
1,278
|
324
|
18
|
1,620
|
||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and hedging
|
(187
|
)
|
(187
|
)
|
–
|
–
|
(187
|
)
|
|||||||
Idle
facility and other non-inventoriable costs
|
(34
|
)
|
(34
|
)
|
–
|
–
|
(34
|
)
|
|||||||
Gross
profit
|
$
|
1,410
|
$
|
748
|
$
|
654
|
$
|
8
|
$
|
1,410
|
|||||
Reconciliation
to Amounts Reported
|
|||||||||||||||
Depreciation,
|
|||||||||||||||
Production
|
Depletion
and
|
||||||||||||||
Revenues
|
and
Delivery
|
Amortization
|
|||||||||||||
Totals
presented above
|
$
|
3,251
|
$
|
1,369
|
$
|
143
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
16
|
N/A
|
||||||||||||
Treatment
charges per above
|
N/A
|
92
|
N/A
|
||||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and hedging per above
|
(187
|
)
|
N/A
|
N/A
|
|||||||||||
Eliminations
and other
|
5,223
|
3,805
|
299
|
||||||||||||
As
reported in Phelps Dodge consolidated
|
|||||||||||||||
financial
statements
c
|
$
|
8,287
|
$
|
5,282
|
$
|
442
|
|||||||||
a.
|
Molybdenum
by-product credits reflect volumes produced at market-based pricing and
also include tolling revenues at
Sierrita.
|
b.
|
Includes
gold and silver product revenues and production
costs.
|
c.
|
Obtained
from the Phelps Dodge Form 10-K for the year ended December 31,
2005.
|
Years
Ended December 31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Revenues
|
$
|
1,029
|
$
|
820
|
$
|
890
|
||||
Site
production and delivery, before net noncash
|
||||||||||
and
nonrecurring costs shown below
|
171
|
137
|
118
|
|||||||
Net
cash costs
|
171
|
137
|
118
|
|||||||
Depreciation
and amortization
|
39
|
33
|
28
|
|||||||
Noncash
and nonrecurring costs, net
|
1
|
1
|
–
|
|||||||
Total
costs
|
211
|
171
|
146
|
|||||||
Gross
profit
a
|
$
|
818
|
$
|
649
|
$
|
744
|
||||
Reconciliation
to Amounts Reported
|
||||||||||
Depreciation,
|
||||||||||
Production
|
Depletion
and
|
|||||||||
Revenues
|
and
Delivery
|
Amortization
|
||||||||
Year Ended December
31, 2007
|
||||||||||
Totals
presented above
|
$
|
1,029
|
$
|
171
|
$
|
39
|
||||
Purchase
accounting impact
|
120
|
851
|
762
|
|||||||
Eliminations
and other
|
18,084
|
8,788
|
709
|
|||||||
As
reported in FCX’s pro forma consolidated financial results
|
$
|
19,233
|
$
|
9,810
|
$
|
1,510
|
||||
Year Ended December
31, 2006
|
||||||||||
Totals
presented above
|
$
|
820
|
$
|
137
|
$
|
33
|
||||
Purchase
accounting impact
|
120
|
1,526
|
722
|
|||||||
Eliminations
and other
|
15,713
|
8,137
|
629
|
|||||||
As
reported in FCX’s pro forma consolidated financial results
|
$
|
16,653
|
$
|
9,880
|
$
|
1,384
|
||||
Year Ended December
31, 2005
|
||||||||||
Totals
presented above
|
$
|
890
|
$
|
118
|
$
|
28
|
||||
Eliminations
and other
|
7,397
|
5,164
|
414
|
|||||||
As
reported in Phelps Dodge consolidated financial results
b
|
$
|
8,287
|
$
|
5,282
|
$
|
442
|
||||
a.
|
Gross
profit reflects sales of Henderson products based on volumes produced at
market-based pricing. On a consolidated basis, the Molybdenum segment
includes profits on sales as they are made to third parties and
realizations based on actual contract
terms.
|
b.
|
Obtained
from the Phelps Dodge Form 10-K for the year ended December 31,
2005.
|
Year Ended December
31, 2007
|
||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Other
a
|
Total
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
4,552
|
$
|
4,552
|
$
|
140
|
$
|
4,692
|
||||
Site
production and delivery, before net noncash
|
||||||||||||
nonrecurring
costs shown below
|
1,268
|
1,221
|
61
|
1,282
|
||||||||
By-product
credits
|
(126
|
)
|
–
|
–
|
–
|
|||||||
Treatment
charges
|
286
|
278
|
8
|
286
|
||||||||
Net
cash costs
|
1,428
|
1,499
|
69
|
1,568
|
||||||||
Depreciation,
depletion and amortization
|
200
|
196
|
4
|
200
|
||||||||
Noncash
and nonrecurring costs, net
|
3
|
3
|
–
|
3
|
||||||||
Total
costs
|
1,631
|
1,698
|
73
|
1,771
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales and hedging
|
18
|
19
|
(1
|
)
|
18
|
|||||||
Other
non-inventoriable costs
|
(34
|
)
|
(32
|
)
|
(2
|
)
|
(34
|
)
|
||||
Gross
profit
|
$
|
2,905
|
$
|
2,841
|
$
|
64
|
$
|
2,905
|
||||
Reconciliation
to Amounts Reported
|
||||||||||||
Depreciation,
|
||||||||||||
Production
|
Depletion
and
|
|||||||||||
Revenues
|
and
Delivery
|
Amortization
|
||||||||||
Totals
presented above
|
$
|
4,692
|
$
|
1,282
|
$
|
200
|
||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
3
|
N/A
|
|||||||||
Less:
Treatment charges per above
|
(286
|
)
|
N/A
|
N/A
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales and hedging per above
|
18
|
N/A
|
N/A
|
|||||||||
Purchased
metal
|
218
|
218
|
N/A
|
|||||||||
Purchase
accounting impact
|
120
|
851
|
762
|
|||||||||
Eliminations
and other
|
14,471
|
7,456
|
548
|
|||||||||
As
reported in FCX’s pro forma consolidated financial results
|
$
|
19,233
|
$
|
9,810
|
$
|
1,510
|
||||||
a.
|
Includes
gold, silver and molybdenum product revenues and production
costs.
|
Year Ended December
31, 2006
|
||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Other
a
|
Total
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
3,530
|
$
|
3,530
|
$
|
91
|
$
|
3,621
|
||||
Site
production and delivery, before net noncash and
|
||||||||||||
nonrecurring
costs shown below
|
918
|
891
|
27
|
918
|
||||||||
By-product
credits
|
(91
|
)
|
–
|
–
|
–
|
|||||||
Treatment
charges
|
198
|
192
|
6
|
198
|
||||||||
Net
cash costs
|
1,025
|
1,083
|
33
|
1,116
|
||||||||
Depreciation,
depletion and amortization
|
193
|
190
|
3
|
193
|
||||||||
Noncash
and nonrecurring costs, net
|
2
|
2
|
–
|
2
|
||||||||
Total
costs
|
1,220
|
1,275
|
36
|
1,311
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales and hedging
|
(18
|
)
|
(9
|
)
|
(9
|
)
|
(18
|
)
|
||||
Other
non-inventoriable costs
|
(22
|
)
|
(21
|
)
|
(1
|
)
|
(22
|
)
|
||||
Gross
profit
|
$
|
2,270
|
$
|
2,225
|
$
|
45
|
$
|
2,270
|
||||
Reconciliation
to Amounts Reported
|
||||||||||||
Depreciation,
|
||||||||||||
Production
|
Depletion
and
|
|||||||||||
Revenues
|
and
Delivery
|
Amortization
|
||||||||||
Totals
presented above
|
$
|
3,621
|
$
|
918
|
$
|
193
|
||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
2
|
N/A
|
|||||||||
Less:
Treatment charges per above
|
(198
|
)
|
N/A
|
N/A
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales and hedging per above
|
(18
|
)
|
N/A
|
N/A
|
||||||||
Purchased
metal
|
213
|
213
|
N/A
|
|||||||||
Purchase
accounting impact
|
120
|
1,526
|
722
|
|||||||||
Eliminations
and other
|
12,915
|
7,141
|
469
|
|||||||||
As
reported in FCX’s pro forma consolidated financial results
|
$
|
16,653
|
$
|
9,880
|
$
|
1,384
|
||||||
a.
|
Includes
gold and silver product revenues and production
costs.
|
Year Ended December
31, 2005
|
||||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Other
a
|
Total
|
|||||||||
Revenues,
after adjustments shown below
|
$
|
1,862
|
$
|
1,862
|
$
|
62
|
$
|
1,924
|
||||
Site
production and delivery, before net noncash and
|
||||||||||||
nonrecurring
costs shown below
|
743
|
717
|
26
|
743
|
||||||||
By-product
credits
|
(62
|
)
|
–
|
–
|
–
|
|||||||
Treatment
charges
|
104
|
96
|
8
|
104
|
||||||||
Net
cash costs
|
785
|
813
|
34
|
847
|
||||||||
Depreciation,
depletion and amortization
|
187
|
184
|
3
|
187
|
||||||||
Noncash
and nonrecurring costs, net
|
2
|
2
|
–
|
2
|
||||||||
Total
costs
|
974
|
999
|
37
|
1,036
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales and hedging
|
(105
|
)
|
(101
|
)
|
(4
|
)
|
(105
|
)
|
||||
Other
non-inventoriable costs
|
(10
|
)
|
(9
|
)
|
(1
|
)
|
(10
|
)
|
||||
Gross
profit
|
$
|
773
|
$
|
753
|
$
|
20
|
$
|
773
|
||||
Reconciliation
to Amounts Reported
|
||||||||||||
Depreciation,
|
||||||||||||
Production
|
Depletion
and
|
|||||||||||
Revenues
|
and
Delivery
|
Amortization
|
||||||||||
Totals
presented above
|
$
|
1,924
|
$
|
743
|
$
|
187
|
||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
2
|
N/A
|
|||||||||
Less:
Treatment charges per above
|
(104
|
)
|
N/A
|
N/A
|
||||||||
Revenue
adjustments, primarily for pricing on prior
|
||||||||||||
period
open sales and hedging per above
|
(105
|
)
|
N/A
|
N/A
|
||||||||
Purchased
metal
|
144
|
144
|
N/A
|
|||||||||
Eliminations
and other
|
6,428
|
4,393
|
255
|
|||||||||
As
reported in Phelps Dodge consolidated financial results
b
|
$
|
8,287
|
$
|
5,282
|
$
|
442
|
||||||
a.
|
Includes
gold and silver product revenues and production
costs.
|
b.
|
Obtained
from the Phelps Dodge Form 10-K for the year ended December 31,
2005.
|
Year Ended December
31, 2007
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
Method
|
Copper
|
Gold
|
Silver
|
Total
|
|||||||||||
Revenues,
after adjustments shown below
|
$
|
3,777
|
$
|
3,777
|
$
|
1,490
|
$
|
48
|
$
|
5,315
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
1,342
|
954
|
376
|
12
|
1,342
|
||||||||||
Gold
and silver credits
|
(1,538
|
)
|
–
|
–
|
–
|
–
|
|||||||||
Treatment
charges
|
385
|
274
|
108
|
3
|
385
|
||||||||||
Royalty
on metals
|
133
|
94
|
38
|
1
|
133
|
||||||||||
Net
cash costs
|
322
|
1,322
|
522
|
16
|
1,860
|
||||||||||
Depreciation
and amortization
|
199
|
141
|
56
|
2
|
199
|
||||||||||
Noncash
and nonrecurring costs, net
|
46
|
33
|
12
|
1
|
46
|
||||||||||
Total
costs
|
567
|
1,496
|
590
|
19
|
2,105
|
||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales
|
11
|
11
|
–
|
–
|
11
|
||||||||||
PT
Smelting intercompany profit recognized
|
13
|
10
|
3
|
–
|
13
|
||||||||||
Gross
profit
|
$
|
3,234
|
$
|
2,302
|
$
|
903
|
$
|
29
|
$
|
3,234
|
|||||
Reconciliation
to Amounts Reported
|
|||||||||||||||
Depreciation,
|
|||||||||||||||
Production
|
Depletion
and
|
||||||||||||||
Revenues
|
and
Delivery
|
Amortization
|
|||||||||||||
Totals
presented above
|
$
|
5,315
|
$
|
1,342
|
$
|
199
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
46
|
N/A
|
||||||||||||
Less:
Treatment charges per above
|
(385
|
)
|
N/A
|
N/A
|
|||||||||||
Less:
Royalty per above
|
(133
|
)
|
N/A
|
N/A
|
|||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales per above
|
11
|
N/A
|
N/A
|
||||||||||||
Total
Indonesian mining operations
|
4,808
|
1,388
|
199
|
||||||||||||
North
American mining operations
|
8,650
|
6,292
|
611
|
||||||||||||
South
American mining operations
|
3,845
|
1,278
|
377
|
||||||||||||
Atlantic
Copper smelting & refining
|
2,388
|
2,329
|
36
|
||||||||||||
Corporate,
other & eliminations
|
(2,752
|
)
|
(2,760
|
)
|
23
|
||||||||||
As
reported in FCX’s consolidated financial statements
|
$
|
16,939
|
$
|
8,527
|
$
|
1,246
|
|||||||||
Year Ended December
31, 2006
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
Method
|
Copper
|
Gold
|
Silver
|
Total
|
|||||||||||
Revenues,
after adjustments shown below
|
$
|
3,764
|
$
|
3,764
|
$
|
1,072
|
$
|
47
|
$
|
4,883
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
1,235
|
952
|
271
|
12
|
1,235
|
||||||||||
Gold
and silver credits
|
(1,119
|
)
|
–
|
–
|
–
|
–
|
|||||||||
Treatment
charges
|
477
|
368
|
104
|
5
|
477
|
||||||||||
Royalty
on metals
|
126
|
97
|
28
|
1
|
126
|
||||||||||
Net
cash costs
|
719
|
1,417
|
403
|
18
|
1,838
|
||||||||||
Depreciation
and amortization
|
184
|
142
|
40
|
2
|
184
|
||||||||||
Noncash
and nonrecurring costs, net
|
44
|
34
|
10
|
–
|
44
|
||||||||||
Total
costs
|
947
|
1,593
|
453
|
20
|
2,066
|
||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and gold/silver hedging
|
115
|
a
|
197
|
(69
|
)
|
(13
|
)
|
115
|
|||||||
PT
Smelting intercompany profit elimination
|
(3
|
)
|
(2
|
)
|
(1
|
)
|
–
|
(3
|
)
|
||||||
Gross
profit
|
$
|
2,929
|
$
|
2,366
|
$
|
549
|
$
|
14
|
$
|
2,929
|
|||||
Reconciliation
to Amounts Reported
|
|||||||||||||||
Depreciation,
|
|||||||||||||||
Production
|
Depletion
and
|
||||||||||||||
Revenues
|
and
Delivery
|
Amortization
|
|||||||||||||
Totals
presented above
|
$
|
4,883
|
$
|
1,235
|
$
|
184
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
44
|
N/A
|
||||||||||||
Less:
Treatment charges per above
|
(477
|
)
|
N/A
|
N/A
|
|||||||||||
Less:
Royalty per above
|
(126
|
)
|
N/A
|
N/A
|
|||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and hedging per above
|
115
|
N/A
|
N/A
|
||||||||||||
Total
Indonesian mining operations
|
4,395
|
1,279
|
184
|
||||||||||||
Atlantic
Copper smelting & refining
|
2,242
|
2,119
|
33
|
||||||||||||
Corporation,
other & eliminations
|
(846
|
)
|
(873
|
)
|
11
|
||||||||||
As
reported in FCX’s consolidated financial statements
|
$
|
5,791
|
$
|
2,525
|
$
|
228
|
|||||||||
a.
|
Includes
a $69 million loss on the redemption of FCX’s Gold-Denominated Preferred
Stock, Series II, and a $13 million loss on the redemption of FCX’s
Silver-Denominated Preferred Stock.
|
Year Ended December
31, 2005
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
Method
|
Copper
|
Gold
|
Silver
|
Total
|
|||||||||||
Revenues,
after adjustments shown below
|
$
|
2,707
|
$
|
2,707
|
$
|
1,270
|
$
|
35
|
$
|
4,012
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
949
|
a
|
641
|
b
|
300
|
b
|
8
|
c
|
949
|
||||||
Gold
and silver credits
|
(1,305
|
)
|
–
|
–
|
–
|
–
|
|||||||||
Treatment
charges
|
350
|
236
|
111
|
3
|
350
|
||||||||||
Royalty
on metals
|
104
|
70
|
33
|
1
|
104
|
||||||||||
Net
cash costs
|
98
|
947
|
444
|
12
|
1,403
|
||||||||||
Depreciation
and amortization
|
210
|
142
|
66
|
2
|
210
|
||||||||||
Noncash
and nonrecurring costs, net
|
5
|
3
|
2
|
–
|
5
|
||||||||||
Total
costs
|
313
|
1,092
|
512
|
14
|
1,618
|
||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and silver hedging
|
10
|
c
|
15
|
–
|
(5
|
)
|
10
|
||||||||
PT
Smelting intercompany profit elimination
|
(23
|
)
|
(16
|
)
|
(7
|
)
|
–
|
(23
|
)
|
||||||
Gross
profit
|
$
|
2,381
|
$
|
1,614
|
$
|
751
|
$
|
16
|
$
|
2,381
|
|||||
Reconciliation
to Amounts Reported
|
|||||||||||||||
Depreciation,
|
|||||||||||||||
Production
|
Depletion
and
|
||||||||||||||
Revenues
|
and
Delivery
|
Amortization
|
|||||||||||||
Totals
presented above
|
$
|
4,012
|
$
|
949
|
$
|
210
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
5
|
N/A
|
||||||||||||
Less:
Treatment charges per above
|
(350
|
)
|
N/A
|
N/A
|
|||||||||||
Less:
Royalty per above
|
(104
|
)
|
N/A
|
N/A
|
|||||||||||
Revenue
adjustments, primarily for pricing on prior
|
|||||||||||||||
period
open sales and hedging per above
|
10
|
N/A
|
N/A
|
||||||||||||
Total
Indonesian mining operations
|
3,568
|
954
|
210
|
||||||||||||
Atlantic
Copper smelting & refining
|
1,363
|
1,288
|
29
|
||||||||||||
Corporation,
other & eliminations
|
(752
|
)
|
(604
|
)
|
12
|
||||||||||
As
reported in FCX’s consolidated financial statements
|
$
|
4,179
|
$
|
1,638
|
$
|
251
|
|||||||||
a.
|
Net
of deferred mining costs totaling $65 million. Following the adoption of
EITF 04-6 on January 1, 2006, stripping costs are no longer deferred
(refer to Note 1 and “New Accounting Standards” for further
discussion).
|
b.
|
Net
of deferred mining costs totaling $44 million for copper, $21 million for
gold and $1 million for silver (see note a
above).
|
c.
|
Includes
a $5 million loss on the redemption of our Silver-Denominated Preferred
Stock.
|
·
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the Company’s
assets;
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and
directors of the Company; and
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on the financial
statements.
|
/s/
Richard C. Adkerson
|
/s/
Kathleen L. Quirk
|
|
Richard
C. Adkerson
|
Kathleen
L. Quirk
|
|
President
and Chief Executive Officer
|
Executive
Vice President,
|
|
Chief
Financial Officer and Treasurer
|
Years
Ended December 31,
|
|||||||||
2007
|
2006
|
2005
|
|||||||
(In
Millions, Except Per Share Amounts)
|
|||||||||
Revenues
|
$
|
16,939
|
$
|
5,791
|
$
|
4,179
|
|||
Cost
of sales:
|
|||||||||
Production
and delivery
|
8,527
|
2,525
|
1,638
|
||||||
Depreciation,
depletion and amortization
|
1,246
|
228
|
251
|
||||||
Total
cost of sales
|
9,773
|
2,753
|
1,889
|
||||||
Exploration
and research expenses
|
145
|
12
|
9
|
||||||
Selling,
general and administrative expenses
|
466
|
157
|
104
|
||||||
Total
costs and expenses
|
10,384
|
2,922
|
2,002
|
||||||
Operating
income
|
6,555
|
2,869
|
2,177
|
||||||
Interest
expense, net
|
(513
|
)
|
(76
|
)
|
(132
|
)
|
|||
Losses
on early extinguishment and conversion of debt, net
|
(173
|
)
|
(32
|
)
|
(52
|
)
|
|||
Gains
on sales of assets
|
85
|
31
|
7
|
||||||
Other
income, net
|
157
|
28
|
28
|
||||||
Equity
in affiliated companies’ net earnings
|
22
|
6
|
9
|
||||||
Income
from continuing operations before income taxes
|
|||||||||
and
minority interests
|
6,133
|
2,826
|
2,037
|
||||||
Provision
for income taxes
|
(2,400
|
)
|
(1,201
|
)
|
(915
|
)
|
|||
Minority
interests in net income of consolidated subsidiaries
|
(791
|
)
|
(168
|
)
|
(127
|
)
|
|||
Income
from continuing operations
|
2,942
|
1,457
|
995
|
||||||
Income
from discontinued operations, net of taxes
|
35
|
–
|
–
|
||||||
Net
income
|
2,977
|
1,457
|
995
|
||||||
Preferred
dividends
|
(208
|
)
|
(61
|
)
|
(60
|
)
|
|||
Net
income applicable to common stock
|
$
|
2,769
|
$
|
1,396
|
$
|
935
|
|||
Basic
net income per share of common stock:
|
|||||||||
Continuing
operations
|
$
|
8.02
|
$
|
7.32
|
$
|
5.18
|
|||
Discontinued
operations
|
0.10
|
–
|
–
|
||||||
Basic
net income per share of common stock
|
$
|
8.12
|
$
|
7.32
|
$
|
5.18
|
|||
Diluted
net income per share of common stock:
|
|||||||||
Continuing
operations
|
$
|
7.41
|
$
|
6.63
|
$
|
4.67
|
|||
Discontinued
operations
|
0.09
|
–
|
–
|
||||||
Diluted
net income per share of common stock
|
$
|
7.50
|
$
|
6.63
|
$
|
4.67
|
|||
Average
common shares outstanding:
|
|||||||||
Basic
|
341
|
191
|
180
|
||||||
Diluted
|
397
|
221
|
220
|
||||||
Dividends
declared per share of common stock
|
$
|
1.375
|
$
|
5.0625
|
$
|
2.50
|
|||
Years
Ended December 31,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
(In
Millions)
|
||||||||||
Cash
flow from operating activities:
|
||||||||||
Net
income
|
$
|
2,977
|
$
|
1,457
|
$
|
995
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Depreciation,
depletion and amortization
|
1,264
|
228
|
251
|
|||||||
Minority
interests in net income of consolidated subsidiaries
|
802
|
168
|
127
|
|||||||
Noncash
compensation and benefits
|
214
|
85
|
29
|
|||||||
Unrealized
losses on copper price protection program
|
175
|
–
|
–
|
|||||||
Losses
on early extinguishment and conversion of debt, net
|
173
|
32
|
52
|
|||||||
Deferred
income taxes
|
(288
|
)
|
16
|
(32
|
)
|
|||||
Gains
on sales of assets
|
(85
|
)
|
(31
|
)
|
(7
|
)
|
||||
Other,
net
|
(65
|
)
|
25
|
(42
|
)
|
|||||
(Increases)
decreases in working capital, excluding amounts
|
||||||||||
acquired
from Phelps Dodge:
|
||||||||||
Accounts
receivable
|
428
|
196
|
(253
|
)
|
||||||
Inventories
|
272
|
(146
|
)
|
(108
|
)
|
|||||
Prepaid
expenses and other
|
21
|
(27
|
)
|
–
|
||||||
Accounts
payable and accrued liabilities
|
313
|
15
|
282
|
|||||||
Accrued
income taxes
|
24
|
(152
|
)
|
258
|
||||||
Net
cash provided by operating activities
|
6,225
|
1,866
|
1,552
|
|||||||
Cash
flow from investing activities:
|
||||||||||
Acquisition
of Phelps Dodge, net of cash acquired
|
(13,910
|
)
|
(5
|
)
|
–
|
|||||
Phelps
Dodge capital expenditures
|
(1,333
|
)
|
–
|
–
|
||||||
PT
Freeport Indonesia capital expenditures
|
(368
|
)
|
(234
|
)
|
(129
|
)
|
||||
Other
capital expenditures
|
(54
|
)
|
(17
|
)
|
(14
|
)
|
||||
Net
proceeds from the sale of Phelps Dodge International
Corporation
|
597
|
–
|
–
|
|||||||
Proceeds
from the sales of assets
|
260
|
34
|
7
|
|||||||
Other,
net
|
(53
|
)
|
(2
|
)
|
2
|
|||||
Net
cash used in investing activities
|
(14,861
|
)
|
(224
|
)
|
(134
|
)
|
||||
Cash
flow from financing activities:
|
||||||||||
Proceeds
from term loans under bank credit facility
|
12,450
|
–
|
–
|
|||||||
Repayments
of term loans under bank credit facility
|
(12,450
|
)
|
–
|
–
|
||||||
Net
proceeds from sales of senior notes
|
5,880
|
–
|
–
|
|||||||
Net
proceeds from sale of common stock
|
2,816
|
–
|
–
|
|||||||
Net
proceeds from sale of 6¾% Mandatory Convertible Preferred
Stock
|
2,803
|
–
|
–
|
|||||||
Proceeds
from other debt
|
744
|
103
|
66
|
|||||||
Repayments
of other debt and redemption of preferred stock
|
(1,069
|
)
|
(394
|
)
|
(559
|
)
|
||||
Purchases
of FCX common shares
|
–
|
(100
|
)
|
(80
|
)
|
|||||
Cash
dividends paid:
|
||||||||||
Common
stock
|
(421
|
)
|
(916
|
)
|
(453
|
)
|
||||
Preferred
stock
|
(175
|
)
|
(61
|
)
|
(60
|
)
|
||||
Minority
interests
|
(967
|
)
|
(161
|
)
|
(125
|
)
|
||||
Net
(payments for) proceeds from exercised stock options
|
(14
|
)
|
15
|
5
|
||||||
Excess
tax benefit from exercised stock options
|
16
|
21
|
–
|
|||||||
Bank
credit facilities fees and other, net
|
(258
|
)
|
(6
|
)
|
–
|
|||||
Net
cash provided by (used in) financing activities
|
9,355
|
(1,499
|
)
|
(1,206
|
)
|
|||||
Net
increase in cash and cash equivalents
|
719
|
143
|
212
|
|||||||
Cash
and cash equivalents at beginning of year
|
907
|
764
|
552
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
1,626
|
$
|
907
|
$
|
764
|
||||
Interest
paid
|
$
|
504
|
$
|
80
|
$
|
140
|
||||
Income
taxes paid
|
$
|
2,660
|
$
|
1,288
|
$
|
670
|
||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
(In
Millions, Except Par Values)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
1,626
|
$
|
907
|
||||
Trade
accounts receivable
|
1,099
|
420
|
||||||
Other
accounts receivable
|
196
|
66
|
||||||
Inventories:
|
||||||||
Product
|
1,360
|
384
|
||||||
Materials
and supplies, net
|
818
|
340
|
||||||
Mill
and leach stockpiles
|
707
|
–
|
||||||
Prepaid
expenses and other current assets
|
97
|
34
|
||||||
Total
current assets
|
5,903
|
2,151
|
||||||
Property,
plant, equipment and development costs, net
|
25,715
|
3,099
|
||||||
Goodwill
|
6,105
|
–
|
||||||
Long-term
mill and leach stockpiles
|
1,106
|
–
|
||||||
Trust
assets
|
606
|
–
|
||||||
Intangible
assets, net
|
472
|
–
|
||||||
Other
assets and deferred charges
|
754
|
140
|
||||||
Total
assets
|
$
|
40,661
|
$
|
5,390
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$
|
2,345
|
$
|
776
|
||||
Copper
price protection program
|
598
|
–
|
||||||
Accrued
income taxes
|
420
|
165
|
||||||
Dividends
payable
|
212
|
13
|
||||||
Current
portion of reclamation and environmental obligations
|
263
|
–
|
||||||
Current
portion of long-term debt and short-term borrowings
|
31
|
19
|
||||||
Total
current liabilities
|
3,869
|
973
|
||||||
Long-term
debt, less current portion:
|
||||||||
Senior
notes
|
6,928
|
620
|
||||||
Project
financing, equipment loans and other
|
252
|
41
|
||||||
Total
long-term debt, less current portion
|
7,180
|
661
|
||||||
Deferred
income taxes
|
7,300
|
800
|
||||||
Reclamation
and environmental obligations, less current portion
|
1,733
|
30
|
||||||
Other
liabilities
|
1,106
|
268
|
||||||
Total
liabilities
|
21,188
|
2,732
|
||||||
Minority
interests in consolidated subsidiaries
|
1,239
|
213
|
||||||
Stockholders’
equity:
|
||||||||
5½%
Convertible Perpetual Preferred Stock, 1 shares issued and
outstanding
|
1,100
|
1,100
|
||||||
6¾%
Mandatory Convertible Preferred Stock, 29 shares issued and
outstanding
|
2,875
|
–
|
||||||
Common
stock, par value $0.10, 497 shares and 310 shares issued,
respectively
|
50
|
31
|
||||||
Capital
in excess of par value
|
13,407
|
2,668
|
||||||
Retained
earnings
|
3,601
|
1,415
|
||||||
Accumulated
other comprehensive income (loss)
|
42
|
(20
|
)
|
|||||
Common
stock held in treasury – 114 shares and 113 shares, at cost,
respectively
|
(2,841
|
)
|
(2,749
|
)
|
||||
Total
stockholders’ equity
|
18,234
|
2,445
|
||||||
Total
liabilities and stockholders’ equity
|
$
|
40,661
|
$
|
5,390
|
||||
Convertible
Perpetual
|
Mandatory
Convertible
|
Common
Stock
|
||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Preferred
Stock
|
Common
Stock
|
Accumulated
|
Held
in Treasury
|
||||||||||||||||||||||||||||||||
Number
|
Number
|
Number
|
Capital
in
|
Other
|
Number
|
|||||||||||||||||||||||||||||||
of
|
At
Par
|
of
|
At
Par
|
of
|
At
Par
|
Excess
of
|
Retained
|
Comprehensive
|
of
|
At
|
Stockholders’
|
|||||||||||||||||||||||||
Shares
|
Value
|
Shares
|
Value
|
Shares
|
Value
|
Par
Value
|
Earnings
|
Income
(Loss)
|
Shares
|
Cost
|
Equity
|
|||||||||||||||||||||||||
(In
Millions)
|
||||||||||||||||||||||||||||||||||||
Balance
at January 1, 2005
|
1
|
$
|
1,100
|
-
|
$
|
-
|
285
|
$
|
29
|
$
|
1,853
|
$
|
605
|
$
|
11
|
106
|
$
|
(2,434
|
)
|
$
|
1,164
|
|||||||||||||||
Conversions
of 7% Convertible Senior Notes
|
-
|
-
|
-
|
-
|
8
|
1
|
246
|
-
|
-
|
-
|
-
|
247
|
||||||||||||||||||||||||
Exercised
stock options, issued restricted
|
||||||||||||||||||||||||||||||||||||
stock
and other
|
-
|
-
|
-
|
-
|
4
|
-
|
95
|
-
|
-
|
-
|
-
|
95
|
||||||||||||||||||||||||
Tax
benefit for stock option exercises
|
-
|
-
|
-
|
-
|
-
|
-
|
18
|
-
|
-
|
-
|
-
|
18
|
||||||||||||||||||||||||
Tender
of shares for exercised stock options
|
||||||||||||||||||||||||||||||||||||
and
restricted stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
(82
|
)
|
(82
|
)
|
||||||||||||||||||||||
Shares
purchased
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
(80
|
)
|
(80
|
)
|
||||||||||||||||||||||
Dividends
on common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(454
|
)
|
-
|
-
|
-
|
(454
|
)
|
||||||||||||||||||||||
Dividends
on preferred stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(60
|
)
|
-
|
-
|
-
|
(60
|
)
|
||||||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
995
|
-
|
-
|
-
|
995
|
||||||||||||||||||||||||
Other
comprehensive income (loss),
|
||||||||||||||||||||||||||||||||||||
net
of taxes:
|
||||||||||||||||||||||||||||||||||||
Change
in unrealized derivatives’ fair value
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Reclassification
to earnings
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Total
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
995
|
||||||||||||||||||||||||
Balance
at December 31, 2005
|
1
|
$
|
1,100
|
-
|
$
|
-
|
297
|
$
|
30
|
$
|
2,212
|
$
|
1,086
|
$
|
11
|
110
|
$
|
(2,596
|
)
|
$
|
1,843
|
|||||||||||||||
Conversions
of 7% Convertible Senior Notes
|
-
|
-
|
-
|
-
|
10
|
1
|
311
|
-
|
-
|
-
|
-
|
312
|
||||||||||||||||||||||||
Exercised
stock options, issued restricted
|
||||||||||||||||||||||||||||||||||||
stock
and other
|
-
|
-
|
-
|
-
|
3
|
-
|
93
|
-
|
-
|
-
|
-
|
93
|
||||||||||||||||||||||||
Stock-based
compensation costs
|
-
|
-
|
-
|
-
|
-
|
-
|
28
|
-
|
-
|
-
|
-
|
28
|
||||||||||||||||||||||||
Tax
benefit for stock option exercises
|
-
|
-
|
-
|
-
|
-
|
-
|
24
|
-
|
-
|
-
|
-
|
24
|
||||||||||||||||||||||||
Tender
of shares for exercised stock options
|
||||||||||||||||||||||||||||||||||||
and
restricted stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
(53
|
)
|
(53
|
)
|
||||||||||||||||||||||
Shares
purchased
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
(100
|
)
|
(100
|
)
|
||||||||||||||||||||||
Cumulative
effect adjustment to initially
|
||||||||||||||||||||||||||||||||||||
apply
EITF 04-6
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(149
|
)
|
-
|
-
|
-
|
(149
|
)
|
||||||||||||||||||||||
Dividends
on common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(918
|
)
|
-
|
-
|
-
|
(918
|
)
|
||||||||||||||||||||||
Dividends
on preferred stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(61
|
)
|
-
|
-
|
-
|
(61
|
)
|
||||||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,457
|
-
|
-
|
-
|
1,457
|
||||||||||||||||||||||||
Other
comprehensive income (loss),
|
||||||||||||||||||||||||||||||||||||
net
of taxes:
|
||||||||||||||||||||||||||||||||||||
Change
in unrealized derivatives’ fair value
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(9
|
)
|
-
|
-
|
(9
|
)
|
||||||||||||||||||||||
Reclassification
to earnings
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
-
|
-
|
4
|
||||||||||||||||||||||||
Other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(5
|
)
|
-
|
-
|
(5
|
)
|
||||||||||||||||||||||
Total
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,452
|
||||||||||||||||||||||||
Adjustment
for adoption of SFAS No. 158
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(26
|
)
|
-
|
-
|
(26
|
)
|
||||||||||||||||||||||
Balance
at December 31, 2006
|
1
|
$
|
1,100
|
-
|
$
|
-
|
310
|
$
|
31
|
$
|
2,668
|
$
|
1,415
|
$
|
(20
|
)
|
113
|
$
|
(2,749
|
)
|
$
|
2,445
|
||||||||||||||
Convertible
Perpetual
|
Mandatory
Convertible
|
Common
Stock
|
||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Preferred
Stock
|
Common
Stock
|
Accumulated
|
Held
in Treasury
|
||||||||||||||||||||||||||||||||
Number
|
Number
|
Number
|
Capital
in
|
Other
|
Number
|
|||||||||||||||||||||||||||||||
of
|
At
Par
|
of
|
At
Par
|
of
|
At
Par
|
Excess
of
|
Retained
|
Comprehensive
|
of
|
At
|
Stockholders’
|
|||||||||||||||||||||||||
Shares
|
Value
|
Shares
|
Value
|
Shares
|
Value
|
Par
Value
|
Earnings
|
Income
(Loss)
|
Shares
|
Cost
|
Equity
|
|||||||||||||||||||||||||
(In
Millions)
|
||||||||||||||||||||||||||||||||||||
Balance
at December 31, 2006
|
1
|
$
|
1,100
|
-
|
$
|
-
|
310
|
$
|
31
|
$
|
2,668
|
$
|
1,415
|
$
|
(20
|
)
|
113
|
$
|
(2,749
|
)
|
$
|
2,445
|
||||||||||||||
Sale
of 6¾% Mandatory Convertible
|
||||||||||||||||||||||||||||||||||||
Preferred
Stock
|
-
|
-
|
29
|
2,875
|
-
|
-
|
(72
|
)
|
-
|
-
|
-
|
-
|
2,803
|
|||||||||||||||||||||||
Common
stock issued to acquire Phelps Dodge
|
-
|
-
|
-
|
-
|
137
|
14
|
7,767
|
-
|
-
|
-
|
-
|
7,781
|
||||||||||||||||||||||||
Sale
of common stock
|
-
|
-
|
-
|
-
|
47
|
5
|
2,811
|
-
|
-
|
-
|
-
|
2,816
|
||||||||||||||||||||||||
Conversions
of 7% Convertible Senior Notes
|
-
|
-
|
-
|
-
|
-
|
-
|
6
|
-
|
-
|
-
|
-
|
6
|
||||||||||||||||||||||||
Exercised
stock options, issued restricted
|
||||||||||||||||||||||||||||||||||||
stock
and other
|
-
|
-
|
-
|
-
|
3
|
-
|
131
|
-
|
-
|
-
|
-
|
131
|
||||||||||||||||||||||||
Stock-based
compensation costs
|
-
|
-
|
-
|
-
|
-
|
-
|
86
|
-
|
-
|
-
|
-
|
86
|
||||||||||||||||||||||||
Tax
benefit for stock option exercises
|
-
|
-
|
-
|
-
|
-
|
-
|
10
|
-
|
-
|
-
|
-
|
10
|
||||||||||||||||||||||||
Tender
of shares for exercised stock
|
||||||||||||||||||||||||||||||||||||
options
and restricted stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
(92
|
)
|
(92
|
)
|
||||||||||||||||||||||
Cumulative
effect adjustment to initially
|
||||||||||||||||||||||||||||||||||||
apply
FIN 48
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
-
|
-
|
-
|
4
|
||||||||||||||||||||||||
Dividends
on common stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(587
|
)
|
-
|
-
|
-
|
(587
|
)
|
||||||||||||||||||||||
Dividends
on preferred stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(208
|
)
|
-
|
-
|
-
|
(208
|
)
|
||||||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,977
|
-
|
-
|
-
|
2,977
|
||||||||||||||||||||||||
Other
comprehensive income (loss),
|
||||||||||||||||||||||||||||||||||||
net
of taxes:
|
||||||||||||||||||||||||||||||||||||
Unrealized
gain on securities
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
-
|
-
|
2
|
||||||||||||||||||||||||
Translation
adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3
|
)
|
-
|
-
|
(3
|
)
|
||||||||||||||||||||||
Change
in unrealized derivatives’ fair value
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3
|
)
|
-
|
-
|
(3
|
)
|
||||||||||||||||||||||
Reclassification
to earnings
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
7
|
-
|
-
|
7
|
||||||||||||||||||||||||
Defined
benefit pension plans:
|
||||||||||||||||||||||||||||||||||||
Net
gain during period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
53
|
-
|
-
|
53
|
||||||||||||||||||||||||
Amortization
of unrecognized amounts
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6
|
-
|
-
|
6
|
||||||||||||||||||||||||
Other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
62
|
-
|
-
|
62
|
||||||||||||||||||||||||
Total
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,039
|
||||||||||||||||||||||||
Balance
at December 31, 2007
|
1
|
$
|
1,100
|
29
|
$
|
2,875
|
497
|
$
|
50
|
$
|
13,407
|
$
|
3,601
|
$
|
42
|
114
|
$
|
(2,841
|
)
|
$
|
18,234
|
|||||||||||||||
Net
income applicable to common stock, as reported
|
$
|
935
|
|||||
Add: Stock-based
employee compensation expense
|
|||||||
included
in reported net income for stock option
|
|||||||
conversions,
SARs and restricted stock units,
|
|||||||
net
of taxes and minority interests
|
13
|
||||||
Deduct: Total
stock-based employee compensation
|
|||||||
expense
determined under fair value-based method
|
|||||||
for
all awards, net of taxes and minority interests
|
(26
|
)
|
|||||
Pro
forma net income applicable to common stock
|
$
|
922
|
|||||
Earnings
per share:
|
|||||||
Basic
– as reported
|
$
|
5.18
|
|||||
Basic
– pro forma
|
$
|
5.12
|
|||||
Diluted
– as reported
|
$
|
4.67
|
|||||
Diluted
– pro forma
|
$
|
4.64
|
|||||
Fair
value per stock option
|
$
|
13.97
|
||||
Risk-free
interest rate
|
3.9
|
%
|
||||
Expected
volatility rate
|
46
|
%
|
||||
Expected
life of options (in years)
|
6
|
|||||
Assumed
annual dividend
|
$
|
1.00
|
2007
|
2006
|
2005
|
||||||||
Income
from continuing operations
|
$
|
2,942
|
$
|
1,457
|
$
|
995
|
||||
Preferred
dividends
|
(208
|
)
|
(61
|
)
|
(60
|
)
|
||||
Income
from continuing operations applicable
|
||||||||||
to
common stock
|
2,734
|
1,396
|
935
|
|||||||
Plus
income impact of assumed conversion of:
|
||||||||||
6¾%
Mandatory Convertible Preferred Stock
|
147
|
–
|
–
|
|||||||
5½%
Convertible Perpetual Preferred Stock
|
61
|
61
|
60
|
|||||||
7%
Convertible Senior Notes
|
–
|
12
|
35
|
|||||||
Diluted
net income from continuing operations
|
||||||||||
applicable
to common stock
|
2,942
|
1,469
|
1,030
|
|||||||
Income
from discontinued operations
|
35
|
–
|
–
|
|||||||
Diluted
net income applicable to common shares
|
$
|
2,977
|
$
|
1,469
|
$
|
1,030
|
Weighted-average
common shares outstanding
|
341
|
191
|
180
|
|||||||
Add
shares issuable upon conversion, exercise
|
||||||||||
or
vesting of:
|
||||||||||
6¾%
Mandatory Convertible Preferred Stock
|
||||||||||
(see
Note 13)
|
30
|
–
|
–
|
|||||||
5½%
Convertible Perpetual Preferred Stock (see Note 13)
|
23
|
22
|
21
|
|||||||
7%
Convertible Senior Notes (see Note 11)
|
–
|
7
|
17
|
|||||||
Dilutive
stock options (see Note 13)
|
2
|
1
|
2
|
|||||||
Restricted
stock (see Note 13)
|
1
|
–
|
–
|
|||||||
Weighted-average
common shares outstanding for
|
||||||||||
purposes
of calculating diluted net income per share
|
397
|
221
|
220
|
|||||||
Diluted
net income per share of common stock:
|
||||||||||
Continuing
operations
|
$
|
7.41
|
$
|
6.63
|
$
|
4.67
|
||||
Discontinued
operations
|
0.09
|
–
|
–
|
|||||||
Diluted
net income per share of common stock
|
$
|
7.50
|
$
|
6.63
|
$
|
4.67
|
||||
Phelps
Dodge common stock outstanding and issuable at March 19, 2007 (in
millions)
|
204.3
|
||
Exchange
offer ratio per share of FCX common stock for each Phelps Dodge common
share
|
0.67
|
||
Shares
of FCX common stock issued (in millions)
|
136.9
|
||
Cash
consideration of $88.00 for each Phelps Dodge common share
|
$
|
17,979
|
a
|
Fair
value of FCX common stock issued
|
7,781
|
b
|
|
Transaction
and change of control costs and related employee benefits
|
136
|
||
Release
of FCX deferred tax asset valuation allowances
|
(92
|
)
c
|
|
Total
purchase price
|
$
|
25,804
|
|
a.
|
Cash
consideration includes cash paid in lieu of any fractional shares of FCX
stock.
|
b.
|
Measurement
of the common stock component of the purchase price was based on a
weighted average closing price of FCX’s common stock of $56.85 for the two
days prior to through two days after the public announcement of the merger
on November 19, 2006.
|
c.
|
FCX
determined that, as a result of the acquisition of Phelps Dodge, it will
be able to realize certain U.S. tax credits for which it had previously
not recognized any benefit. Recognition of these tax credits resulted in a
$92 million reduction to the purchase
price.
|
Phelps
|
Preliminary
|
||||||||
Dodge
|
Purchase
|
||||||||
Historical
|
Fair
Value
|
Price
|
|||||||
Balances
|
Adjustments
|
Allocation
|
|||||||
Cash
and cash equivalents
|
$
|
4.2
|
$
|
–
|
$
|
4.2
|
|||
Inventories,
including mill and leach stockpiles
|
0.9
|
2.8
|
3.7
|
||||||
Property,
plant and equipment
a
|
6.0
|
16.1
|
22.1
|
||||||
Other
assets
|
3.1
|
0.2
|
3.3
|
||||||
Allocation
to goodwill
b
|
–
|
6.3
|
6.3
|
c
|
|||||
Total
assets
|
14.2
|
25.4
|
39.6
|
||||||
Deferred
income taxes (current and long-term)
d
|
(0.7
|
)
|
(6.3
|
)
|
(7.0
|
)
|
|||
Other
liabilities
|
(4.1
|
)
|
(1.5
|
)
|
(5.6
|
)
|
|||
Minority
interests
|
(1.2
|
)
|
–
|
(1.2
|
)
|
||||
Total
|
$
|
8.2
|
$
|
17.6
|
$
|
25.8
|
|||
a.
|
Includes
amounts for proven and probable reserves and values of VBPP (see Note
1).
|
b.
|
None
of the $6.3 billion of goodwill is deductible for tax
purposes.
|
c.
|
Includes
$160 million of goodwill associated with Phelps Dodge International
Corporation (PDIC). PDIC was sold in the fourth quarter of 2007 (see
Note 4).
|
d.
|
Deferred
income taxes have been recognized based on the difference between the tax
basis and the estimated fair values assigned to net
assets.
|
·
|
The
combined company’s increased scale of operations, management depth and
strengthened cash flow provide an improved platform to capitalize on
growth opportunities in the global
market.
|
·
|
The
combined company is well positioned to benefit from the positive copper
market at a time when there is a scarcity of large-scale copper
development projects combined with strong global demand for
copper.
|
·
|
The
combined company has long-lived, geographically diverse reserves, totaling
93.2 billion pounds of copper, 41.0 million ounces of gold and 2.0 billion
pounds of molybdenum as of December 31, 2007 (see Note 19). Additionally,
the combined company has rights to significant mineralized material that
could add to reserves.
|
·
|
The
combined company has exploration rights with significant potential in
copper regions around the world.
|
Historical
|
||||||||||||
Phelps
|
Pro
Forma
|
Pro
Forma
|
||||||||||
FCX
|
Dodge
a
|
Adjustments
|
Consolidated
|
|||||||||
Year Ended December
31, 2007
|
||||||||||||
Revenues
|
$
|
16,939
|
$
|
2,294
|
$
|
–
|
$
|
19,233
|
b
|
|||
Operating
income
|
6,555
|
793
|
(105
|
)
|
7,243
|
b,c
|
||||||
Income
from continuing operations before
|
||||||||||||
income
taxes and minority interests
|
6,133
|
837
|
(173
|
)
|
6,797
|
b,c,d,e,f
|
||||||
Income
from continuing operations applicable
|
||||||||||||
to
common stock
|
2,734
|
493
|
(166
|
)
|
3,061
|
b,c,d,e,f
|
||||||
Diluted
income from continuing operations
|
||||||||||||
per
share of common stock
|
7.41
|
N/A
|
N/A
|
7.41
|
b,c,d,e,f
|
|||||||
Diluted
weighted average shares outstanding
|
397
|
N/A
|
N/A
|
448
|
h
|
|||||||
Year Ended December
31, 2006
|
||||||||||||
Revenues
|
$
|
5,791
|
$
|
10,742
|
$
|
120
|
$
|
16,653
|
b,g
|
|||
Operating
income
|
2,869
|
4,158
|
(2,077
|
)
|
4,950
|
b,c,g
|
||||||
Income
from continuing operations before
|
||||||||||||
income
taxes and minority interests
|
2,826
|
4,766
|
(2,847
|
)
|
4,745
|
b,c,e,g
|
||||||
Income
from continuing operations applicable
|
||||||||||||
to
common stock
|
1,396
|
3,000
|
(2,199
|
)
|
2,197
|
b,c,e,g
|
||||||
Diluted
income from continuing operations
|
||||||||||||
per
share of common stock
|
6.63
|
14.74
|
N/A
|
5.54
|
b,c,e,g
|
|||||||
Diluted
weighted average shares outstanding
|
221
|
204
|
N/A
|
445
|
h
|
|||||||
a.
|
For
the year ended December 31, 2007, represents the results of Phelps Dodge’s
operations from January 1, 2007, through March 19, 2007. Beginning March
20, 2007, the results of Phelps Dodge’s operations are included in FCX’s
consolidated financial information.
|
b.
|
Includes
charges to revenues for mark-to-market accounting adjustments on copper
price protection programs totaling $195 million ($119 million to net
income or $0.27 per share) for 2007 and $1.2 billion ($915 million to net
income or $2.06 per share) for 2006. Also includes credits for
amortization of acquired intangible liabilities totaling $120 million ($76
million to net income or $0.17 per share) in each
year.
|
c.
|
Includes
charges associated with the impacts of the increases in the carrying
values of acquired metal inventories (including mill and leach stockpiles)
and property, plant and equipment, and also includes the amortization of
intangible assets and liabilities resulting from the acquisition
totaling $1.6 billion ($1.0 billion to net income or $2.25 per share) for
2007 and $2.2 billion ($1.4 billion to net income or $3.13 per share) for
2006.
|
d.
|
Excludes
net losses on early extinguishment of debt totaling $88 million ($69
million to net income or $0.15 per share) for financing transactions
related to the acquisition of Phelps
Dodge.
|
e.
|
Includes
net interest expense associated with debt issued in connection with the
acquisition of Phelps Dodge totaling $580 million ($452 million to net
income or $1.01 per share) for 2007 and $775 million ($698 million to net
income or $1.57 per share) for
2006.
|
f.
|
Includes
gains primarily on the sales of marketable securities totaling $85 million
($52 million to net income or $0.12 per
share).
|
g.
|
Includes
charges to revenues totaling $82 million ($44 million to net income or
$0.10 per share) associated with the redemption of FCX’s Gold-Denominated
Preferred Stock, Series II and Silver-Denominated Preferred
Stock.
|
h.
|
Estimated
pro forma diluted weighted average shares outstanding for the years ended
December 31, 2007 and 2006, follow (in
millions):
|
2007
|
2006
|
|||||
Average
number of basic shares of FCX common stock
|
||||||
outstanding
prior to the acquisition of Phelps Dodge
|
198
|
191
|
||||
Shares
of FCX common stock issued in the acquisition
|
137
|
137
|
||||
Sale
of FCX shares
|
47
|
47
|
||||
Mandatory
Convertible Preferred Stock*
|
39
|
39
|
||||
Other
dilutive securities
|
27
|
31
|
||||
Pro
forma average number of common shares outstanding
|
448
|
445
|
||||
|
*
|
See
Note 13 for additional information.
|
Revenues
|
$
|
937
|
||
Operating
income
|
78
|
|||
Provision
for income taxes
|
(24
|
)
|
||
Income
from discontinued operations
|
35
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Mining
Operations:
|
|||||||
Raw
materials
|
$
|
1
|
$
|
–
|
|||
Work-in-process
|
71
|
11
|
|||||
Finished
goods
a
|
898
|
4
|
|||||
Atlantic
Copper:
|
|||||||
Raw
materials (concentrates)
|
164
|
189
|
|||||
Work-in-process
|
220
|
168
|
|||||
Finished
goods
|
6
|
12
|
|||||
Total
product inventories
|
1,360
|
384
|
|||||
Total
materials and supplies, net
b
|
818
|
340
|
|||||
Total
inventories
|
$
|
2,178
|
$
|
724
|
|||
a.
|
Primarily
includes concentrates and cathodes.
|
b.
|
Materials
and supplies inventory is net of obsolescence reserves totaling $16
million at both December 31, 2007, and December 31,
2006.
|
North
|
South
|
||||||||
America
|
America
|
Total
|
|||||||
Current:
|
|||||||||
Mill
stockpiles
|
$
|
–
|
$
|
6
|
$
|
66
|
|||
Leach
stockpiles
|
630
|
71
|
7011
|
||||||
Total
current mill and leach stockpiles
|
$
|
630
|
$
|
77
|
$
|
7077
|
|||
Long-term
a
:
|
|||||||||
Mill
stockpiles
|
$
|
–
|
$
|
248
|
$
|
2488
|
|||
Leach
stockpiles
|
685
|
173
|
8588
|
||||||
Total
long-term mill and leach stockpiles
|
$
|
685
|
$
|
421
|
$
|
1,1066
|
|||
a.
|
Materials
in stockpiles not expected to be recovered within the next 12
months.
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Proven
and probable reserves
|
$
|
13,797
|
$
|
–
|
|||
VBPP
|
2,103
|
–
|
|||||
Development
and other
|
2,516
|
1,538
|
|||||
Buildings
and infrastructure
|
2,300
|
1,501
|
|||||
Machinery
and equipment
|
6,023
|
2,261
|
|||||
Mobile
equipment
|
2,106
|
757
|
|||||
Construction
in progress
|
1,197
|
162
|
|||||
Property,
plant, equipment and development costs
|
30,042
|
6,219
|
|||||
Accumulated
depreciation, depletion and amortization
|
(4,327
|
)
|
(3,120
|
)
|
|||
Property,
plant, equipment and development costs, net
|
$
|
25,715
|
$
|
3,099
|
|||
At
January 1, 2007
|
$
|
–
|
||
Acquisition
of Phelps Dodge
|
6,265
|
|||
Additions
a
|
21
|
|||
Disposal
of PDIC (see Note 4)
|
(181
|
)
|
||
At
December 31, 2007
|
$
|
6,105
|
||
a.
|
In
2007, FCX acquired minority shareholders’ interests in several of its
subsidiaries, which were subsequently included in the sale of
PDIC.
|
Gross
|
Net
|
||||||||
Carrying
|
Accumulated
|
Book
|
|||||||
Value
|
Amortization
|
Value
|
|||||||
Water
rights
|
$
|
220
|
$
|
(1
|
)
|
$
|
2195
|
||
Power
contracts
|
169
|
(38
|
)
|
1311
|
|||||
Patents
and process technology
|
48
|
(2
|
)
|
466
|
|||||
Royalty
payments
|
39
|
(2
|
)
|
377
|
|||||
Tire
contracts
|
39
|
(4
|
)
|
355
|
|||||
Other
intangibles
|
4
|
–
|
44
|
||||||
Total
intangible assets
|
$
|
519
|
$
|
(47
|
)
|
$
|
4722
|
||
Treatment
and refining terms in
|
|||||||||
sales
contracts
|
$
|
(52
|
)
|
$
|
9
|
$
|
(433
|
)
|
|
Molybdenum
sales contracts
|
(115
|
)
|
111
|
(44
|
)
|
||||
Total
intangible liabilities
|
$
|
(167
|
)
|
$
|
120
|
$
|
(477
|
)
|
|
Global
reclamation and remediation
|
$
|
544
|
a
|
Rabbi
trust
|
23
|
||
Change
of control
|
21
|
||
Non-qualified
retirement benefits
|
18
|
||
Total
trust assets
|
$
|
606
|
a.
|
Includes
$106 million of legally restricted funds for AROs at the Chino, Tyrone and
Cobre mines (see Note 15).
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Accounts
payable
|
$
|
1,195
|
$
|
320
|
|||
Salaries,
wages and other compensation
|
278
|
80
|
|||||
Current
deferred tax liability
|
171
|
–
|
|||||
Accrued
interest
|
144
|
22
|
|||||
Community
development contributions
|
118
|
–
|
|||||
Pension,
postretirement, postemployment and other
|
|||||||
employee
benefits
a
|
108
|
8
|
|||||
Other
|
331
|
346
|
|||||
Total
accounts payable and accrued liabilities
|
$
|
2,345
|
$
|
776
|
|||
a.
|
See
Note 10 for long-term portion and Note 12 for further
discussion.
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Pension,
postretirement, postemployment and other
|
|||||||
employment
benefits and long-term incentive
|
|||||||
compensation
a
|
$
|
644
|
$
|
168
|
|||
Reserve
for uncertain tax benefits
|
115
|
–
|
|||||
Accrued
long-term tax liability
|
80
|
–
|
|||||
Atlantic
Copper contractual obligation to
|
|||||||
insurance
company (see Note 12)
|
72
|
70
|
|||||
Other
|
195
|
30
|
|||||
Total
other liabilities
|
$
|
1,106
|
$
|
268
|
|||
a.
|
See
Note 9 for short-term portion and Note 12 for further
discussion.
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Senior
Credit Facility
|
$
|
–
|
$
|
–
|
|||
Senior
Notes:
|
|||||||
8.375%
Senior Notes due 2017
|
3,500
|
–
|
|||||
8.25%
Senior Notes due 2015
|
1,500
|
–
|
|||||
Senior
floating rate notes due 2015
|
1,000
|
–
|
|||||
6⅞%
Senior Notes due 2014
|
340
|
340
|
|||||
9½%
Senior Notes due 2031
|
239
|
–
|
|||||
8¾%
Senior Notes due 2011
|
118
|
–
|
|||||
6⅛%
Senior Notes due 2034
|
115
|
–
|
|||||
7⅛%
Debentures due 2027
|
115
|
–
|
|||||
7%
Convertible Senior Notes due 2011
|
1
|
7
|
|||||
10⅛%
Senior Notes due 2010
|
–
|
273
|
|||||
Other
(including equipment capital leases and
|
|||||||
short-term
borrowings)
|
283
|
60
|
|||||
Total
debt
|
7,211
|
680
|
|||||
Less
current portion of long-term debt and
|
|||||||
short-term
borrowings
|
(31
|
)
|
(19
|
)
|
|||
Long-term
debt
|
$
|
7,180
|
$
|
661
|
|||
December
31,
|
|||||||
2007
|
2006
|
||||||
Projected
benefit obligation
|
$
|
230
|
$
|
187
|
|||
Accumulated
benefit obligation
|
259
|
166
|
|||||
Fair
value of plan assets
|
66
|
57
|
|||||
PT
Freeport
|
|||||||||||||||||||
FCX
|
Indonesia
|
Atlantic
Copper
|
|||||||||||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||
Change
in benefit obligation:
|
|||||||||||||||||||
Benefit
obligation at beginning of year
|
$
|
50
|
$
|
50
|
$
|
54
|
$
|
40
|
$
|
83
|
$
|
76
|
|||||||
Acquisition
of Phelps Dodge
|
1,370
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||
Service
cost
|
24
|
–
|
5
|
4
|
–
|
–
|
|||||||||||||
Interest
cost
|
62
|
2
|
5
|
5
|
5
|
5
|
|||||||||||||
Actuarial
(gains) losses
|
(78
|
)
|
–
|
7
|
5
|
–
|
–
|
||||||||||||
Divestitures
|
(5
|
)
|
–
|
–
|
–
|
–
|
–
|
||||||||||||
Foreign
exchange loss (gain)
|
2
|
–
|
(3
|
)
|
4
|
8
|
10
|
||||||||||||
Benefits
paid
|
(83
|
)
|
(2
|
)
|
(3
|
)
|
(4
|
)
|
(9
|
)
|
(8
|
)
|
|||||||
Benefit
obligation at end of year
|
|
1,342
|
|
50
|
65
|
54
|
|
87
|
|
83
|
|||||||||
Change
in plan assets:
|
|||||||||||||||||||
Fair
value of plan assets at
|
|||||||||||||||||||
beginning
of year
|
13
|
15
|
30
|
22
|
14
|
12
|
|||||||||||||
Acquisition
of Phelps Dodge
|
1,374
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||
Actual
return on plan assets
|
113
|
–
|
4
|
3
|
–
|
–
|
|||||||||||||
Employer
contributions
a
|
24
|
–
|
8
|
7
|
10
|
10
|
|||||||||||||
Foreign
exchange gain (loss)
|
1
|
–
|
(1
|
)
|
2
|
–
|
–
|
||||||||||||
Benefits
paid
|
(83
|
)
|
(2
|
)
|
(3
|
)
|
(4
|
)
|
(9
|
)
|
(8
|
)
|
|||||||
Fair
value of plan assets at end
|
|||||||||||||||||||
of
year
|
1,442
|
13
|
38
|
30
|
15
|
14
|
|||||||||||||
Funded
status
|
$
|
100
|
$
|
(37
|
)
|
$
|
(27
|
)
|
$
|
(24
|
)
|
$
|
(72
|
)
|
$
|
(69
|
)
|
||
Accumulated
benefit obligation
|
$
|
1,252
|
$
|
50
|
$
|
39
|
$
|
33
|
$
|
87
|
$
|
83
|
|||||||
Weighted-average
assumptions
|
|||||||||||||||||||
used
to determine benefit
|
|||||||||||||||||||
obligations
(percent):
|
|||||||||||||||||||
Discount
rate
|
6.30
|
b
|
4.00
|
c
|
10.25
|
10.50
|
6.77
|
6.77
|
|||||||||||
Rate
of compensation increase
|
4.25
|
b
|
N/A
|
c
|
8.00
|
9.00
|
N/A
|
N/A
|
|||||||||||
Balance
sheet classification of
|
||||||||||||||||||
funded
status:
|
||||||||||||||||||
Other
assets and deferred charges
|
$
|
195
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
||||||
Accounts
payable and
|
||||||||||||||||||
accrued
liabilities
|
(7
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
–
|
–
|
||||||||
Other
liabilities
|
(88
|
)
|
(36
|
)
|
(26
|
)
|
(23
|
)
|
(72
|
)
|
(69
|
)
|
||||||
Total
|
$
|
100
|
$
|
(37
|
)
|
$
|
(27
|
)
|
$
|
(24
|
)
|
$
|
(72
|
)
|
$
|
(69
|
)
|
|
a.
|
Employer
contributions for 2008 are expected to approximate $7 million for the FCX
plans, $10 million for the PT Freeport Indonesia plan (based on a December
31, 2007, exchange rate of 9,390 Indonesian rupiah to one U.S. dollar) and
$11 million for the Atlantic Copper plan (based on a December 31, 2007,
exchange rate of $1.47 per euro).
|
b.
|
As
discussed above, FCX and FM Services Company elected to terminate their
defined benefit pension plans and ceased accruing benefits on June 30,
2000. The discount rate shown only relates to the Phelps Dodge and the
excess benefit plans. The discount rate for the SERP plan was 4.0 percent.
The rate of compensation increase shown only relates to the Phelps Dodge
plans.
|
c.
|
The
assumptions shown only relate to the
SERP.
|
2007
|
2006
|
2005
|
|||||||
Weighted-average
assumptions:
|
|||||||||
Discount
rate
|
|||||||||
FCX
SERP
|
4.00
|
%
|
6.00
|
%
|
6.00
|
%
|
|||
Phelps
Dodge plans
|
5.78
|
%
|
N/A
|
N/A
|
|||||
Expected
return on plan assets
a
|
8.50
|
%
|
N/A
|
N/A
|
|||||
Rate
of compensation increase
a
|
4.25
|
%
|
N/A
|
N/A
|
|||||
Service
cost
|
$
|
24
|
$
|
–
|
$
|
1
|
|||
Interest
cost
|
62
|
2
|
3
|
||||||
Expected
return on plan assets
|
(90
|
)
|
–
|
(1
|
)
|
||||
Amortization
of prior service cost
|
4
|
4
|
4
|
||||||
Net
periodic benefit cost
|
$
|
–
|
$
|
6
|
$
|
7
|
|||
a.
|
The
assumptions shown only relate to the Phelps Dodge
plans.
|
PT
Freeport Indonesia
|
|||||||||
2007
|
2006
|
2005
|
|||||||
Weighted-average
assumptions:
|
|||||||||
Discount
rate
|
10.50
|
%
|
12.00
|
%
|
12.00
|
%
|
|||
Expected
return on plan assets
|
10.00
|
%
|
10.00
|
%
|
10.00
|
%
|
|||
Rate
of compensation increase
|
9.00
|
%
|
10.00
|
%
|
10.00
|
%
|
|||
Service
cost
|
$
|
5
|
$
|
4
|
$
|
3
|
|||
Interest
cost
|
5
|
5
|
3
|
||||||
Expected
return on plan assets
|
(3
|
)
|
(3
|
)
|
(1
|
)
|
|||
Amortization
of prior service cost
|
1
|
1
|
1
|
||||||
Amortization
of net actuarial loss
|
1
|
1
|
1
|
||||||
Net
periodic benefit cost
|
$
|
9
|
$
|
8
|
$
|
7
|
|||
Atlantic
Copper
|
|||||||||
2007
|
2006
|
2005
|
|||||||
Weighted-average
assumptions:
|
|||||||||
Discount
rate
|
6.77
|
%
|
6.77
|
%
|
6.77
|
%
|
|||
Expected
return on plan assets
|
–
|
–
|
–
|
||||||
Rate
of compensation increase
|
N/A
|
N/A
|
N/A
|
||||||
Interest
cost
|
$
|
5
|
$
|
5
|
$
|
5
|
|||
Amortization
of net actuarial loss
|
–
|
1
|
1
|
||||||
Net
periodic benefit cost
|
$
|
5
|
$
|
6
|
$
|
6
|
|||
FCX
|
PT
Freeport Indonesia
|
|||||||
2007
|
2006
|
2007
|
2006
|
|||||
Equity
securities
|
55
|
%
|
–
|
19
|
%
|
–
|
||
Fixed
income
|
35
|
100
|
%
|
74
|
100
|
%
|
||
Real
estate
|
7
|
–
|
–
|
–
|
||||
Other
|
3
|
–
|
7
|
–
|
||||
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
PT
Freeport
|
||||||
FCX
|
Indonesia
a
|
|||||
2008
|
$
|
79
|
$
|
2
|
||
2009
|
94
|
10
|
||||
2010
|
78
|
8
|
||||
2011
|
80
|
7
|
||||
2012
|
110
|
8
|
||||
2013
through 2017
|
461
|
50
|
||||
a.
|
Based
on a December 31, 2007, exchange rate of 9,390 Indonesian rupiah to one
U.S. dollar.
|
2007
|
2006
|
|||||
Change
in benefit obligation:
|
||||||
Benefit
obligation at beginning of year
|
$
|
4
|
$
|
5
|
||
Acquisition
of Phelps Dodge
|
255
|
–
|
||||
Service
cost
|
1
|
–
|
||||
Interest
cost
|
11
|
–
|
||||
Actuarial
losses (gains)
|
8
|
(1
|
)
|
|||
Benefits
paid, net of employee contributions
|
(23
|
)
|
–
|
|||
Benefit
obligation at end of year
|
256
|
4
|
||||
Change
in plan assets:
|
||||||
Fair
value of plan assets at beginning of year
|
–
|
–
|
||||
Acquisition
of Phelps Dodge
|
173
|
–
|
||||
Actual
return on plans assets
|
5
|
–
|
||||
Employer
contributions
a
|
2
|
–
|
||||
Benefits
paid
|
(30
|
)
|
–
|
|||
Fair
value of plan assets at end of year
|
150
|
–
|
||||
Funded
status
|
$
|
(106
|
)
|
$
|
(4
|
)
|
Discount
rate assumption (percent)
|
6.00
|
5.75
|
||||
Balance
sheet classification of funded status:
|
||||||
Accounts
payable and accrued liabilities
|
$
|
(2
|
)
|
$
|
–
|
|
Other
liabilities
|
(104
|
)
|
(4
|
)
|
||
Total
|
$
|
(106
|
)
|
$
|
(4
|
)
|
a.
|
Employer
contributions for 2008 are expected to approximate $2
million.
|
a.
|
The
assumptions shown only relate to the Phelps Dodge
plans.
|
2007
|
2006
|
|||||
Medical-care
cost trend rate assumed for
|
||||||
the
next year
|
9
|
%
|
10
|
%
|
||
Rate
to which the cost trend rate is assumed
|
||||||
to
decline (the ultimate trend rate)
|
5
|
%
|
5
|
%
|
||
Year
that the rate reaches the ultimate trend rate
|
2012
|
2011
|
||||
2007
|
2006
|
2005
|
||||||||
Stock
options awarded to employees (including directors)
|
$
|
71
|
$
|
28
|
$
|
2
|
||||
Stock
options awarded to nonemployees
|
5
|
3
|
1
|
|||||||
Restricted
stock units in lieu of cash awards
|
67
|
23
|
18
|
|||||||
Restricted
stock awards to employees
|
6
|
–
|
–
|
|||||||
Restricted
stock units awarded to directors
|
3
|
1
|
–
|
|||||||
Stock
appreciation rights
|
7
|
1
|
2
|
|||||||
Total
stock-based compensation cost
a
|
159
|
56
|
23
|
|||||||
Tax
benefit
|
(62
|
)
|
(20
|
)
|
(7
|
)
|
||||
Minority
interest share
|
(4
|
)
|
(3
|
)
|
(1
|
)
|
||||
Impact
on net income
|
$
|
93
|
$
|
33
|
$
|
15
|
||||
a.
|
Amounts
are before Rio Tinto’s share of the cost of employee exercises of
in-the-money stock options, which decreased consolidated selling, general
and administrative expenses by $4 million in 2007, $7 million in 2006 and
$9 million in 2005.
|
Weighted
|
||||||||||
Average
|
||||||||||
Weighted
|
Remaining
|
Aggregate
|
||||||||
Number
of
|
Average
|
Contractual
|
Intrinsic
|
|||||||
Options
|
Option
Price
|
Term
(years)
|
Value
|
|||||||
Balance
at January 1
|
5,801,716
|
$
|
39.70
|
|||||||
Granted
|
6,641,500
|
69.89
|
||||||||
Conversion
of Phelps Dodge options
|
806,595
|
28.38
|
||||||||
Exercised
|
(2,276,391
|
)
|
34.45
|
|||||||
Expired/Forfeited
|
(213,622
|
)
|
59.29
|
|||||||
Balance
at December 31
|
10,759,798
|
58.17
|
8.4
|
$
|
476
|
|||||
Vested
and exercisable at December 31
|
1,008,152
|
29.57
|
5.8
|
$
|
73
|
|||||
2006
|
2005
|
||||||||||
Weighted
|
Weighted
|
||||||||||
Number
|
Average
|
Number
|
Average
|
||||||||
of
|
Option
|
of
|
Option
|
||||||||
Options
|
Price
|
Options
|
Price
|
||||||||
Balance
at January 1
|
7,355,612
|
$
|
31.43
|
6,866,805
|
$
|
23.20
|
|||||
Granted
|
1,126,250
|
62.88
|
4,490,750
|
37.03
|
|||||||
Exercised
|
(2,614,273
|
)
|
26.51
|
(3,838,554
|
)
|
23.24
|
|||||
Expired/Forfeited
|
(65,873
|
)
|
39.12
|
(163,389
|
)
|
31.51
|
|||||
Balance
at December 31
|
5,801,716
|
39.70
|
7,355,612
|
31.43
|
|||||||
2007
|
2006
|
|||||
Expected
volatility
|
37.3
|
%
|
37.7
|
%
|
||
Expected
life of options (in years)
|
4.25
|
4.0
|
||||
Expected
dividend rate
|
2.2
|
%
|
2.9
|
%
|
||
Risk-free
interest rate
|
4.6
|
%
|
4.4
|
%
|
2007
|
2006
|
|||||
FCX
shares tendered to pay the exercise price
|
||||||
and/or
the minimum required taxes
a
|
1,389,845
|
809,926
|
||||
Cash
received from stock option exercises
|
$
|
54
|
$
|
37
|
||
Actual
tax benefit realized for tax deductions
|
138
|
31
|
||||
Amounts
FCX paid for employee taxes
|
68
|
22
|
||||
Amounts
FCX paid for exercised SARs
|
5
|
2
|
||||
a.
|
Under
terms of the related plans, upon exercise of stock options and vesting of
restricted stock units and restricted stock awards, employees may tender
FCX shares to FCX to pay the exercise price and/or the minimum required
taxes.
|
Weighted
|
|||||||
Average
|
|||||||
Number
of
|
Remaining
|
Aggregate
|
|||||
Restricted
|
Contractual
|
Intrinsic
|
|||||
Stock
Units
|
Term
(years)
|
Value
|
|||||
Balance
at January 1
|
531,573
|
||||||
Granted
|
491,901
|
||||||
Vested
|
(227,101
|
)
|
|||||
Forfeited
|
–
|
||||||
Balance
at December 31
|
796,373
|
1.7
|
$
|
82
|
|||
Acquisition
of Phelps Dodge on March 19, 2007
|
87,391
|
||
Vested
|
(35,623
|
)
|
|
Forfeited
|
(2,527
|
)
|
|
Outstanding
at December 31, 2007
|
49,241
|
||
2007
|
2006
|
2005
|
||||||||
United
States
|
$
|
980
|
$
|
25
|
$
|
(134
|
)
|
|||
Foreign
|
5,153
|
2,801
|
2,171
|
|||||||
Total
|
$
|
6,133
|
$
|
2,826
|
$
|
2,037
|
||||
2007
|
2006
|
2005
|
||||||||
Current
income taxes:
|
||||||||||
Federal
|
$
|
458
|
$
|
–
|
$
|
2
|
||||
State
|
72
|
–
|
–
|
|||||||
Foreign
|
1,942
|
1,035
|
831
|
|||||||
Total
current
|
2,472
|
1,035
|
833
|
|||||||
Deferred
income taxes (benefits):
|
||||||||||
Federal
|
(295
|
)
|
–
|
–
|
||||||
State
|
(20
|
)
|
–
|
–
|
||||||
Foreign
|
243
|
166
|
82
|
|||||||
Total
deferred
|
(72
|
)
|
166
|
82
|
||||||
Provision
for income taxes
|
$
|
2,400
|
$
|
1,201
|
$
|
915
|
||||
2007
|
2006
|
2005
|
||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||
U.S.
federal statutory tax rate
|
$
|
2,147
|
35
|
%
|
$
|
989
|
35
|
%
|
$
|
713
|
35
|
%
|
||||
Foreign
withholding tax
|
371
|
6
|
168
|
6
|
135
|
7
|
||||||||||
Foreign
tax credit limitation
|
125
|
2
|
–
|
–
|
–
|
–
|
||||||||||
Reversal
of APB Opinion No. 23
|
||||||||||||||||
assertion
|
111
|
2
|
–
|
–
|
–
|
–
|
||||||||||
Percentage
depletion
|
(284
|
)
|
(5
|
)
|
–
|
–
|
–
|
–
|
||||||||
International
tax rate differential
|
(184
|
)
|
(3
|
)
|
48
|
2
|
37
|
2
|
||||||||
Other
items, net
|
114
|
2
|
(4
|
)
|
–
|
30
|
1
|
|||||||||
Provision
for income taxes
|
$
|
2,400
|
39
|
%
|
$
|
1,201
|
43
|
%
|
$
|
915
|
45
|
%
|
||||
December
31,
|
|||||||
2007
|
2006
|
||||||
Deferred
tax assets:
|
|||||||
Foreign
tax credits
|
$
|
1,004
|
$
|
745
|
|||
Net
operating loss carryforwards
|
164
|
90
|
|||||
Minimum
tax credits
|
323
|
90
|
|||||
Accrued
expenses
|
812
|
–
|
|||||
Intercompany
profit elimination
|
65
|
71
|
|||||
Deferred
compensation
|
45
|
43
|
|||||
Postretirement
benefits
|
35
|
–
|
|||||
Other
|
77
|
–
|
|||||
Deferred
tax assets
|
2,525
|
1,039
|
|||||
Valuation
allowances
|
(1,165
|
)
|
(925
|
)
|
|||
Net
deferred tax assets
|
1,360
|
114
|
Deferred
tax liabilities:
|
|||||||
Property,
plant, equipment and development costs
|
(7,441
|
)
|
(723
|
)
|
|||
Undistributed
earnings
|
(603
|
)
|
(184
|
)
|
|||
Inventory
|
(458
|
)
|
–
|
||||
Employee
benefit plans
|
(75
|
)
|
–
|
||||
Other
|
(142
|
)
|
(7
|
)
|
|||
Total
deferred tax liabilities
|
(8,719
|
)
|
(914
|
)
|
|||
Net
deferred tax liabilities
|
$
|
(7,359
|
)
|
$
|
(800
|
)
|
|
Unrecognized
|
||||||||||
Tax
Benefits
|
Interest
|
Penalties
|
||||||||
Balance
at January 1, 2007
|
$
|
41
|
$
|
11
|
$
|
–
|
||||
Additions:
|
||||||||||
Acquisition
of Phelps Dodge
|
169
|
7
|
2
|
|||||||
Prior
year tax positions
|
9
|
*
|
*
|
|||||||
Current
year tax positions
|
38
|
*
|
*
|
|||||||
Associated
with interest and penalties
|
–
|
6
|
–
|
|||||||
Decreases:
|
||||||||||
Prior
year tax positions
|
(53
|
)
|
*
|
*
|
||||||
Lapse
of statue of limitations
|
(2
|
)
|
*
|
*
|
||||||
Associated
with interest and penalties
|
–
|
(5
|
)
|
(2
|
)
|
|||||
Balance
at December 31, 2007
|
$
|
202
|
$
|
19
|
$
|
–
|
Balance
at beginning of year
|
$
|
–
|
|
Liabilities
assumed in the acquisition of Phelps Dodge
|
1,334
|
||
Additions | 6 | ||
Reductions
|
(1
|
)
|
|
Spending
|
(71
|
)
|
|
Balance
at end of year
|
1,268
|
||
Less
current portion
|
(166
|
)
|
|
Long-term
portion
|
$
|
1,102
|
|
2007
|
2006
|
2005
|
||||||||
Balance
at beginning of year
|
$
|
30
|
$
|
27
|
$
|
23
|
||||
Liabilities
assumed in the acquisition of Phelps Dodge
|
531
|
a
|
–
|
–
|
||||||
Liabilities
incurred
|
1
|
–
|
2
|
|||||||
Revisions
to cash flow estimates
|
179
|
–
|
(1
|
)
|
||||||
Accretion
expense
|
27
|
3
|
3
|
|||||||
Spending
|
(40
|
)
|
–
|
–
|
||||||
Balance
at end of year
|
728
|
30
|
27
|
|||||||
Less
current portion
|
(97
|
)
|
–
|
–
|
||||||
Long-term
portion
|
$
|
631
|
$
|
30
|
$
|
27
|
||||
a.
|
The
fair value of AROs assumed in the acquisition of Phelps Dodge was
estimated based on projected cash flows, an estimated long-term annual
inflation rate of 2.4 percent, a discount rate based on FCX’s estimated
credit-adjusted, risk-free interest rate of 7.8 percent and a market risk
premium of 10 percent to reflect what a third-party might require to
assume these AROs.
|
2008
|
$
|
26
|
|
2009
|
25
|
||
2010
|
20
|
||
2011
|
16
|
||
2012
|
14
|
||
After
2012
|
2
|
||
Total
payments
|
$
|
103
|
|
2007
|
2006
|
2005
|
|||||||
Rent
expense
|
$
|
54
|
$
|
10
|
$
|
9
|
|||
Royalty
expense
|
2
|
–
|
–
|
||||||
$
|
56
|
$
|
10
|
$
|
9
|
||||
2007
|
2006
|
2005
|
||||||||
Commodity
contracts:
|
||||||||||
Phelps
Dodge’s zero-premium copper collars
a
|
$
|
(175
|
)
|
$
|
–
|
$
|
–
|
|||
Embedded
derivatives in provisional sales contracts
a
|
115
|
158
|
176
|
|||||||
Forward
copper contracts
b
|
(44
|
)
|
47
|
29
|
||||||
Copper
futures and swap contracts
b
|
(38
|
)
|
–
|
–
|
||||||
Gold-Denominated
Preferred Stock, Series II
a
|
–
|
(69
|
)
|
–
|
||||||
Silver-Denominated
Preferred Stock
a
|
–
|
(13
|
)
|
(5
|
)
|
|||||
Foreign
currency exchange contracts
b
|
–
|
7
|
1
|
a.
|
Amounts
recorded in revenues.
|
b.
|
Amounts
recorded in cost of sales.
|
2007
|
2006
|
|||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||
Commodity
contracts:
|
||||||||||||
Phelps
Dodge’s zero-premium copper
|
||||||||||||
collars
in net liability position
|
$
|
(598
|
)
|
$
|
(598
|
)
|
$
|
–
|
$
|
–
|
||
Embedded
derivatives in provisional sales
|
||||||||||||
contracts
in net liability position
|
(136
|
)
|
(136
|
)
|
(127
|
)
|
(127
|
)
|
||||
Copper
forward contracts in net liability
|
||||||||||||
position
|
(4
|
)
|
(4
|
)
|
(5
|
)
|
(5
|
)
|
||||
Copper
futures and swap contracts in net
|
||||||||||||
liability
position
|
(9
|
)
|
(9
|
)
|
–
|
–
|
||||||
Long-term
debt (including amounts due within one year)
|
(7,211
|
)
|
(7,595
|
)
|
(680
|
)
|
(710
|
)
|
||||
2007
|
2006
|
2005
|
|||||||
Refined
copper products
|
$
|
8,918
|
$
|
1,865
|
$
|
1,128
|
|||
Copper
in concentrates
a
|
4,541
|
2,721
|
1,868
|
||||||
Molybdenum
|
1,703
|
–
|
–
|
||||||
Gold
|
1,664
|
1,155
|
1,247
|
||||||
Other
b
|
113
|
50
|
(64
|
)
|
|||||
Total
|
$
|
16,939
|
$
|
5,791
|
$
|
4,179
|
|||
a.
|
Amounts
are net of treatment and refining charges totaling $502 million for 2007,
$388 million for 2006 and $277 million for
2005.
|
b.
|
Amounts
are net of royalty charges totaling $133 million in 2007, $126 million in
2006 and $104 million in 2005. Also includes $(41) million in 2007, $139
million in 2006 and $9 million in 2005 for adjustments to prior year sales
and pre-acquisition sales in 2007 subject to final
pricing.
|
2007
|
2006
|
2005
|
|||||||
Revenues
a
:
|
|||||||||
United
States
|
$
|
6,480
|
$
|
76
|
$
|
95
|
|||
Japan
|
2,479
|
1,242
|
805
|
||||||
Indonesia
|
2,105
|
1,202
|
1,008
|
||||||
Spain
|
1,773
|
1,380
|
783
|
||||||
United
Kingdom
|
661
|
126
|
72
|
||||||
Chile
|
627
|
–
|
–
|
||||||
China
|
400
|
120
|
41
|
||||||
Mexico
|
356
|
133
|
–
|
||||||
India
|
319
|
387
|
241
|
||||||
Philippines
|
314
|
86
|
137
|
||||||
Korea
|
266
|
377
|
289
|
||||||
Others
|
1,159
|
662
|
708
|
||||||
Total
|
$
|
16,939
|
$
|
5,791
|
$
|
4,179
|
|||
Long-lived
assets
b
:
|
|||||||||
United
States
|
$
|
16,954
|
$
|
41
|
$
|
53
|
|||
Peru | 3,242 | – | – | ||||||
Indonesia
|
3,126
|
2,933
|
3,191
|
||||||
Chile
|
2,882
|
–
|
–
|
||||||
Africa
|
1,506
|
–
|
–
|
||||||
Spain
|
274
|
265
|
284
|
||||||
Others
|
84
|
–
|
–
|
||||||
Total
|
$
|
28,068
|
$
|
3,239
|
$
|
3,528
|
|||
a.
|
Revenues
are attributed to countries based on the location of the
customer.
|
b.
|
Long-lived
assets exclude deferred tax assets, goodwill and intangible
assets.
|
North
America
|
South
America
|
Indonesia
|
||||||||||||||||||||||||||||||||||
Other
|
Total
|
Other
|
Total
|
Atlantic
|
Corporate,
|
|||||||||||||||||||||||||||||||
North
|
North
|
South
|
South
|
Copper
|
Other
&
|
|||||||||||||||||||||||||||||||
Rod
&
|
Molyb-
|
American
|
American
|
Cerro
|
American
|
American
|
Smelting
|
Elimi-
|
FCX
|
|||||||||||||||||||||||||||
Year
Ended December 31, 2007
|
Morenci
|
Refining
|
denum
|
Mining
|
Mining
|
Verde
|
Mining
|
Mining
|
Grasberg
|
&
Refining
|
nations
|
Total
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||||||||||||||
Unaffiliated
customers
b
|
$
|
68
|
$
|
5,108
|
$
|
1,746
|
$
|
1,719
|
$
|
8,641
|
$
|
744
|
$
|
1,521
|
$
|
2,265
|
$
|
3,640
|
a
|
$
|
2,388
|
$
|
5
|
$
|
16,939
|
|||||||||||
Intersegment
|
1,709
|
32
|
–
|
(1,732
|
)
|
9
|
855
|
725
|
1,580
|
1,168
|
–
|
(2,757
|
)
|
–
|
||||||||||||||||||||||
Production
and delivery
b
|
991
|
5,119
|
1,287
|
(1,105
|
)
|
6,292
|
483
|
795
|
1,278
|
1,388
|
2,329
|
(2,760
|
)
|
8,527
|
||||||||||||||||||||||
Depreciation,
depletion and amortization
b
|
239
|
7
|
94
|
271
|
611
|
129
|
248
|
377
|
199
|
36
|
23
|
1,246
|
||||||||||||||||||||||||
Exploration
and research expenses
|
–
|
–
|
2
|
8
|
10
|
–
|
–
|
–
|
–
|
–
|
135
|
145
|
||||||||||||||||||||||||
Selling,
general and administrative expenses
|
–
|
–
|
10
|
10
|
20
|
–
|
–
|
–
|
188
|
20
|
238
|
466
|
||||||||||||||||||||||||
Operating
income
b
|
547
|
14
|
353
|
|
803
|
1,717
|
987
|
1,203
|
2,190
|
3,033
|
3
|
(388
|
)
|
6,555
|
||||||||||||||||||||||
Interest
expense, net
|
–
|
4
|
–
|
–
|
4
|
9
|
(2
|
)
|
7
|
12
|
26
|
464
|
513
|
|||||||||||||||||||||||
Provision
for income taxes
|
–
|
–
|
–
|
–
|
–
|
485
|
368
|
853
|
1,326
|
–
|
221
|
2,400
|
||||||||||||||||||||||||
Total
assets at December 31, 2007
|
5,015
|
438
|
3,522
|
10,272
|
19,247
|
4,224
|
4,195
|
8,419
|
3,737
|
915
|
8,343
|
40,661
|
||||||||||||||||||||||||
Capital
expenditures
|
268
|
8
|
45
|
599
|
920
|
58
|
65
|
123
|
368
|
42
|
302
|
1,755
|
||||||||||||||||||||||||
Year
Ended December 31, 2006
|
||||||||||||||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||||||||||||||
Unaffiliated
customers
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
3,543
|
a
|
2,242
|
6
|
5,791
|
|||||||||||||||||||||||
Intersegment
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
852
|
–
|
(852
|
)
|
–
|
|||||||||||||||||||||||
Production
and delivery
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
1,279
|
2,119
|
(873
|
)
|
2,525
|
|||||||||||||||||||||||
Depreciation
and amortization
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
184
|
33
|
11
|
228
|
||||||||||||||||||||||||
Exploration
expenses
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
12
|
12
|
||||||||||||||||||||||||
Selling,
general and administrative expenses
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
211
|
16
|
(70
|
)
|
157
|
|||||||||||||||||||||||
Operating
income
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
2,721
|
74
|
74
|
2,869
|
||||||||||||||||||||||||
Interest
expense, net
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
20
|
25
|
31
|
76
|
||||||||||||||||||||||||
Provision
for income taxes
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
950
|
–
|
251
|
1,201
|
||||||||||||||||||||||||
Total
assets at December 31, 2006
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
4,112
|
915
|
363
|
5,390
|
||||||||||||||||||||||||
Capital
expenditures
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
234
|
17
|
–
|
251
|
||||||||||||||||||||||||
Year
Ended December 31, 2005
|
||||||||||||||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||||||||||||||
Unaffiliated
customers
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
2,810
|
a
|
1,363
|
6
|
4,179
|
|||||||||||||||||||||||
Intersegment
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
758
|
–
|
(758
|
)
|
–
|
|||||||||||||||||||||||
Production
and delivery
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
954
|
1,288
|
(604
|
)
|
1,638
|
|||||||||||||||||||||||
Depreciation
and amortization
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
210
|
29
|
12
|
251
|
||||||||||||||||||||||||
Exploration
expenses
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
9
|
9
|
||||||||||||||||||||||||
Selling,
general and administrative expenses
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
147
|
11
|
(54
|
)
|
104
|
|||||||||||||||||||||||
Operating
income
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
2,257
|
35
|
(115
|
)
|
2,177
|
|||||||||||||||||||||||
Interest
expense, net
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
22
|
17
|
93
|
132
|
||||||||||||||||||||||||
Provision
for income taxes
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
781
|
–
|
134
|
915
|
||||||||||||||||||||||||
Total
assets at December 31, 2005
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
4,618
|
933
|
(1
|
)
|
5,550
|
|||||||||||||||||||||||
Capital
expenditures
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
129
|
10
|
4
|
143
|
a.
|
Includes
PT Freeport Indonesia’s sales to PT Smelting totaling $1.8 billion in
2007, $1.2 billion in 2006 and $1.0 billion in
2005.
|
b.
|
The
following table summarizes the impact of purchase accounting fair value
adjustments on 2007 operating income primarily associated with the impacts
of the increases in the carrying values of Phelps Dodge’s metals
inventories (including mill and leach stockpiles) and property, plant and
equipment, and also includes the impact associated with the amortization
of intangible assets and liabilities resulting from the
acquisition:
|
Revenues
|
$
|
–
|
$
|
–
|
$
|
111
|
$
|
–
|
$
|
111
|
$
|
8
|
$
|
1
|
$
|
9
|
N/A
|
N/A
|
$
|
–
|
$
|
120
|
||||||||||||
Production
and delivery
|
(218
|
)
|
–
|
(164
|
)
|
(230
|
)
|
(612
|
)
|
(73
|
)
|
(96
|
)
|
(169
|
)
|
N/A
|
N/A
|
–
|
(781
|
)
|
||||||||||||||
Depreciation,
depletion and amortization
|
(167
|
)
|
–
|
(52
|
)
|
(165
|
)
|
(384
|
)
|
(64
|
)
|
(145
|
)
|
(209
|
)
|
N/A
|
N/A
|
(2
|
)
|
(595
|
)
|
|||||||||||||
Reduction
of operating income
|
$
|
(385
|
)
|
$
|
–
|
$
|
(105
|
)
|
$
|
(395
|
)
|
$
|
(885
|
)
|
$
|
(129
|
)
|
$
|
(240
|
)
|
$
|
(369
|
)
|
N/A
|
N/A
|
$
|
(2
|
)
|
$
|
(1,256
|
)
|
|||
Recoverable
Proven and Probable Reserves
|
||||||
at
December 31, 2007
|
||||||
Copper
|
Gold
|
Molybdenum
|
||||
(Billions
of Lbs.)
|
(Millions
of Ozs.)
|
(Billions
of Lbs.)
|
||||
North
America
|
25.8
|
0.2
|
1.8
|
|||
South
America
|
26.0
|
1.4
|
0.2
|
|||
Indonesia
|
37.1
|
39.4
|
–
|
|||
Africa
|
4.3
|
–
|
–
|
|||
Consolidated
basis
a
|
93.2
|
41.0
|
2.0
|
|||
Net
equity interest
b
|
77.0
|
37.0
|
1.9
|
a.
|
Consolidated
basis reserves represents estimated metal quantities after reduction for
joint venture partner interests at the Morenci mine in North America and
the Grasberg mining complex in
Indonesia.
|
b.
|
Net
equity interest represents FCX’s net ownership interest (
i.e.
, estimated
consolidated reserves further reduced for minority
interests).
|
a.
|
Ounces
are not shown because of rounding.
|
b.
|
Deep
Ore Zone (DOZ) and Ertsberg Stockwork Zone
(ESZ)
|
c.
|
Mill
Level Zone (MLZ) and Deep Mill Level Zone
(DMLZ)
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
Quarter
a
|
Quarter
a
|
Quarter
|
Quarter
|
Year
|
|||||||||||
2007
|
|||||||||||||||
Revenues
b
|
$
|
2,246
|
$
|
5,443
|
$
|
5,066
|
$
|
4,184
|
$
|
16,939
|
|||||
Operating
income
b,
c
|
1,172
|
2,354
|
1,877
|
1,152
|
6,555
|
||||||||||
Income
from continuing operations applicable to common stock
b, c,
d
|
472
|
1,076
|
763
|
423
|
2,734
|
||||||||||
Income
(loss) from discontinued operations
c
|
4
|
28
|
12
|
(9
|
)
|
35
|
|||||||||
Net
income applicable to common stock
b, c,
d
|
476
|
1,104
|
775
|
414
|
2,769
|
||||||||||
Basic
net income (loss) per share of common stock:
|
|||||||||||||||
Continuing
operations
|
$
|
2.18
|
$
|
2.83
|
$
|
2.00
|
$
|
1.10
|
$
|
8.02
|
|||||
Discontinued
operations
|
0.02
|
0.07
|
0.03
|
(0.02
|
)
|
0.10
|
|||||||||
Basic
net income per share of common stock
|
$
|
2.20
|
$
|
2.90
|
$
|
2.03
|
$
|
1.08
|
$
|
8.12
|
|||||
Diluted
net income (loss) per share of common stock:
|
|||||||||||||||
Continuing
operations
b, c,
d
|
$
|
2.00
|
$
|
2.56
|
$
|
1.85
|
$
|
1.07
|
$
|
7.41
|
|||||
Discontinued
operations
c
|
0.02
|
0.06
|
0.02
|
(0.02
|
)
|
0.09
|
|||||||||
Diluted
net income per share of common stock
b, c,
d
|
$
|
2.02
|
$
|
2.62
|
$
|
1.87
|
$
|
1.05
|
$
|
7.50
|
|||||
2006
|
|||||||||||||||
Revenues
e
|
$
|
1,086
|
$
|
1,426
|
$
|
1,636
|
$
|
1,643
|
$
|
5,791
|
|||||
Operating
income
e,
f
|
532
|
739
|
735
|
863
|
2,869
|
||||||||||
Net
income applicable to common stock
e, f,
g
|
252
|
367
|
351
|
426
|
1,396
|
||||||||||
Basic
net income per share of common stock
|
1.34
|
1.95
|
1.85
|
2.17
|
7.32
|
||||||||||
Diluted
net income per share of common stock
e, f,
g
|
1.23
|
1.74
|
1.67
|
1.99
|
6.63
|
||||||||||
a.
|
As
a result of the sale of PDIC, results for the first and second quarters of
2007 have been restated to remove PDIC from continuing
operations.
|
b.
|
Includes
charges (credits) to revenues for mark-to-market accounting adjustments
for the 2007 copper price protection program totaling $38 million ($23
million to net income or $0.10 per share) in the first quarter, $130
million ($80 million to net income or $0.18 per share) in the
second quarter, $44 million ($26 million to net income or $0.06 per
share) in the third quarter, $(37) million ($(23) million to net
income or $0.06 per share) in the fourth quarter and $175
million ($106 million to net income or $0.27 per share) for the
year.
|
c.
|
Includes
the purchase accounting impact of the increases in the carrying values of
acquired metals inventories (including mill and leach stockpiles) and
property, plant and equipment, and also includes the impact
associated with the amortization of intangible assets and liabilities
resulting from the acquisition of Phelps Dodge totaling $124 million
($79 million to net income or $0.32 per share) in the first quarter, $455
million ($284 million or $0.64 per share) in the second quarter, $445
million ($279 million to net income or $0.62 per share) in the third
quarter, $232 million ($143 million to net income or $0.35 per share) in
the fourth quarter and $1.3 billion ($785 million to net income or $1.98
per share) for the year associated with continuing operations. Also
includes purchase accounting impact totaling $8 million ($0.02 per share)
in the third quarter associated with discontinued
operations.
|
d.
|
Includes
net losses on early extinguishment of debt totaling $88 million ($75
million to net income or $0.31 per share) in the first quarter, $47
million ($35 million to net income or $0.08 per share) in the second
quarter, $36 million ($31 million to net income or $0.07 per share) in the
third quarter and $173 million ($132 million to net income or $0.33 per
share) for the year. Also includes gains primarily from the
|
|
sales of marketable securities totaling $38 million ($23 million to net income or $0.05 per share) in the second quarter, $47 million ($29 million to net income or $0.06 per share) in the third quarter and $85 million ($52 million to net income or $0.13 per share) for the year. |
e.
|
Includes
a loss on redemption of FCX’s Gold-Denominated Preferred Stock, Series II
totaling $69 million ($37 million to net income or $0.17 per share) in the
first quarter, a loss on redemption of FCX’s Silver-Denominated Preferred
Stock totaling $13 million ($7 million to net income or $0.03 per share)
in the third quarter and $82 million ($44 million to net income or
$0.20 per share) for the year.
|
f.
|
Includes
net gains from the disposition of land and certain royalty rights owned by
Atlantic Copper totaling $9 million ($0.04 per share) in the second
quarter, $21 million ($0.10 per share) in the third quarter and $30
million ($0.13 per share) for the
year.
|
g.
|
Includes
net losses on early extinguishment and conversion of debt totaling $29
million ($0.13 per share) in the third quarter and $30 million ($0.14 per
share) for the year.
|
Plan
Category
|
Number
of Securities to be Issued upon Exercise of Outstanding Options, Warrants
and Rights
(a)
|
Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights
(b)
|
Number
of Securities Remaining Available for Future Issuance under Equity
Compensation Plans (Excluding Securities Reflected in
Column
(a))
(c)
|
|||
Equity
compensation plans approved by security holders
|
11,556,171(1)
|
$58.17
|
31,763,940(2)
|
|||
Equity
compensation plans not approved by security holders
|
—
|
—
|
—
|
|||
Total
|
11,556,171(1)
|
$58.17
|
31,763,940(2)
|
(1)
|
The
number of securities to be issued upon the exercise of outstanding
options, warrants and rights includes shares issuable upon (a) the vesting
of 784,873
restricted stock
units, and (b) the termination of deferrals with respect to 11,500
restricted stock units that were vested as of December 31,
2007. These awards are not reflected in column (b) as they do
not have an exercise price.
|
(2)
|
As
of December 31, 2007, there were 31,338,375 shares remaining available for
future issuance under the 2006 Stock Incentive Plan, (a) all of which
could be issued under the terms of the plan upon the exercise of stock
options or stock appreciation rights, and (b) only 11,000,000 of which
could be issued under the terms of the plan in the form of restricted
stock or “other stock-based awards,” which awards are valued in whole or
in part on the value of the shares of common stock. There were
89,723 shares remaining available for future issuance under the 2003 Stock
Incentive Plan, all of which could be issued under the terms of the plan
(a) upon the exercise of stock options or stock appreciation rights, or
(b) in the form of restricted stock or “other stock-based
awards.” In addition, there were 5,693 shares remaining
available for future issuance under the 1999 Stock Incentive Plan, all of
which could be issued (a) upon the exercise of stock options or stock
appreciation rights, or (b) in the form of restricted stock or “other
stock-based awards.” Finally, there were 330,149 shares
remaining available for future issuance under the 2004 Director
Compensation Plan, which shares are issuable under the terms of the plan
(a) only to eligible directors, and (b) upon the exercise of stock options
or in the form of common stock and restricted stock units, as specifically
set forth in the plan.
|
*
|
Director
|
Charles
C. Krulak
|
|
*
|
Director
|
Bobby
Lee Lackey
|
|
*
|
Director
|
Jon
C. Madonna
|
|
*
|
Director
|
Dustan
E. McCoy
|
|
*
|
Director
|
Gabrielle
K. McDonald
|
|
*
|
Director
|
J.
Stapleton Roy
|
|
*
|
Director
|
Stephen
H. Siegele
|
|
*
|
Director
|
J.
Taylor Wharton
|
|
By: /s/
Richard C.
Adkerson
|
|
Richard
C. Adkerson
|
|
Attorney-in-Fact
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Schedule
II-Valuation and Qualifying Accounts
|
F-2
|
|
FREEPORT-McMoRan
COPPER & GOLD INC.
|
|
SCHEDULE
II - VALUATION AND QUALIFYING
ACCOUNTS
|
Col.
A
|
Col.
B
|
Col.
C
|
Col.
D
|
Col.
E
|
||||||||||||
Additions
|
||||||||||||||||
Balance
at
Beginning
of
Period
|
Charged
to Costs and Expense
|
Charged
to Other Accounts
|
Other
Add
(Deduct)
|
Balance
at End of Period
|
||||||||||||
Reserves
and allowances deducted
|
||||||||||||||||
from
asset accounts:
|
||||||||||||||||
Materials
and supplies allowances:
|
||||||||||||||||
2007
|
16
|
7
|
-
|
(7
|
)
a
|
16
|
||||||||||
2006
|
17
|
6
|
-
|
(7
|
)
a
|
16
|
||||||||||
2005
|
17
|
6
|
-
|
(6
|
)
a
|
17
|
||||||||||
Valuation
allowance for
|
||||||||||||||||
deferred
tax assets:
|
||||||||||||||||
2007
|
925
|
332
|
-
|
(92
|
)
|
1,165
|
||||||||||
2006
|
802
|
123
|
-
|
-
|
925
|
|||||||||||
2005
|
658
|
144
|
-
|
-
|
802
|
|||||||||||
Reserves
for non-income taxes:
|
||||||||||||||||
2007
|
22
|
4
|
11
|
(3
|
)
|
34
|
||||||||||
2006
|
19
|
7
|
-
|
(4
|
)
b
|
22
|
||||||||||
2005
|
19
|
4
|
-
|
(4
|
)
b
|
19
|
||||||||||
a.
|
Primarily
represents write-offs of obsolete materials and supplies
inventories.
|
b.
|
Represents
amounts paid or adjustments to reserves based on revised
estimates.
|
2.1
|
Agreement
and Plan of Merger dated as of November 18, 2006, by and among
Freeport-McMoRan Copper & Gold Inc. (FCX), Phelps Dodge Corporation
and Panther Acquisition Corporation. Incorporated by reference
to Exhibit 2.1 to the Preliminary Joint Proxy Statement/Prospectus
included in the Registration Statement on Form S-4 (File No. 333-139252)
filed December 11, 2006, as amended on January 18, 2007 and February 12,
2007.
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of FCX. Incorporated by
reference to Exhibit 3.1 to the Current Report on Form 8-K of FCX dated
March 19, 2007.
|
|
3.2
|
Amended
and Restated By-Laws of FCX, as amended through May 1, 2007. Incorporated
by reference to Exhibit 3.3 to the Current Report on Form 8-K of FCX dated
May 1, 2007.
|
|
4.1
|
Certificate
of Designations of 5½% Convertible Perpetual Preferred Stock of FCX.
Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K
of FCX dated March 30, 2004 and filed March 31, 2004.
|
|
4.2
|
Credit
Agreement dated as of March 19, 2007, by and among FCX, the lenders party
thereto, the issuing banks party thereto, JPMorgan Chase Bank, N.A. as
administrative agent and collateral agent, and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as syndication agent. Incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K of FCX dated
March 19, 2007.
|
|
4.3
|
Amendment
Agreement dated as of July 3, 2007, amending the Senior Secured Credit
Agreement dated as of March 19, 2007, among Freeport-McMoRan Copper &
Gold Inc., the Lenders party thereto, the Issuing Banks party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent and as Collateral
Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
Syndication Agent. Incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K of FCX dated July 10,
2007.
|
|
4.4
|
Amended
and Restated Credit Agreement dated as of March 19, 2007, by and among
FCX, PT Freeport Indonesia, the lenders party thereto, the issuing banks
party thereto, JPMorgan Chase Bank, N.A. as administrative agent,
collateral agent, security agent and JAA security agent, U.S. Bank
National Association, as FI trustee, and Merrill Lynch, Pierce, Fenner
& Smith Incorporated, as syndication agent. Incorporated by reference
to Exhibit 10.2 to the Current Report on Form 8-K of FCX dated March 19,
2007.
|
|
4.5
|
Amendment
Agreement dated as of July 3, 2007, amending the Amended and Restated
Senior Secured Credit Agreement dated as of March 19, 2007, which amended
and restated the Amended and Restated Credit Agreement, dated as of July
25, 2006, which amended and restated the Amended and Restated Credit
Agreement, dated as of September 30, 2003, which amended and restated the
Amended and Restated Credit Agreement, dated as of October 19, 2001, which
amended and restated both the Credit Agreement, originally dated as of
October 27, 1989 and amended and restated as of June 1, 1993 and the
Credit Agreement, originally dated as of June 30, 1995, among
Freeport-McMoRan Copper & Gold Inc., PT Freeport Indonesia, U.S. Bank
National Association, as trustee for the Lenders and certain other lenders
under the FI Trust Agreement, the Lenders party thereto, the Issuing Banks
party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent,
Security Agent, JAA Security Agent and Collateral Agent, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as Syndication
Agent. Incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K of FCX dated July 10, 2007.
|
|
4.6
|
Rights
Agreement dated as of May 3, 2000, between FCX and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent. Incorporated by reference to Exhibit
4.26 to the Quarterly Report on Form 10-Q of FCX for the quarter ended
March 31, 2000.
|
4.7
|
Amendment
No. 1 to Rights Agreement dated as of February 26, 2002, between FCX and
Mellon Investor Services. Incorporated by reference to Exhibit 4.16 to the
Quarterly Report on Form 10-Q of FCX for the quarter ended March 31,
2002.
|
|
4.8
|
Indenture
dated as of March 19, 2007, from FCX to The Bank of New York, as Trustee,
with respect to the 8.25% Senior Notes due 2015, 8.375% Senior Notes due
2017, and the Senior Floating Rate Notes due 2015. Incorporated by
reference to Exhibit 4.1 to the Current Report on Form 8-K of FCX dated
March 19, 2007.
|
|
4.9
|
Certificate
of Designations of 6¾% Mandatory Convertible Preferred Stock of FCX.
Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K
of FCX dated March 22, 2007.
|
|
4.10
|
Indenture
dated as of February 11, 2003, from FCX to The Bank of New York, as
Trustee, with respect to the 7% Convertible Senior Notes due 2011.
Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K
of FCX dated February 11, 2003.
|
|
Note: Certain
instruments with respect to long-term debt of FCX have not been filed as
exhibits to this Quarterly Report on Form 10-K since the total amount of
securities authorized under any such instrument does not exceed 10 percent
of the total assets of FCX and its subsidiaries on a consolidated
basis. FCX agrees to furnish a copy of each such instrument
upon request of the Securities and Exchange Commission.
|
||
10.1
|
Contract
of Work dated December 30, 1991, between the Government of the Republic of
Indonesia and PT Freeport Indonesia. Incorporated by reference to Exhibit
10.1 to the FCX November 5, 2001 Form S-3.
|
|
10.2
|
Contract
of Work dated August 15, 1994, between the Government of the Republic of
Indonesia and PT Irja Eastern Minerals Corporation. Incorporated by
reference to Exhibit 10.2 to the FCX November 5, 2001 Form
S-3.
|
|
10.3
|
Participation
Agreement dated as of October 11, 1996, between PT Freeport Indonesia and
P.T. RTZ-CRA Indonesia with respect to a certain contract of work.
Incorporated by reference to Exhibit 10.4 to the FCX November 5, 2001 Form
S-3.
|
|
10.4
|
Agreement
dated as of October 11, 1996, to Amend and Restate Trust Agreement among
PT Freeport Indonesia, FCX, the RTZ Corporation PLC, P.T. RTZ-CRA
Indonesia, RTZ Indonesian Finance Limited and First Trust of New York,
National Association, and The Chase Manhattan Bank, as Administrative
Agent, JAA Security Agent and Security Agent. Incorporated by reference to
Exhibit 10.3 to the Current Report on Form 8-K of FCX dated November 13,
1996 and filed November 15, 1996.
|
|
10.5
|
Concentrate
Purchase and Sales Agreement dated effective December 11, 1996, between PT
Freeport Indonesia and PT Smelting. Incorporated by reference to Exhibit
10.3 to the FCX November 5, 2001 Form S-3.
|
|
10.6
|
Second
Amended and Restated Joint Venture and Shareholders’ Agreement dated as of
December 11, 1996, among Mitsubishi Materials Corporation, Nippon Mining
and Metals Company, Limited and PT Freeport Indonesia. Incorporated by
reference to Exhibit 10.5 to the FCX November 5, 2001 Form
S-3.
|
|
10.7
|
Participation
Agreement, dated as of March 16, 2005, among Phelps Dodge Corporation,
Cyprus Amax Minerals Company, a Delaware corporation, Cyprus Metals
Company, a Delaware corporation, Cyprus Climax Metals Company, a Delaware
corporation, Sumitomo Corporation, a Japanese corporation, Summit Global
Management, B.V., a Dutch corporation, Sumitomo Metal Mining Co., Ltd., a
Japanese corporation, Compañia de Minas Buenaventura S.A.A., a Peruvian
sociedad anonima abierta, and Sociedad Minera Cerro Verde S.A.A., a
Peruvian sociedad anonima abierta. Incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K of Phelps Dodge Corporation
dated March 16, 2005.
|
|
10.8
|
Guarantee,
dated as of March 16, 2005, among Phelps Dodge Corporation, Sumitomo
Corporation, a Japanese corporation, and Sumitomo Metal Mining Co., Ltd.,
a Japanese corporation incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K of Phelps Dodge Corporation dated March 16,
2005.
|
|
10.9
|
Shareholders
Agreement, dated as of June 1, 2005, among Phelps Dodge Corporation,
Cyprus Climax Metals Company, a Delaware corporation, Sumitomo
Corporation, a Japanese corporation, Sumitomo Metal Mining Co., Ltd., a
Japanese corporation, Summit Global Management B.V., a Dutch corporation,
SMM Cerro Verde Netherlands, B.V., a Dutch corporation, Compañia de Minas
Buenaventura S.A.A., a Peruvian sociedad anonima abierta, and Sociedad
Minera Cerro Verde S.A.A., a Peruvian sociedad anonima
abierta. Incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Phelps Dodge Corporation dated June 1,
2005.
|
|
10.10
|
Master
Participation Agreement, dated as of September 30, 2005, among Sociedad
Minera Cerro Verde S.A.A., Japan Bank for International Cooperation,
Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi, Ltd.,
KfW, Calyon New York Branch, The Royal Bank of Scotland plc, The Bank of
Nova Scotia, Mizuho Corporation Bank, Ltd. and Calyon New York Branch, as
administrative agent. Incorporated by reference to Exhibit 10.1
to the Quarterly Report on Form 10-Q of Phelps Dodge Corporation for the
quarter ended September 30, 2005 (the PD 2005 Third Quarter Form
10-Q). First Amendment to Master Participation Agreement, dated
as of December 16, 2005. Incorporated by reference to Exhibit
10.22 to the Annual Report on Form 10-K of Phelps Dodge Corporation for
the fiscal year ended December 31, 2005 (the PD 2005 Form
10-K).
|
|
10.11
|
Completion
Guarantee, dated as of September 30, 2005, among Sumitomo Metal Mining
Co., Ltd., Sumitomo Corporation, Compañia de Minas Buenaventura S.A.A.,
Phelps Dodge Corporation, Japan Bank for International Cooperation,
Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi, Ltd.,
KfW, Calyon New York Branch, The Royal Bank of Scotland plc, The Bank of
Nova Scotia, Mizuho Corporate Bank, Ltd. and Calyon New York Branch, as
administrative agent. Incorporated by reference to Exhibit 10.2
to the PD 2005 Third Quarter Form 10-Q.
|
|
10.12
|
Master
Security Agreement, dated as of September 30, 2005, among Sociedad Minera
Cerro Verde S.A.A., Japan Bank for International Cooperation, Sumitomo
Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi, Ltd., KfW,
Calyon New York Branch, The Royal Bank of Scotland plc, The Bank of Nova
Scotia, Mizuho Corporate Bank, Ltd., Calyon New York Branch, as
administrative agent, and Citibank, N.A. and Citibank del Peru
S.A. Incorporated by reference to Exhibit 10.3 to the PD 2005
Third Quarter Form 10-Q.
|
|
10.13
|
Transfer
Restrictions Agreement, dated as of September 30, 2005, among SMM Cerro
Verde Netherlands, B.V., Compañia de Minas Buenaventura S.A.A., Cyprus
Climax Metals Company, Sumitomo Metal Mining Co., Ltd., Sumitomo
Corporation, Phelps Dodge Corporation, Japan Bank for International
Cooperation, Sumitomo Mitsui Banking Corporation, The Bank of
Tokyo-Mitsubishi, Ltd., KfW, Calyon New York Branch, The Royal Bank of
Scotland plc, The Bank of Nova Scotia, Mizuho Corporate Bank, Ltd., and
Calyon New York Branch, as administrative agent. Incorporated
by reference to Exhibit 10.4 to the PD 2005 Third Quarter Form
10-Q.
|
10.14
|
JBIC
Loan Agreement, dated as of September 30, 2005, among Sociedad Minera
Cerro Verde S.A.A., Japan Bank for International Cooperation, and Sumitomo
Mitsui Banking Corporation, as JBIC Agent. Incorporated by
reference to Exhibit 10.5 to the PD 2005 Third Quarter Form
10-Q. First Amendment to JBIC Loan Agreement, dated as of
December 19, 2005. Incorporated by reference to Exhibit 10.26
to the PD 2005 Form 10-K.
|
|
10.15
|
KfW
Loan Agreement, dated as of September 30, 2005, between Sociedad Minera
Cerro Verde S.A.A. and KfW. Incorporated by reference to
Exhibit 10.6 to the PD 2005 Third Quarter Form 10-Q.
|
|
10.16
|
Loan
Agreement, dated as of September 30, 2005, among Sociedad Minera Cerro
Verde S.A.A., Calyon New York Branch (as administrative agent), Calyon New
York Branch, Mizuho Corporate Bank, Ltd., The Bank of Nova Scotia, and The
Royal Bank of Scotland plc. Incorporated by reference to
Exhibit 10.7 to the PD 2005 Third Quarter Form 10-Q.
|
|
10.17
|
Parent
Company Guarantee, dated as of September 30, 2005, between Phelps Dodge
Corporation and Sociedad Minera Cerro Verde S.A.A. (this guarantee is with
respect to the Operator’s Agreement, dated June 1, 2005, between Sociedad
Minera Cerro Verde S.A.A. and Minera Phelps Dodge del Peru
S.A.C.). Incorporated by reference to Exhibit 10.8 to the PD
2005 Third Quarter Form 10-Q.
|
|
10.18
|
Master
Agreement and Plan of Merger between Columbian Chemicals Company,
Columbian Chemicals Acquisition LLC and Columbian Chemicals Merger Sub,
Inc., dated November 15, 2005. Incorporated by reference to
Exhibit 10.31 to the PD 2005 Form 10-K.
|
|
10.19
|
Phelps
Dodge Corporation Retiree Medical Plan Welfare Benefit Trust Agreement
between Phelps Dodge Corporation and The Northern Trust Company, dated
December 15, 2005. Incorporated by reference to Exhibit 10.33
to the PD 2005 Form 10-K.
|
|
10.20
|
Reclamation
and Remediation Trust Agreement between Phelps Dodge Corporation and Wells
Fargo Delaware Trust Company, dated December 22,
2005. Incorporated by reference to Exhibit 10.34 to the PD 2005
Form 10-K.
|
|
Executive
Compensation Plans and Arrangements (Exhibits 10.21 through
10.73)
|
||
FCX
Performance Incentive Awards Program as amended effective December 4,
2007.
|
||
10.22
|
FCX
President’s Award Program. Incorporated by reference to Exhibit 10.7 to
the FCX November 5, 2001 Form S-3.
|
|
10.23
|
FCX
1995 Stock Option Plan, as amended and restated. Incorporated by reference
to Exhibit 10.23 to the Quarterly Report on Form 10-Q of FCX for the
quarter ended March 31, 2007 (the FCX 2007 First Quarter Form
10-Q).
|
|
10.24
|
FCX
Amended and Restated 1999 Stock Incentive Plan, as amended and restated.
Incorporated by reference to Exhibit 10.24 to the FCX 2007 First Quarter
Form 10-Q.
|
|
10.25
|
FCX
1999 Long-Term Performance Incentive Plan. Incorporated by reference to
Exhibit 10.19 to the Annual Report of FCX on Form 10-K for the fiscal year
ended December 31, 1999 (the FCX 1999 Form 10-K).
|
|
10.26
|
FCX
Stock Appreciation Rights Plan dated May 2, 2000. Incorporated by
reference to Exhibit 10.20 to the Quarterly Report on Form 10-Q of FCX for
the quarter ended June 30, 2001 (the FCX 2001 Second Quarter Form
10-Q).
|
10.27
|
FCX
2003 Stock Incentive Plan, as amended and restated. Incorporated by
reference to Exhibit 10.30 to the FCX First Quarter 2007 Form
10-Q.
|
|
10.28
|
FCX
1995 Stock Option Plan for Non-Employee Directors, as amended and
restated. Incorporated by reference to Exhibit 10.34 to the FCX 2007 First
Quarter Form 10-Q.
|
|
10.29
|
FCX
2004 Director Compensation Plan, as amended and restated. Incorporated by
reference to Exhibit 10.35 to the FCX 2007 First Quarter Form
10-Q.
|
|
10.30
|
Form
of Amendment No. 1 to Notice of Grant of Nonqualified Stock Options and
Stock Appreciation Rights under the 2004 Director Compensation Plan.
Incorporated by reference to Exhibit 10.4 to the Current Report on Form
8-K of FCX dated May 2, 2006.
|
|
10.31
|
FCX
Amended and Restated 2006 Stock Incentive Plan. Incorporated by reference
to Exhibit 10.1 to the Current Report on Form 8-K of FCX dated July 10,
2007.
|
|
Form
of Notice of Grant of Nonqualified Stock Options for grants under the FCX
1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006
Stock Incentive Plan.
|
||
Form
of Restricted Stock Unit Agreement for grants under the FCX 1999 Stock
Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive
Plan.
|
||
Form
of Performance-Based Restricted Stock Unit Agreement for grants under the
FCX 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006
Stock Incentive Plan.
|
||
Form
of Restricted Stock Unit Agreement (form used in connection with
participant elections) for grants under the FCX 1999 Stock Incentive Plan,
the 2003 Stock Incentive Plan and the 2006 Stock Incentive
Plan.
|
||
Form
of Performance-Based Restricted Stock Unit Agreement (form used in
connection with participant elections) for grants under the FCX 1999 Stock
Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive
Plan.
|
||
10.37
|
FCX
Director Compensation. Incorporated by reference to Exhibit 10.25 to the
Annual Report on Form 10-K of FCX for the fiscal year ended December 31,
2004 (the FCX 2004 Form 10-K).
|
|
10.38
|
FCX
Supplemental Executive Retirement Plan, as amended and restated.
Incorporated by reference to Exhibit 10.1 to the Current Report on Form
8-K of FCX dated January 30, 2007.
|
|
10.39
|
FCX
2005 Annual Incentive Plan. Incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K of FCX dated May 5,
2005.
|
|
10.40
|
FCX
Executive Services Program. Incorporated by reference to Exhibit 10.5 to
the Current Report on Form 8-K of FCX dated May 2,
2006.
|
|
10.41
|
FM
Services Company Performance Incentive Awards Program as amended effective
February 2, 1999. Incorporated by reference to Exhibit 10.19 to the FCX
1998 Form 10-K.
|
|
10.42
|
Consulting
Agreement dated as of December 22, 1988, with Kissinger Associates, Inc.
(Kissinger Associates). Incorporated by reference to Exhibit 10.21 to the
Annual Report on Form 10-K of FCX for the fiscal year ended December 31,
1997 (the FCX 1997 Form 10-K).
|
10.43
|
Letter
Agreement dated May 1, 1989, with Kent Associates, Inc. (Kent Associates,
predecessor in interest to Kissinger Associates). Incorporated by
reference to Exhibit 10.22 to the FCX 1997 Form 10-K.
|
|
10.44
|
Letter
Agreement dated January 27, 1997, among Kissinger Associates, Kent
Associates, FCX, Freeport-McMoRan Inc., and FM Services Company (FMS).
Incorporated by reference to Exhibit 10.26 to the Annual Report on Form
10-K of FCX for the fiscal year ended December 31, 2001 (the FCX 2001 Form
10-K).
|
|
10.45
|
Supplemental
Consulting Agreement with Kissinger Associates and Kent Associates,
effective as of January 1, 2008. Incorporated by reference to
Exhibit 10.49 to the Quarterly Report on Form 10-Q of FCX for the quarter
ended September 31, 2007 (the FCX 2007 Third Quarter Form
10-Q).
|
|
10.46
|
Agreement
for Consulting Services between FTX and B. M. Rankin, Jr. effective as of
January 1, 1990 (assigned to FMS as of January 1, 1996). Incorporated by
reference to Exhibit 10.24 to the FCX 1997 Form 10-K.
|
|
10.47
|
Supplemental
Agreement between FMS and B. M. Rankin, Jr. dated December 15, 1997.
Incorporated by reference to Exhibit 10.25 to the FCX 1997 Form
10-K.
|
|
Supplemental
Letter Agreement between FMS and B. M. Rankin, Jr., effective as of
January 1, 2008.
|
||
10.49
|
Letter
Agreement effective as of January 7, 1997, between Senator J. Bennett
Johnston, Jr. and FMS. Incorporated by reference to Exhibit 10.31 to the
FCX 2001 Form 10-K.
|
|
10.50
|
Supplemental
Letter Agreement dated July 14, 2003, between J. Bennett Johnston, Jr. and
FMS. Incorporated by reference to Exhibit 10.28 to the Quarterly Report on
Form 10-Q of FCX for the quarter ended June 30, 2003.
|
|
10.51
|
Supplemental
Letter Agreement between FMS and J. Bennett Johnston, Jr., dated January
18, 2005. Incorporated by reference to Exhibit 10.40 to the FCX 2004 Form
10-K.
|
|
10.52
|
Supplemental
Consulting Agreement between FMS and J. Bennett Johnston, Jr., effective
as of January 1, 2008. Incorporated by reference to Exhibit
10.56 to the FCX 2007 Third Quarter Form 10-Q.
|
|
10.53
|
Letter
Agreement dated November 1, 1999, between FMS and Gabrielle K. McDonald.
Incorporated by reference to Exhibit 10.33 to the FCX 1999 Form
10-K.
|
|
10.54
|
Supplemental
Letter Agreement, between FMS and Gabrielle K. McDonald, effective as of
January 1, 2008. Incorporated by reference to Exhibit 10.58 to
the FCX 2007 Third Quarter Form 10-Q.
|
|
10.55
|
Executive
Employment Agreement dated April 30, 2001, between FCX and James R.
Moffett. Incorporated by reference to Exhibit 10.35 to the FCX 2001 Second
Quarter Form 10-Q.
|
|
Agreement
for Consulting Services between FMS and Dr. J. Taylor Wharton effective as
of January 11, 2008.
|
||
Executive
Employment Agreement effective January 29, 2008, between FCX and Richard
C. Adkerson.
|
||
10.58
|
Change
of Control Agreement dated April 30, 2001, between FCX and James R.
Moffett. Incorporated by reference to Exhibit 10.37 to the FCX 2001 Second
Quarter Form 10-Q.
|
|
10.59
|
First
Amendment to Executive Employment Agreement dated December 10, 2003,
between FCX and James R. Moffett. Incorporated by reference to Exhibit
10.36 to the Annual Report on Form 10-K of FCX for the fiscal year ended
December 31, 2003 (the FCX 2003 Form 10-K).
|
|
10.60
|
First
Amendment to Change of Control Agreement dated December 10, 2003, between
FCX and James R. Moffett. Incorporated by reference to Exhibit 10.38 to
the FCX 2003 Form 10-K.
|
|
10.61
|
Change
of Control Agreement dated February 3, 2004, between FCX and Michael J.
Arnold. Incorporated by reference to Exhibit 10.40 to the FCX 2003 Form
10-K.
|
|
Executive
Employment Agreement effective January 29, 2008, between FCX and Kathleen
L. Quirk.
|
||
10.63
|
Phelps
Dodge 2003 Stock Option and Restricted Stock Plan, as
amended. Incorporated by reference to Exhibit 10.1 to the
Registration Statement on Form S-8 (File No. 333-141358) of FCX filed
March 16, 2007 (the FCX March 16, 2007 Form S-8).
|
|
10.64
|
Phelps
Dodge 1998 Stock Option and Restricted Stock Plan, as
amended. Incorporated by reference to Exhibit 10.2 to the FCX
March 16, 2007 Form S-8.
|
|
10.65
|
Phelps
Dodge Corporation 2006 Executive Performance Incentive
Plan. Incorporated by reference to Appendix A of Phelps Dodge
Corporation’s 2005 definitive Proxy Statement on Schedule 14A filed April
15, 2005.
|
|
10.66
|
Letter
of employment by and between Freeport-McMoRan Copper & Gold Inc. and
Timothy R. Snider dated April 4, 2007. Incorporated by reference to
Exhibit 10.73 to the FCX 2007 First Quarter Form 10-Q.
|
|
10.67
|
Form
of Change of Control Agreement (amended and restated effective January 1,
2005), adopted by Phelps Dodge Corporation for agreements entered into
between Phelps Dodge Corporation and other of its executive officers and
other members of its senior management team. Incorporated by
reference to Exhibit 10.1 to Amendment No. 1 to the Annual Report on Form
10-K of Phelps Dodge Corporation for the fiscal year ended December 31,
2006 (Amendment No. 1 to the PD 2006 Form 10-K).
|
|
10.68
|
Form
of Severance Agreement (as amended and restated effective January 1, 2005)
adopted by Phelps Dodge Corporation and entered into between Phelps Dodge
Corporation and certain of its executives. Incorporated by
reference to Exhibit 10.2 of Amendment No. 1 to the PD 2006 Form
10-K.
|
|
10.69
|
Form
of Amendment to the ELIP Split Dollar Life Insurance Agreement
(Endorsement Method) adopted by Phelps Dodge Corporation and entered into
by and between Phelps Dodge and certain of its executives. Incorporated by
reference to Exhibit 10.76 to the FCX 2007 First Quarter Form
10-Q.
|
|
10.70
|
The
Phelps Dodge Corporation Supplemental Retirement Plan, amended and
restated effective January 1, 2005 and adopted on March 16, 2007.
Incorporated by reference to Exhibit 10.77 to the FCX 2007 First Quarter
Form 10-Q.
|
|
10.71
|
The
Phelps Dodge Corporation Supplemental Savings Plan, amended and restated
effective January 1, 2005, and adopted on March 16, 2007. Incorporated by
reference to Exhibit 10.78 to the FCX 2007 First Quarter Form
10-Q.
|
10.72
|
First
Amendment to the Phelps Dodge Corporation Supplemental Savings Plan, dated
March 16, 2007. Incorporated by reference to Exhibit 10.79 to the FCX 2007
First Quarter Form 10-Q.
|
|
10.73
|
Second
Amendment to the Phelps Dodge Corporation Supplemental Savings Plan, dated
as of March 16, 2007. Incorporated by reference to Exhibit 10.80 to the
FCX 2007 First Quarter Form 10-Q.
|
|
FCX
Computation of Ratio of Earnings to Fixed Charges.
|
||
FCX
Principles of Business Conduct.
|
||
Subsidiaries
of FCX.
|
||
Consent
of Ernst & Young LLP.
|
||
Consent
of Independent Mining Consultants, Inc.
|
||
Consent
of Pincock, Allen & Holt.
|
||
Consent
of Chlumsky, Armburst & Meyer, LLC.
|
||
Certified
resolution of the Board of Directors of FCX authorizing this report to be
signed on behalf of any officer or director pursuant to a Power of
Attorney.
|
||
Powers
of Attorney pursuant to which this report has been signed on behalf of
certain officers and directors of FCX.
|
||
Certification
of Principal Executive Officer pursuant to Rule 13a-14(a)/15d –
14(a).
|
||
Certification
of Principal Financial Officer pursuant to Rule 13a-14(a)/15d –
14(a).
|
||
Certification
of Principal Executive Officer pursuant to 18 U.S.C. Section
1350.
|
||
Certification
of Principal Financial Officer pursuant to 18 U.S.C Section
1350.
|
Scheduled Vesting
Date
|
Number of
RSUs
|
|
Scheduled Vesting
Date
|
Number of
RSUs
|
|
1.
|
Services
. During
the term of this Agreement, Consultant will be responsible for consulting
on all medical and health affairs affecting FMS, its Affiliates and their
respective officers, directors, and employees, focusing on sites in the
United States (the “
Services
”), as
requested by Executive Officers of FMS or its
Affiliates.
|
2.
|
Third Party
Services
. Consultant may provide and be paid to provide
services similar to the Services to third parties; provided, however,
Consultant shall not engage in any business or activity detrimental to the
business and interests of FMS or any of its Affiliates during the term of
this Agreement.
|
3.
|
Independent
Contractor
. Consultant shall perform the Services as an
independent contractor and Consultant shall not be deemed to be an
employee or agent of FMS or any of its Affiliates. This Agreement shall
not be deemed to create a partnership or joint venture between Consultant
and FMS.
|
4.
|
No Agency
Authority
. Except as and to the extent that FMS may
otherwise prescribe in writing, Consultant shall not have any authority to
negotiate or conclude any contracts or to do anything which would
otherwise result in the creation of a binding obligation on FMS or its
Affiliates and Consultant shall not make any statement or representation
to any third party concerning Consultant’s authority which is contrary to
this provision.
|
5.
|
Compensation
. For
the satisfactory performance of all Services and undertakings
hereunder:
|
i.
|
FMS
shall pay Consultant $400,000 per year, paid at a monthly rate of
$33,333.33 on the first business day of each calendar
month.
|
ii.
|
FMS
shall reimburse Consultant for all reasonable and customary out-of-pocket
expenses incurred by Consultant in connection with the performance of the
|
Services and that comply with FMS’ expense reimbursement policies. Expense reports must be submitted by Consultant to FMS for approval. |
6.
|
Invoices and
Payment
. Consultant shall issue an invoice for reimbursable
expenses to FMS by the fifteenth (15
th
)
of each month for any amount which FMS is required to reimburse to
Consultant pursuant to Article 5(ii)
above.
|
7.
|
Tax
Matters
. Consultant shall be solely responsible for all
United States or other taxes that may be applicable as a result of amounts
payable to Consultant pursuant to this
Agreement.
|
8.
|
Term and
Termination
. This Agreement shall commence January 11,
2008 (the “
Effective
Date
”) and, unless earlier terminated, shall continue through
December 31, 2008 (the “
Primary Term
”),
and shall be automatically renewed thereafter, on the same terms and
conditions, for successive one (1) year terms (each a “
Renewal
Term
”). Either of FMS or Consultant may, however,
terminate this Agreement during the Primary Term or any Renewal Term
without cause or penalty at any time by delivery of a written notice of
termination thirty (30) or more days prior to the desired termination
date. All references to the “term” of this Agreement shall
include both the Primary Term and any Renewal
Terms.
|
|
This
Agreement shall automatically terminate if Consultant is no longer
available for any reason to provide the Services contemplated by this
Agreement.
|
|
The
termination of this Agreement shall not affect any previously accrued
obligations of FMS set forth in Article 5 above (although the fees payable
under Article 5(i) shall be prorated through the termination date) or of
Consultant set forth in Articles 7 and 9 (which shall continue in full
force and effect for the maximum period allowed by
law).
|
9.
|
Confidentiality
. Consultant
shall hold in a fiduciary capacity for the benefit of FMS and its
Affiliates all non-public information, knowledge or data relating to FMS,
its Affiliates or any of their employees or agents which shall have been
obtained by Consultant during or before the term of this Agreement
(collectively, the “
Confidential
Information
”). Confidential Information includes, without
limitation: business plans, environmental reports, supply lists, price
lists, non-public financial reports, personnel data, budget
|
|
projections
and all medical or health related reports, data, lists, plans, studies or
other information. The term “Confidential Information” shall exclude any
information which is publicly available from newspapers, television,
radio, computer data bases, journals, and other sources of widely
circulated information (unless such information has become publicly
available due to Consultant’s breach of his obligations under this
Agreement). Consultant shall not, without the prior written consent of
FMS, at any time, whether during or after the term of this Agreement,
communicate or divulge any such Confidential Information to anyone other
than FMS and its Affiliates and/or persons designated by FMS. All records,
files, drawings, documents, notes, programs, equipment and the like
relating to the business or activities of FMS or its Affiliates which
Consultant shall prepare or use or come into contact with shall be and
remain the sole property of FMS or its Affiliates, as the case may be. If
Consultant is required to divulge any Confidential Information by a court
order or other governmental directive, Consultant shall first inform FMS
of the court order or governmental directive in sufficient time to permit
FMS to contest such court order or governmental directive or to seek
protective orders concerning the handling of such Confidential
Information. Consultant agrees that FMS and its Affiliates will suffer
irreparable harm which cannot be adequately compensated by monetary
damages if Consultant breaches the confidentiality provisions in this
Article and Consultant therefore agrees that FMS and its Affiliates shall
be entitled to injunctive relief in the event of a threatened breach of
the confidentiality provisions of this Article by Consultant without the
necessity of posting a bond or other security (unless otherwise required
by non-waivable applicable
law).
|
10.
|
Duty to
Indemnify
. FMS shall indemnify, defend and hold harmless
Consultant from and against any and all costs, losses, liabilities,
damages, lawsuits, deficiencies, claims and expenses, including without
limitation, interest, penalties, costs of litigation, and other losses,
reasonable attorneys’ fees and all amounts paid in investigation, defense
or settlement of any of the foregoing (collectively, the “
Damages
”),
incurred in connection with, arising out of, resulting from or incident to
any provision of Services under this Agreement;
provided, however,
that
FMS shall have no duty under this section with respect to (i) Damages
resulting from Consultant’s gross negligence or intentional or willful
misconduct or (ii) medical malpractice claims of the type which are
excluded from coverage under FMS’ liability insurance
policies. If FMS acknowledges its duty of indemnification under
this section with respect to any third party suit, demand or claim against
Consultant, FMS shall be entitled to select counsel to handle the defense
of such matter and shall be entitled to settle such matter without
Consultant’s consent if the settlement settles all outstanding claims
against Consultant relating to the subject matter of the suit, demand or
claim and can not reasonably be expected to expose Consultant to
additional suits, demands or
claims.
|
11.
|
Code of Business
Ethics
. Consultant represents and warrants that he has
reviewed the Ethics and Business Conduct Policy (a copy of which is
attached to this Agreement) and agrees that he will comply in all respects
with such policy, as such may be updated from time to time, in all matters
relating to this Agreement and his provision of Services to FMS and its
Affiliates. FMS may revise the Ethics and Business Conduct
Policy at any
|
|
time. If
FMS revises the Ethics and Business Conduct Policy, FMS shall provide the
revised policy to Consultant.
|
12.
|
Notices
. Any
notice required to be given under this Agreement shall be in writing and
shall be deemed to have been effectively given (i) when personally
delivered, or (ii) five working days after being sent by registered or
certified air mail, postage prepaid and return receipt requested, in each
case addressed as follows:
|
|
If
to FMS:
|
|
Richard
C. Adkerson
|
|
Chairman
of the Board, FM Services
|
|
c/o
Freeport-McMoRan Copper & Gold
Inc.
|
|
1
North Central Avenue
|
|
Phoenix,
Arizona 85004
|
|
If
to Consultant:
|
|
Dr.
J. Taylor Wharton
|
|
1332
Milford Street
|
|
Houston,
Texas 77006
|
|
Or
to an alternate address which is specified by notice given as
aforesaid.
|
13.
|
Disputes
. The
parties agree that any disputes arising out of this Agreement which cannot
be amicably resolved shall be brought before the Federal District Court
for the Eastern District of Louisiana or, if federal jurisdiction is not
available, in the District Courts of Orleans or Jefferson Parish,
Louisiana, U.S.A. Each party hereby consents to the exclusive jurisdiction
of said courts over all disputes arising out of this Agreement and agrees
that service of process in any manner authorized by said court shall be
sufficient for all purposes.
|
14.
|
Entire
Agreement
. This Agreement constitutes the entire
understanding of the parties with respect to the provision of Services by
Consultant and, as the Effective Date, supersedes all prior written and
oral agreements, understandings, representations or commitments by the
parties with respect to such Services. This Agreement may not
be amended, modified or altered except by a written agreement executed by
the parties hereto.
|
15.
|
Governing
Law
. This Agreement shall be governed by and construed
in accordance with the laws of the State of Louisiana,
U.S.A.
|
|
FM
SERVICES COMPANY
|
By:
|
/s/
Richard C. Adkerson
|
Name:
|
Richard
C. Adkerson
|
Title
|
Chairman
of the Board
|
|
CONSULTANT:
|
By:
|
/s/
Dr. J. Taylor Wharton
|
Name:
|
Dr.
J. Taylor Wharton
|
Scheduled Vesting
Date
Grant
Date
January
1, 2009
January
1, 2010
January
1, 2011
January
1, 2012
|
Number of
RSUs
40,000
40,000
40,000
40,000
40,000
|
Scheduled Vesting
Date
Grant
Date
January
1, 2009
January
1, 2010
January
1, 2011
January
1, 2012
|
Number of
RSUs
15,000
15,000
15,000
15,000
15,000
|
For
the years ended December 31,
|
||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
Income
from continuing operations before income taxes,
|
||||||||||||||||
minority
interests in net income of consolidated
|
||||||||||||||||
companies,
equity in affiliated companies’ net
|
||||||||||||||||
earnings
and cumulative effect of accounting
|
||||||||||||||||
change
|
$
|
6,111
|
$
|
2,819
|
$
|
2,028
|
$
|
572
|
$
|
578
|
||||||
Amortization
of previously capitalized interest
|
17
|
18
|
18
|
18
|
18
|
|||||||||||
Less:
capitalized interest
|
(147
|
)
|
(11
|
)
|
(4
|
)
|
(3
|
)
|
(3
|
)
|
||||||
Earnings
from continuing operations before fixed charges
|
5,981
|
2,826
|
2,042
|
587
|
593
|
|||||||||||
Fixed
charges:
|
||||||||||||||||
Interest
expense, net of capitalized interest
|
496
|
71
|
124
|
140
|
181
|
|||||||||||
Capitalized
interest
|
147
|
11
|
4
|
3
|
3
|
|||||||||||
Amortization
of debt expenses, premiums and discounts
|
17
|
5
|
8
|
8
|
16
|
|||||||||||
Interest
portion of rental expense
|
12
|
1
|
1
|
1
|
1
|
|||||||||||
Total
fixed charges
|
672
|
88
|
137
|
152
|
201
|
|||||||||||
Adjusted
earnings
|
$
|
6,653
|
$
|
2,914
|
$
|
2,179
|
$
|
739
|
$
|
794
|
||||||
Ratio
of earnings to fixed charges
a
|
9.9
|
33.1
|
15.9
|
4.9
|
4.0
|
|||||||||||
Preferred
stock dividend requirements:
|
||||||||||||||||
Total
fixed charges
|
$
|
672
|
$
|
88
|
$
|
137
|
$
|
152
|
$
|
201
|
||||||
Preferred
stock dividends
|
340
|
116
|
128
|
103
|
60
|
|||||||||||
Combined
fixed charges and preferred stock dividends
|
$
|
1,012
|
$
|
204
|
$
|
265
|
$
|
255
|
$
|
261
|
||||||
Ratio
of earnings to combined fixed charges and preferred
|
||||||||||||||||
stock
dividends
a
|
6.6
|
14.3
|
8.2
|
2.9
|
3.0
|
|||||||||||
a.
|
For
purposes of computing the consolidated ratio of earnings to fixed charges,
earnings consist of income from continuing operations before income taxes,
minority interests in net income of consolidated subsidiaries, equity in
affiliated companies' net earnings and cumulative effect of accounting
changes. Minority interests in majority-owned subsidiaries were not
deducted from earnings as all such subsidiaries had fixed charges. Fixed
charges from continuing operations consist of interest (including
capitalized interest) of all indebtedness; amortization of debt discounts,
premiums and expenses; and that portion of rental expense that FCX
believes to be representative of interest. For purposes of calculating the
ratio of earnings to combined fixed charges and preferred stock dividends,
the preferred stock dividend requirements were assumed to be equal to the
pre-tax earnings that would be required to cover such dividend
requirements. The amount of pre-tax earnings required to cover such
preferred stock dividends was computed using the effective tax rate for
each applicable year.
|
OUR
PRINCIPLES OF BUSINESS CONDUCT
|
1
|
Compliance
with the Principles of Business Conduct
|
1
|
Questions
about the Principles
|
2
|
OUR
COMPANY
|
2
|
Accurate
and Complete Books and Records
|
2
|
Confidential
Information and Intellectual Property
|
3
|
Respect
for Intellectual Property of Others
|
4
|
Protecting
Company Assets
|
5
|
Conflicts
of Interest
|
6
|
OUR
WORKPLACE
|
7
|
Health
and Safety
|
7
|
Drug
and Alcohol Abuse
|
8
|
Employee
Privacy and Personal Activities
|
9
|
Workplace
Violence / Site Security
|
10
|
OUR
COMMUNITY
|
10
|
Environmental
Obligations
|
10
|
Human
Rights
|
11
|
Social
Responsibility and Community Relations
|
11
|
Fighting
Corruption and Bribery
|
11
|
Political
Activities and Contributions
|
12
|
OUR
MARKET
|
13
|
Fair
Competition
|
13
|
Corporate
Communications
|
14
|
Insider
Trading
|
15
|
Trade
Restrictions
|
16
|
OUR
COMPLIANCE RESPONSIBILITIES
|
18
|
Reporting
Possible Violations and Getting Help
|
18
|
Resolving
and Investigating Concerns
|
19
|
Our
Non-Retaliation Policy
|
19
|
Discipline
|
20
|
·
|
Talk
to your supervisor or local Human Resource
representative
|
·
|
Talk
to your local Legal Department
|
·
|
Call
or visit your site Compliance
representative
|
·
|
Go
to the Compliance website
www.tobedetermined.com
|
·
|
Call
the Corporate Human Resources or Legal
Department
|
·
|
Call
our internal PBC Question Line at 602-366-xxxx, or one of our designated
compliance officers: Dean Falgoust 504-582-4206 (email:
dean_falgoust@fmi.com) or Cathy Hardwick 602-366-8363 (email:
cathy_hardwick@fmi.com)
|
·
|
For
more details read the policies referenced in the PBC, which can be found
on the Compliance website or in your local Human Resources
Department
|
·
|
Exploration
plans
|
·
|
Business
objectives and strategies
|
·
|
Unpublished
financial information
|
·
|
Computer
programs and related documentation
|
·
|
Customer,
supplier and pricing information
|
·
|
Mine
plans
|
·
|
Reserve
information that has not been made
public
|
·
|
Research,
processes, formulas and technical
data
|
·
|
Trade
secrets and patent applications
|
·
|
Salary
and benefits data
|
·
|
Employee
information
|
·
|
Do
not disclose proprietary or confidential information to persons outside
FCX
|
·
|
Exercise
caution when discussing Company business in public places where
conversations can be overheard, such as restaurants, elevators and
airplanes
|
·
|
Recognize
the potential for eavesdropping on cellular
telephones
|
·
|
Do
not use proprietary or confidential information for personal benefit or
the benefit of persons outside of
FCX
|
·
|
Do
not share proprietary or confidential information with other employees
except on a legitimate “need-to-know”
basis
|
·
|
Never
provide your password(s) to anyone for any reason except as provided by
the Enterprise MIS End User Policy
|
·
|
Competing
Employment.
A conflict of interest may arise if you take a second
job working for a customer, supplier, vendor, competitor or government
body with regulatory authority over the Company or if your outside
employment or other activities are so demanding that they interfere with
your ability to fulfill your responsibilities to
FCX.
|
·
|
Investments.
Each one of us must be careful that our investments, or those of our close
relatives, do not impair our ability to make objective decisions on behalf
of our Company.
|
·
|
Doing Business with
Family and Friends.
A conflict of interest may exist if a close
relative or friend buys, sells or leases any kind of property or equipment
from or to the Company, provides services to the Company or if we direct
Company purchases or sales to or through a close relative or
friend.
|
·
|
Applicants for
Employment.
A conflict of interest may exist if a close relative or
friend applies for employment with the Company. If a close relative or
friend applies for employment to a position for which you make or have
input into hiring decisions you should declare your relationship with the
applicant and remove yourself from the hiring process. If you are employed
in Human Resources and a close relative or friend applies for employment,
you should declare your relationship with the applicant to your Manager.
Your manager will arrange for another Human Resources employee to manage
the filling of the position.
|
·
|
Personal
Relationships.
FCX recognizes and respects our employees’ right to
associate freely and to pursue personal relationships with those we
encounter in the work environment. In return, we must use good judgment to
ensure that those relationships do not negatively affect our job
performance, our ability to supervise others, or the work
environment.
|
·
|
Receiving Gifts and
Entertainment.
We have many suppliers who are vital to our success,
which is why relationships with suppliers must be based entirely on sound
business decisions and fair dealing. Business gifts and entertainment can
build goodwill, but they can also make it harder to be objective about the
person who provides them. None of us should accept gifts and entertainment
from any organization or individual if doing so might impair, or appear to
impair, our ability
|
|
·
|
Contributions
to any Company-related political committee, such as a political action
committee, so as to match, in whole or in part, a contribution voluntarily
made to that committee by an eligible employee or other
individuals
|
·
|
Contributions
to any political committee sponsored by an industry or trade association
of which we are members
|
● |
Other contributions permitted by law and specifically authorized by
executive management after legal review
|
●
|
Candidate site visits as permitted by
law
|
·
|
Contributions
to non-partisan voter registration, education and voter turnout
programs
|
·
|
Dealing with
competitors.
Price-fixing, bid-rigging, market allocation,
predatory pricing and customer or supplier boycotts are all forbidden by
antitrust laws. It is crucial to avoid even the appearance of an agreement
to engage in any prohibited activity with a
competitor.
|
·
|
Participation in
industry associations.
Antitrust laws can apply to even casual
information exchanges, so if you are active in industry trade
associations, you must be aware of the law and avoid situations in which
there is discussion of future pricing, competitive initiatives and other
information that might appear to restrain trade. Contact the Legal
Department if you have any questions, but particularly regarding any
proposed association activity that would have a potential effect on
competition, such as the development of product standards or an industry
code or practice.
|
·
|
Dealing with
customers.
Insulting or misrepresenting competitors or their
products, price discrimination and tying (providing one product to a
customer only if they buy a second as well) can all be antitrust
violations. It is important to remember that we must deal with customers
on fair and equal footing.
|
·
|
Collecting competitive
information.
Information about our competitors’ activities must be
collected in accordance with the law. It is appropriate for the Company to
keep up with competitive developments and to review all pertinent public
information about our competitors. However, we cannot attempt through
improper means to acquire a competitor’s trade secrets or other
proprietary or confidential information, including information about
facilities, manufacturing capacity, technical developments, bids or
customers.
|
·
|
Information
that we are about to acquire a company or sell a business
unit
|
·
|
Information
that we are about to announce a major change in
strategy
|
·
|
Information
that we are going to open, or close, a particular
mine
|
·
|
Information
that we are expanding, or reducing, operations at a particular
mine
|
·
|
Information
regarding the Company’s exploration plans and non-public
reserves
|
·
|
Exports
or re-exports to a prohibited
country
|
·
|
Imports
from, or dealings in property originating from, a sanctioned
country
|
·
|
Assisting
another company or person in doing business with or in a sanctioned
country
|
·
|
Financial
transactions incident to travel to, within or from a sanctioned
country
|
·
|
New
investments and other dealings in a sanctioned country or with designated
individuals
|
·
|
Transfer
of restricted software, technical data, or technology by e-mail, download,
service work, meetings or visits to FCX
facilities
|
·
|
Export
of articles or services designed or adaptable for military
application
|
·
|
Irregularities
in the way payments are made, including large cash payments or
transactions that may be structured in unusual
ways
|
·
|
Customers
who appear to lack integrity in their operations or whose profiles do not
fit the transactions that they are seeking to enter
into
|
·
|
The
next level of management
|
·
|
The
manager responsible for the area
concerned
|
·
|
Your
local Human Resources or Compliance
representative
|
·
|
Corporate
Human Resources, Legal or Compliance
Departments
|
·
|
Our
internal PBC Question Line at 602-366-xxxx, or one of our designated
compliance officers: Dean Falgoust 504-582-4206 (email:
dean_falgoust@fmi.com) or Cathy Hardwick 602-366-8363 (email:
cathy_hardwick@fmi.com)
|
·
|
Our
Compliance Line via phone (country code +
800-295-6783)
|
·
|
Talk
to your supervisor or local Human Resource
representative
|
·
|
Talk
to your local Legal Department
|
·
|
Go
to the Compliance website
www.tobedetermined.com
|
·
|
Call
or visit your site Compliance
Representative
|
·
|
Call
the Corporate Human Resources or Compliance
Department
|
·
|
Call
our internal PBC Question Line at 602-366-xxxx, or one of our designated
compliance officers: Dean Falgoust 504-582-4206 (email:
dean_falgoust@fmi.com) or Cathy Hardwick 602-366-8363 (email:
cathy_hardwick@fmi.com)
|
·
|
Read
the referenced policies for more
details
|
·
|
Contacting
your supervisor or local Human Resource
representative
|
·
|
Call
our internal PBC Question Line at 602-366-xxxx, or one of our designated
compliance officers: Dean Falgoust 504-582-4206 (email:
dean_falgoust@fmi.com) or Cathy Hardwick 602-366-8363 (email:
cathy_hardwick@fmi.com)
|
·
|
Calling
the FCX Compliance Line at
1-800-295-6783
|
Entity
|
Jurisdiction
of Organization
|
Name
Under Which It Does Business
|
Ajo
Improvement Company
|
Arizona
|
Same
|
Amax
Arizona, Inc.
|
Nevada
|
Same
|
Amax
de Chile, Inc.
|
Delaware
|
Same
|
Amax
Energy Inc.
|
Delaware
|
Same
|
Amax
Exploration (Ireland), Inc.
|
Delaware
|
Same
|
Amax
Exploration, Inc.
|
Delaware
|
Same
|
Amax
Metals Recovery, Inc,
|
Delaware
|
Same
|
Amax
Nickel Overseas Ventures, Inc.
|
Delaware
|
Same
|
Amax
Realty Development, Inc.
|
Delaware
|
Same
|
Amax
Research & Development, Inc.
|
Delaware
|
Same
|
Amax
Specialty Coppers Corporation
|
Delaware
|
Same
|
Amax
Specialty Metals (Driver), Inc.
|
Delaware
|
Same
|
Amax
Zinc (Newfoundland) Limited
|
Delaware
|
Same
|
American
Metal Climax, Inc.
|
Delaware
|
Same
|
Ametalco
Limited
|
United
Kingdom
|
Same
|
Ametalco,
Inc.
|
New
York
|
Same
|
Annavas
Development Co., Ltd.
|
Delaware
|
Same
|
Arizona
Community Investment Corporation
|
Arizona
|
Same
|
Atlantic
Copper, S.A.U.
|
Spain
|
Same
|
Bisbee
Queen Mining Company
|
Delaware
|
Same
|
Blackwell
Zinc Company, Inc.
|
New
York
|
Same
|
Capital
Gestão de Negócios Ltd.
|
Brazil
|
Same
|
Cates
Douglas Corporation
|
Delaware
|
Same
|
Chino
Acquisition Inc.
|
Delaware
|
Same
|
Chino
Mines Company
|
New
Mexico
|
Same
|
Climax
Canada Ltd.
|
Delaware
|
Same
|
Climax
Engineered Materials, LLC
|
Colorado
|
Same
|
Climax
Molybdenum Asia Corporation
|
Delaware
|
Same
|
Climax
Molybdenum B.V.
|
The
Netherlands
|
Same
|
Climax
Molybdenum China Corporation
|
Delaware
|
Same
|
Climax
Molybdenum Company
|
Delaware
|
Same
|
Climax
Molybdenum GmbH
|
Germany
|
Same
|
Climax
Molybdenum Marketing Corporation
|
Delaware
|
Same
|
Climax
Molybdenum U.K. Limited
|
United
Kingdom
|
Same
|
Cobre
Mining Company
|
New
Mexico
|
Same
|
Compania
Contractual Minera Candelaria
|
Chile
|
Same
|
Compania
Contractual Minera Ojos del Salado
|
Chile
|
Same
|
Copper
Market, Inc.
|
Arizona
|
Same
|
Cyprus
Amax Chile Holdings, Inc.
|
Delaware
|
Same
|
Cyprus
Amax Minerals Company
|
Delaware
|
Same
|
Cyprus
Climax Metals Company
|
Delaware
|
Same
|
Cyprus
Copper Marketing Corporation
|
Delaware
|
Same
|
Cyprus
El Abra Corporation
|
Delaware
|
Same
|
Cyprus
Exploration and Development Corporation
|
Delaware
|
Same
|
Cyprus
Metals Company
|
Delaware
|
Same
|
Cyprus
Minera de Chile, Inc.
|
Delaware
|
Same
|
Cyprus
Mines Corporation
|
Delaware
|
Same
|
Cyprus
Specialty Metals Company
|
Delaware
|
Same
|
Cyprus
Tohono Corporation
|
Delaware
|
Same
|
Dodge
& James Insurance Company, Ltd.
|
Bermuda
|
Same
|
FM
Services Company
|
Delaware
|
Same
|
Freeport-McMoRan
Copper & Gold China Corporation
|
Cayman
Islands
|
Same
|
Freeport-McMoRan
Exploration Corporation
|
Delaware
|
Same
|
Habirshaw
Cable and Wire Corporation
|
New
York
|
Same
|
Hidalgo
Mining, LLC
|
New
Mexico
|
Same
|
James
Douglas Insurance Company, Ltd.
|
Bermuda
|
Same
|
Kinetics
Climax, Inc.
|
Delaware
|
Same
|
Makilala
Holding Limited
|
British
Virgin Islands
|
Same
|
Metallic
Ventures, Inc.
|
Nevada
|
Same
|
Minera
Aurex (Chile) Limitada
|
Chile
|
Same
|
Minera
Cyprus Amax Chile Limitada
|
Chile
|
Same
|
Minera
Cyprus Chile Limitada
|
Chile
|
Same
|
Missouri
Lead Smelting Company
|
Delaware
|
Same
|
Mt.
Emmons Mining Company
|
Delaware
|
Same
|
Pacific
Western Land Company
|
California
|
Same
|
PD
Bermuda Finance Company Ltd.
|
Bermuda
|
Same
|
PD
Candelaria, Inc.
|
Delaware
|
Same
|
PD
Cayman Corporation
|
Cayman
Islands
|
Same
|
PD
Chile Finance Company
|
Delaware
|
Same
|
PD
Chile Holding Company Limitada
|
Chile
|
Same
|
PD
Chile Investments, LLC
|
Delaware
|
Same
|
PD
Cobre, Inc.
|
Delaware
|
Same
|
PD
Ojos del Salado, Inc.
|
Delaware
|
Same
|
PD
Peru, Inc.
|
Delaware
|
Same
|
PDM
Energy, L.L.C.
|
Arizona
|
Same
|
Phelps
Dodge Ajo, Inc.
|
Delaware
|
Same
|
Phelps
Dodge Australasia, Inc.
|
Delaware
|
Same
|
Phelps
Dodge Bagdad, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Bagdad
|
Phelps
Dodge Chicago Rod, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Chicago
|
Phelps
Dodge Chino, Inc.
|
Delaware
|
Same
|
Phelps
Dodge Corporation
|
New
York
|
Freeport-McMoRan
Copper & Gold - Phoenix
|
Phelps
Dodge Corporation of Canada, Limited
|
Delaware
|
Same
|
Phelps
Dodge Development Corporation
|
Delaware
|
Same
|
Phelps
Dodge Energy Services, LLC
|
Delaware
|
Same
|
Phelps
Dodge High Performance Conductors of NJ, Inc.
|
New
Jersey
|
Same
|
Phelps
Dodge Industries, Inc.
|
Delaware
|
Same
|
Phelps
Dodge Katanga Corporation
|
Delaware
|
Same
|
Phelps
Dodge Magnet Wire (Austria) GmbH
|
Austria
|
Same
|
Phelps
Dodge Mercantile Company
|
New
York
|
Same
|
Phelps
Dodge Miami, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Miami
|
Phelps
Dodge Mining (Zambia) Limited
|
Zambia
|
Same
|
Phelps
Dodge Mining Services, Inc.
|
Delaware
|
Same
|
Phelps
Dodge Molybdenum Corporation
|
Delaware
|
Same
|
Phelps
Dodge Morenci, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Morenci
|
Phelps
Dodge of Africa, Ltd.
|
Delaware
|
Same
|
Phelps
Dodge Overseas Capital Corporation
|
Delaware
|
Same
|
Phelps
Dodge Power Marketing, LLC
|
Delaware
|
Same
|
Phelps
Dodge Refining Corporation
|
New
York
|
Same
|
Phelps
Dodge Safford, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Safford
|
Phelps
Dodge Sales Company, Incorporated
|
Delaware
|
Freeport-McMoRan
Sales
|
Phelps
Dodge Sierrita, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Sierrita
|
Phelps
Dodge South Africa (Proprietary) Limited
|
South
Africa
|
Same
|
Phelps
Dodge Tyrone, Inc.
|
Delaware
|
Freeport-McMoRan
Copper & Gold - Tyrone
|
PT
Freeport Indonesia
|
Indonesia
& Delaware
|
Same
|
PT
Irja Eastern Minerals
|
Indonesia
|
Same
|
PT
Puncakjaya Power
|
Indonesia
|
Same
|
Silver
Springs Ranch, Inc.
|
Colorado
|
Same
|
Sociedad
Contractual Minera El Abra
|
Chile
|
Same
|
Sociedad
Minera Cerro Verde S.A.
|
Peru
|
Same
|
Soner,
Inc.
|
New
Jersey
|
Same
|
Tenke
Fungurume Mining S.A.R.L.
(a)
|
Congo
|
Same
|
TF
Holdings Limited
(b)
|
Bermuda
|
Same
|
The
Morenci Water & Electric Company
|
Arizona
|
Same
|
Tyrone
Mining, LLC
|
New
Mexico
|
Same
|
United
States Metals Refining Company
|
Delaware
|
Same
|
Western
Nuclear Australia Limited
|
Delaware
|
Same
|
Western
Nuclear, Inc.
|
Delaware
|
Same
|
(a)
|
17.5%
owned by La Générale des Carrières et des
Mines.
|
(b)
|
30%
owned by Tenke Holdings Ltd.
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|