UNITED
STATES
|
||
SECURITIES
AND EXCHANGE COMMISSION
|
||
Washington,
D.C. 20549
|
||
FORM
10-Q
|
||
(Mark
One)
|
||
[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
||
For
the quarterly period ended March 31, 2006
|
||
OR
|
||
[
] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
||
For
the transition period from
|
To
|
|
Commission
File Number: 1-9916
|
||
Freeport-McMoRan
Copper & Gold Inc.
|
||
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
74-2480931
|
(State
or other jurisdiction of
|
(IRS
Employer Identification No.)
|
incorporation
or organization)
|
|
1615
Poydras Street
|
|
New
Orleans, Louisiana
|
70112
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(504)
582-4000
|
|
(Registrant's
telephone number, including area code)
|
|
Page
|
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
14
|
|
Item
2. Management's Discussion and Analysis of
Financial Condition
|
|
and
Results of Operations
|
15
|
Item
3. Quantitative and Qualitative
Disclosures about Market Risk
|
37
|
Item
4. Controls and Procedures
|
38
|
Part
II. Other Information
|
38
|
Item
1. Legal Proceedings
|
38
|
Item
1A. Risk Factors
|
38
|
Item
2. Unregistered Sales of Equity
Securities and Use of Proceeds
|
38
|
Item
6. Exhibits
|
38
|
39
|
|
E-1
|
|
March
31,
|
December
31,
|
|||||||
2006
|
2005
|
|||||||
(In
Thousands)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
284,070
|
$
|
763,599
|
||||
Accounts
receivable
|
616,090
|
687,969
|
||||||
Inventories
|
612,522
|
565,019
|
||||||
Prepaid
expenses and other
|
13,989
|
5,795
|
||||||
Total
current assets
|
1,526,671
|
2,022,382
|
||||||
Property,
plant, equipment and development costs, net
|
3,095,779
|
3,088,931
|
||||||
Deferred
mining costs
|
-
|
285,355
|
||||||
Other
assets
|
114,824
|
119,999
|
||||||
Investment
in PT Smelting
|
58,918
|
33,539
|
||||||
Total
assets
|
$
|
4,796,192
|
$
|
5,550,206
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$
|
433,731
|
$
|
573,560
|
||||
Current
portion of long-term debt and short-term borrowings
|
90,077
|
253,350
|
||||||
Accrued
income taxes
|
56,231
|
327,041
|
||||||
Rio
Tinto share of joint venture cash flows
|
33,015
|
125,809
|
||||||
Unearned
customer receipts
|
32,746
|
57,184
|
||||||
Accrued
interest payable
|
12,980
|
32,034
|
||||||
Total
current liabilities
|
658,780
|
1,368,978
|
||||||
Long-term
debt, less current portion:
|
||||||||
Senior
notes
|
612,900
|
624,365
|
||||||
Convertible
senior notes
|
312,667
|
323,667
|
||||||
Equipment
and other loans
|
51,171
|
54,529
|
||||||
Atlantic
Copper debt
|
34,455
|
37
|
||||||
Total
long-term debt, less current portion
|
1,011,193
|
1,002,598
|
||||||
Accrued
postretirement benefits and other liabilities
|
217,228
|
210,259
|
||||||
Deferred
income taxes
|
831,113
|
902,386
|
||||||
Minority
interests
|
215,601
|
222,991
|
||||||
Stockholders’
equity:
|
||||||||
Convertible
perpetual preferred stock
|
1,100,000
|
1,100,000
|
||||||
Class
B common stock
|
29,898
|
29,696
|
||||||
Capital
in excess of par value of common stock
|
2,303,626
|
2,212,246
|
||||||
Retained
earnings
|
1,035,300
|
1,086,191
|
||||||
Accumulated
other comprehensive income
|
11,989
|
10,749
|
||||||
Common
stock held in treasury
|
(2,618,536
|
)
|
(2,595,888
|
)
|
||||
Total
stockholders’ equity
|
1,862,277
|
1,842,994
|
||||||
Total
liabilities and stockholders’ equity
|
$
|
4,796,192
|
$
|
5,550,206
|
Three
Months Ended
March
31,
|
||||||
2006
|
2005
|
|||||
(In
Thousands, Except Per Share Amounts)
|
||||||
Revenues
|
$
|
1,086,122
|
$
|
803,065
|
||
Cost
of sales:
|
||||||
Production
and delivery
|
477,915
|
365,006
|
||||
Depreciation
and amortization
|
43,250
|
56,926
|
||||
Total
cost of sales
|
521,165
|
421,932
|
||||
Exploration
expenses
|
2,576
|
1,920
|
||||
General
and administrative expenses
|
30,631
|
21,614
|
||||
Total
costs and expenses
|
554,372
|
445,466
|
||||
Operating
income
|
531,750
|
357,599
|
||||
Equity
in PT Smelting earnings
|
3,559
|
2,596
|
||||
Interest
expense, net
|
(22,671
|
)
|
(37,548
|
)
|
||
(Losses)
gains on early extinguishment and conversion of debt
|
(1,973
|
)
|
37
|
|||
Other
income, net
|
4,958
|
7,952
|
||||
Income
before income taxes and minority interests
|
515,623
|
330,636
|
||||
Provision
for income taxes
|
(221,722
|
)
|
(164,028
|
)
|
||
Minority
interests in net income of consolidated subsidiaries
|
(27,126
|
)
|
(21,088
|
)
|
||
Net
income
|
266,775
|
145,520
|
||||
Preferred
dividends
|
(15,125
|
)
|
(15,125
|
)
|
||
Net
income applicable to common stock
|
$
|
251,650
|
$
|
130,395
|
||
Net
income per share of common stock:
|
||||||
Basic
|
$1.34
|
$0.73
|
||||
Diluted
|
$1.23
|
$0.70
|
||||
Average
common shares outstanding:
|
||||||
Basic
|
187,916
|
179,320
|
||||
Diluted
|
221,477
|
200,126
|
||||
Dividends
paid per share of common stock
|
$0.8125
|
$0.75
|
||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2006
|
2005
|
|||||||
(In
Thousands)
|
||||||||
Cash
flow from operating activities:
|
||||||||
Net
income
|
$
|
266,775
|
$
|
145,520
|
||||
Adjustments
to reconcile net income to net cash (used in) provided by
|
||||||||
operating
activities:
|
||||||||
Depreciation
and amortization
|
43,250
|
56,926
|
||||||
Minority
interests’ share of net income
|
27,126
|
21,088
|
||||||
Stock-based
compensation
|
9,637
|
940
|
||||||
Long-term
compensation and postretirement benefits
|
7,416
|
4,251
|
||||||
Losses
(gains) on early extinguishment and conversion of debt
|
1,973
|
(37
|
)
|
|||||
Deferred
income taxes
|
41,886
|
(12,020
|
)
|
|||||
Equity
in PT Smelting earnings
|
(3,559
|
)
|
(2,596
|
)
|
||||
Increase
in deferred mining costs
|
-
|
(32,219
|
)
|
|||||
(Recognition)
elimination of profit on PT Freeport Indonesia sales
|
||||||||
to
PT Smelting
|
(20,828
|
)
|
2,576
|
|||||
Provision
for inventory obsolescence
|
1,500
|
1,500
|
||||||
Other
|
2,190
|
(500
|
)
|
|||||
(Increases)
decreases in working capital:
|
||||||||
Accounts
receivable
|
65,150
|
34,774
|
||||||
Inventories
|
(40,318
|
)
|
18,997
|
|||||
Prepaid
expenses and other
|
(7,284
|
)
|
(6,901
|
)
|
||||
Accounts
payable and accrued liabilities
|
(157,573
|
)
|
(73,027
|
)
|
||||
Rio
Tinto share of joint venture cash flows
|
(92,794
|
)
|
2,493
|
|||||
Accrued
income taxes
|
(268,300
|
)
|
473
|
|||||
Increase
in working capital
|
(501,119
|
)
|
(23,191
|
)
|
||||
Net
cash (used in) provided by operating activities
|
(123,753
|
)
|
162,238
|
|||||
Cash
flow from investing activities:
|
||||||||
PT
Freeport Indonesia capital expenditures
|
(48,609
|
)
|
(23,522
|
)
|
||||
Atlantic
Copper and other capital expenditures
|
(3,513
|
)
|
(2,724
|
)
|
||||
Sale
of assets
|
2,003
|
-
|
||||||
Investment
in PT Smelting and other
|
(317
|
)
|
(85
|
)
|
||||
Proceeds
from insurance settlement
|
-
|
2,016
|
||||||
Net
cash used in investing activities
|
(50,436
|
)
|
(24,315
|
)
|
||||
Cash
flow from financing activities:
|
||||||||
Proceeds
from debt
|
55,509
|
37,428
|
||||||
Repayments
of debt
|
(201,016
|
)
|
(220,245
|
)
|
||||
Redemption
of step-up preferred stock
|
-
|
(215
|
)
|
|||||
Cash
dividends paid:
|
||||||||
Common
stock
|
(153,155
|
)
|
(134,740
|
)
|
||||
Preferred
stock
|
(15,125
|
)
|
(15,126
|
)
|
||||
Minority
interests
|
(18,744
|
)
|
(47,431
|
)
|
||||
Net
proceeds from exercised stock options
|
11,140
|
1,511
|
||||||
Excess
tax benefit from exercised stock options
|
16,057
|
-
|
||||||
Other
|
(6
|
)
|
(13
|
)
|
||||
Net
cash used in financing activities
|
(305,340
|
)
|
(378,831
|
)
|
||||
Net
decrease in cash and cash equivalents
|
(479,529
|
)
|
(240,908
|
)
|
||||
Cash
and cash equivalents at beginning of year
|
763,599
|
551,450
|
||||||
Cash
and cash equivalents at end of period
|
$
|
284,070
|
$
|
310,542
|
1. |
BASIS
OF PRESENTATION
|
2. |
STOCK-BASED
COMPENSATION
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2005
|
||||||
Stock
options awarded to employees (including directors)
|
$
|
9,028
|
$
|
508
|
a
|
||
Stock
options awarded to nonemployees
|
456
|
319
|
|||||
Restricted
stock units in lieu of cash awards
|
2,478
|
3,021
|
|||||
Stock
appreciation rights
|
1,279
|
529
|
|||||
Total
compensation cost
|
13,241
|
4,377
|
|||||
Tax
benefit
|
(4,904
|
)
|
(1,302
|
)
|
|||
Minority
interest share
|
(722
|
)
|
(194
|
)
|
|||
Impact
on net income
|
$
|
7,615
|
$
|
2,881
|
|||
a. |
Represents
amortization of the intrinsic value of FCX’s Class A stock options that
were converted to Class B stock options in
2002.
|
Net
income applicable to common stock, as reported
|
$
|
130,395
|
||
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
|
2,559
|
|||
Deduct:
Total stock-based employee compensation
|
||||
expense
determined under fair value-based method
|
||||
for
all awards, net of taxes and minority interests
|
(5,415
|
)
|
||
Pro
forma net income applicable to common stock
|
$
|
127,539
|
||
Earnings
per share:
|
||||
Basic
- as reported
|
$
|
0.73
|
||
Basic
- pro forma
|
$
|
0.71
|
||
Diluted
- as reported
|
$
|
0.70
|
||
Diluted
- pro forma
|
$
|
0.67
|
||
Fair
value per stock option
|
$
|
13.99
|
||
Risk-free
interest rate
|
3.9
|
%
|
||
Expected
volatility rate
|
46
|
%
|
||
Expected
life of options (in years)
|
6
|
|||
Assumed
annual dividend
|
$
|
1.00
|
Weighted
|
||||||||||
Average
|
Aggregate
|
|||||||||
Weighted
|
Remaining
|
Intrinsic
|
||||||||
Number
of
|
Average
|
Contractual
|
Value
|
|||||||
Options
|
Option
Price
|
Term
(years)
|
($000)
|
|||||||
Balance
at January 1
|
7,355,612
|
$
|
31.43
|
|||||||
Granted
|
1,016,250
|
63.77
|
||||||||
Exercised
|
(1,565,336
|
)
|
21.89
|
|||||||
Expired/Forfeited
|
(7,500
|
)
|
30.81
|
|||||||
Balance
at March 31
|
6,799,026
|
38.47
|
8.25
|
$
|
148,904
|
|||||
Vested
and exercisable at March 31
|
1,473,481
|
29.62
|
7.38
|
$
|
44,425
|
|||||
Expected
volatility
|
33.3%-42.2
|
%
|
||
Weighted
average volatility
|
37.7
|
%
|
||
Expected
life of options (in years)
|
4.0
|
|||
Expected
dividend rate
|
2.9
|
%
|
||
Risk-free
interest rate
|
4.4
|
%
|
Weighted
|
|||||||
Average
|
Aggregate
|
||||||
Number
of
|
Remaining
|
Intrinsic
|
|||||
Restricted
|
Contractual
|
Value
|
|||||
Stock
Units
|
Term
(years)
|
($000)
|
|||||
Balance
at January 1
|
317,258
|
||||||
Granted
|
332,677
|
||||||
Vested
|
(131,301
|
)
|
|||||
Forfeited
|
-
|
||||||
Balance
at March 31
|
518,634
|
2.29
|
$
|
30,999
|
|||
3. |
DEFERRED
MINING COSTS
|
4. |
EARNINGS
PER SHARE
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2005
|
||||||
Net
income before preferred dividends
|
$
|
266,775
|
$
|
145,520
|
|||
Preferred
dividends
|
(15,125
|
)
|
(15,125
|
)
|
|||
Net
income applicable to common stock
|
251,650
|
130,395
|
|||||
Plus
income impact of assumed conversion of:
|
|||||||
5½%
Convertible Perpetual Preferred Stock
|
15,125
|
-
|
|||||
7%
Convertible Senior Notes
|
5,101
|
10,323
|
|||||
Diluted
net income applicable to common stock
|
$
|
271,876
|
$
|
140,718
|
|||
Weighted
average common shares outstanding
|
187,916
|
179,320
|
|||||
Add:
|
|||||||
Shares
issuable upon conversion, exercise or vesting of:
|
|||||||
5½%
Convertible Perpetual Preferred Stock
|
21,732
|
-
|
|||||
7%
Convertible Senior Notes
|
10,159
|
18,625
|
|||||
Dilutive
stock options
|
1,052
|
1,701
|
|||||
Restricted
stock
|
618
|
480
|
|||||
Weighted
average common shares outstanding for purposes of
calculating
|
|||||||
diluted
net income per share
|
221,477
|
200,126
|
|||||
Diluted
net income per share of common stock
|
$
|
1.23
|
$
|
0.70
|
|||
Three
Months Ended March 31,
|
|||||
2006
|
2005
|
||||
Weighted
average outstanding options
|
677,500
|
-
|
|||
Weighted
average exercise price
|
$63.77
|
-
|
|||
Dividends
on 5½% Convertible Perpetual Preferred Stock
|
-
|
$15,125
|
|||
Weighted
average shares issuable upon conversion
|
-
|
20,915
|
5. |
INVENTORIES
|
March
31,
|
December
31,
|
|||||||
2006
|
2005
|
|||||||
PT
Freeport Indonesia:
|
Concentrates
and stockpiles -
|
|||||||
Average
cost
|
$
|
5,466
|
$
|
14,723
|
||||
Atlantic
Copper:
|
Concentrates
- First in, first out (FIFO)
|
130,966
|
137,740
|
|||||
Work
in process - FIFO
|
184,729
|
144,951
|
||||||
Finished
goods - FIFO
|
1,214
|
2,975
|
||||||
Total
product inventories
|
322,375
|
300,389
|
||||||
Total
materials and supplies, net
|
290,147
|
264,630
|
||||||
Total
inventories
|
$
|
612,522
|
$
|
565,019
|
||||
6. |
DEBT
AND EQUITY TRANSACTIONS
|
7. |
EMPLOYEE
BENEFITS
|
FCX
|
PT
Freeport Indonesia
|
Atlantic
Copper
|
||||||||||||||||
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
|||||||||||||
Service
cost
|
$
|
109
|
$
|
179
|
$
|
946
|
$
|
931
|
$
|
-
|
$
|
-
|
||||||
Interest
cost
|
398
|
518
|
1,226
|
972
|
1,114
|
1,289
|
||||||||||||
Expected
return on plan assets
|
340
|
(22
|
)
|
(609
|
)
|
(365
|
)
|
-
|
-
|
|||||||||
Amortization
of prior service cost
|
1,051
|
944
|
234
|
232
|
-
|
-
|
||||||||||||
Amortization
of net actuarial loss
|
14
|
-
|
134
|
184
|
221
|
241
|
||||||||||||
Net
periodic benefit cost
|
$
|
1,912
|
$
|
1,619
|
$
|
1,931
|
$
|
1,954
|
$
|
1,335
|
$
|
1,530
|
8. |
INTEREST
COST
|
Mining
and
Exploration
|
Smelting
and Refining
|
Eliminations and
Other
|
FCX
Total
|
||||||||||
(In
Thousands)
|
|||||||||||||
Three
months ended March 31, 2006:
|
|||||||||||||
Revenues
|
$
|
796,783
|
a
|
$
|
516,104
|
$
|
(226,765
|
)
|
$
|
1,086,122
|
|||
Production
and delivery
|
286,677
|
491,437
|
(300,199
|
)b
|
477,915
|
||||||||
Depreciation
and amortization
|
33,773
|
7,406
|
2,071
|
43,250
|
|||||||||
Exploration
expenses
|
2,537
|
-
|
39
|
2,576
|
|||||||||
General
and administrative expenses
|
82,306
|
c
|
3,775
|
(55,450
|
)c
|
30,631
|
|||||||
Operating
income
|
$
|
391,490
|
$
|
13,486
|
$
|
126,774
|
$
|
531,750
|
|||||
Equity
in PT Smelting earnings
|
$
|
-
|
$
|
3,559
|
$
|
-
|
$
|
3,559
|
|||||
Interest
expense, net
|
$
|
3,273
|
$
|
5,447
|
$
|
13,951
|
$
|
22,671
|
|||||
Provision
for income taxes
|
$
|
144,691
|
$
|
-
|
$
|
77,031
|
$
|
221,722
|
|||||
Capital
expenditures
|
$
|
48,940
|
$
|
3,513
|
$
|
(331
|
)
|
$
|
52,122
|
||||
Total
assets
|
$
|
3,729,867
|
d
|
$
|
963,594
|
e
|
$
|
102,731
|
$
|
4,796,192
|
|||
Three
months ended March 31, 2005:
|
|||||||||||||
Revenues
|
$
|
687,398
|
a
|
$
|
272,116
|
$
|
(156,449
|
)
|
$
|
803,065
|
|||
Production
and delivery
|
193,878
|
263,577
|
(92,449
|
)b
|
365,006
|
||||||||
Depreciation
and amortization
|
46,925
|
7,089
|
2,912
|
56,926
|
|||||||||
Exploration
expenses
|
1,892
|
-
|
28
|
1,920
|
|||||||||
General
and administrative expenses
|
33,182
|
c
|
3,004
|
(14,572
|
)c
|
21,614
|
|||||||
Operating
income (loss)
|
$
|
411,521
|
$
|
(1,554
|
)
|
$
|
(52,368
|
)
|
$
|
357,599
|
|||
Equity
in PT Smelting earnings
|
$
|
-
|
$
|
2,596
|
$
|
-
|
$
|
2,596
|
|||||
Interest
expense, net
|
$
|
5,727
|
$
|
3,805
|
$
|
28,016
|
$
|
37,548
|
|||||
Provision
for income taxes
|
$
|
145,319
|
$
|
-
|
$
|
18,709
|
$
|
164,028
|
|||||
Capital
expenditures
|
$
|
23,569
|
$
|
2,724
|
$
|
(47
|
)
|
$
|
26,246
|
||||
Total
assets
|
$
|
3,849,871
|
d
|
$
|
771,158
|
e
|
$
|
168,674
|
$
|
4,789,703
|
|||
a. |
Includes
PT Freeport Indonesia’s sales to PT Smelting totaling $282.5 million in
the 2006 quarter and $234.2 million in the 2005
quarter.
|
b. |
Includes
deferral (recognition) of intercompany profits on 25 percent of PT
Freeport Indonesia’s sales to PT Smelting, for which the final sale to
third parties has not occurred, totaling $(20.8) million in the 2006
quarter and $2.6 million in the 2005
quarter.
|
c. |
Includes
charges to the mining and exploration segment for the in-the-money
value
of FCX stock option exercises which are eliminated in consolidation
totaling $56.0 million in the 2006 quarter and $16.8 million in the
2005
quarter.
|
d. |
Includes
PT Freeport Indonesia’s trade receivables with PT Smelting totaling $149.6
million at March 31, 2006, and $120.4 million at March 31,
2005.
|
e. |
Includes
PT Freeport Indonesia’s equity investment in PT Smelting totaling $58.9
million at March 31, 2006, and $47.8 million at March 31,
2005.
|
Three
Months Ended March 31,
|
||||||
2006
|
2005
|
|||||
Net
income
|
$
|
266,775
|
$
|
145,520
|
||
Other
comprehensive income (loss):
|
||||||
Change
in unrealized derivatives’ fair value, net of
|
||||||
taxes
of $1.6 million for 2006 and $0.2 million for 2005
|
2,040
|
(298
|
)
|
|||
Reclass
to earnings, net of taxes of $0.6 million for 2006
|
(715
|
)
|
97
|
|||
Minimum
pension liability adjustment
|
(86
|
)
|
(315
|
)
|
||
Total
comprehensive income
|
$
|
268,014
|
$
|
145,004
|
||
11. |
RATIO
OF EARNINGS TO FIXED CHARGES
|
* |
Excludes
Shanghai stocks, producer, consumer and merchant
stocks.
|
First
Quarter
|
||||||
2006
|
2005
|
|||||
Revenues
|
$
|
1,086.1
|
$
|
803.1
|
||
Operating
income
|
531.8
|
357.6
|
||||
Net
income applicable to common stock
|
251.7
|
130.4
|
||||
Diluted
net income per share of common stock
|
1.23
|
0.70
|
Three
Months Ended
|
||||||
March
31,
|
||||||
2006
|
2005
|
|||||
Mining
and exploration segment operating incomea
|
$
|
447,527
|
$
|
428,307
|
||
Mining
and exploration segment interest expense, net
|
(3,273
|
)
|
(5,727
|
)
|
||
Intercompany
operating profit recognized (deferred)
|
74,211
|
(63,570
|
)
|
|||
Income
before taxes
|
518,465
|
359,010
|
||||
Indonesian
corporate income tax rate
|
35
|
%
|
35
|
%
|
||
Corporate
income taxes
|
181,463
|
125,654
|
||||
Approximate
PT Freeport Indonesia net income
|
337,002
|
233,356
|
||||
Withholding
tax on FCX’s equity share
|
9.064
|
%
|
9.064
|
%
|
||
Withholding
taxes
|
30,546
|
21,151
|
||||
PT
Indocopper Investama corporate income tax
|
5,623
|
14,124
|
||||
Other,
net
|
4,090
|
3,099
|
||||
FCX
consolidated provision for income taxes
|
$
|
221,722
|
$
|
164,028
|
||
FCX
consolidated effective tax rate
|
43
|
%
|
50
|
%
|
||
a. |
Excludes
charges for the in-the-money value of FCX stock option exercises,
which
are eliminated in consolidation, totaling $56.0 million for the 2006
quarter and $16.8 million for the 2005
quarter.
|
First
Quarter
|
||||||
2006
|
2005
|
|||||
Mining
and explorationa
|
$
|
391.5
|
$
|
411.5
|
||
Smelting
and refining
|
13.5
|
(1.6
|
)
|
|||
Intercompany
eliminations and othera,
b
|
126.8
|
(52.3
|
)
|
|||
FCX
operating income
|
$
|
531.8
|
$
|
357.6
|
||
a. |
Includes
charges to the mining and exploration segment for the in-the-money
value
of FCX stock option exercises which are eliminated in consolidation
totaling $56.0 million in the 2006 quarter and $16.8 million in the
2005
quarter.
|
b. |
We
defer recognizing profits on PT Freeport Indonesia’s sales to Atlantic
Copper and on 25 percent of PT Freeport Indonesia’s sales to PT Smelting
until their sales of final products to third parties. Changes in
the
amount of these deferred profits impacted operating income by $74.2
million in the 2006 quarter and $(63.6) million in the 2005 quarter.
Our
consolidated earnings can fluctuate materially depending on the timing
and
prices of these sales. At March 31, 2006, our deferred profits to
be
recognized in future periods’ operating income totaled $148.4 million,
$78.7 million to net income, after taxes and minority interest
sharing.
|
First
Quarter
|
|||||||
2006
|
2005
|
||||||
PT
Freeport Indonesia Operating Data, Net of Rio Tinto’s
Interest
|
|||||||
Copper
(recoverable)
|
|||||||
Production
(000s of pounds)
|
221,300
|
335,600
|
|||||
Production
(metric tons)
|
100,400
|
152,200
|
|||||
Sales
(000s of pounds)
|
225,200
|
328,100
|
|||||
Sales
(metric tons)
|
102,100
|
148,800
|
|||||
Average
realized price per pound
|
$2.43
|
$1.51
|
|||||
Gold
(recoverable ounces)
|
|||||||
Production
|
461,800
|
609,400
|
|||||
Sales
|
472,500
|
595,300
|
|||||
Average
realized price per ounce
|
$405.54
|
a
|
$426.74
|
a. |
Amount
was $556.00 before a loss resulting from redemption of FCX’s
Gold-Denominated Preferred Stock, Series
II.
|
First
Quarter
|
|||||||
2006
|
2005
|
PT
Freeport Indonesia, 100% Aggregate Operating Data
|
|||||||
Ore
milled (metric tons per day)
|
216,800
|
199,400
|
|||||
Average
ore grade
|
|||||||
Copper
(percent)
|
0.72
|
1.14
|
|||||
Gold
(grams per metric ton)
|
0.92
|
1.62
|
|||||
Recovery
rates (percent)
|
|||||||
Copper
|
82.5
|
89.6
|
|||||
Gold
|
80.6
|
82.7
|
|||||
Copper
(recoverable)
|
|||||||
Production
(000s of pounds)
|
246,600
|
390,300
|
|||||
Production
(metric tons)
|
111,900
|
177,000
|
|||||
Sales
(000s of pounds)
|
251,300
|
381,400
|
|||||
Sales
(metric tons)
|
114,000
|
173,000
|
|||||
Gold
(recoverable ounces)
|
|||||||
Production
|
470,700
|
763,900
|
|||||
Sales
|
486,300
|
743,200
|
|||||
2006
|
|||
PT
Freeport Indonesia revenues - prior year period
|
$
|
687.4
|
|
Price
realizations:
|
|||
Copper
|
206.4
|
||
Gold
|
(10.0
|
)
|
|
Sales
volumes:
|
|||
Copper
|
(155.7
|
)
|
|
Gold
|
(52.4
|
)
|
|
Adjustments,
primarily for copper pricing on prior year
|
|||
open
sales
|
128.5
|
||
Treatment
charges, royalties and other
|
(7.4
|
)
|
|
PT
Freeport Indonesia revenues - current year period
|
$
|
796.8
|
|
First
Quarter
|
||||
2006
|
2005
|
|||
Grasberg
open pit
|
173,000
|
157,300
|
||
Deep
Ore Zone underground mine
|
43,800
|
42,100
|
||
Total
mill throughput
|
216,800
|
199,400
|
||
Gross
Profit per Pound of Copper (¢)/per Ounce of Gold and Silver
($)
|
||||||||||||
Three
Months Ended March 31, 2006
|
||||||||||||
Pounds
of copper sold (000s)
|
225,200
|
225,200
|
||||||||||
Ounces
of gold sold
|
472,500
|
|||||||||||
Ounces
of silver sold
|
707,100
|
|||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Gold
|
Silver
|
|||||||||
Revenues,
after adjustments shown below
|
242.9
|
¢
|
242.9
|
¢
|
$405.54
|
a
|
$9.76
|
|||||
Site
production and delivery, before net non-
|
||||||||||||
cash
and nonrecurring costs shown below
|
122.1
|
79.6
|
197.43
|
3.62
|
||||||||
Gold
and silver credits
|
(129.0
|
)
|
-
|
-
|
-
|
|||||||
Treatment
charges
|
37.1
|
b
|
24.2
|
c
|
60.05
|
c
|
1.10
|
c
|
||||
Royalty
on metals
|
8.9
|
5.8
|
14.31
|
0.26
|
||||||||
Unit
net cash costsd
|
39.1
|
109.6
|
271.79
|
4.98
|
||||||||
Depreciation
and amortization
|
15.0
|
9.8
|
24.25
|
0.44
|
||||||||
Noncash
and nonrecurring costs, net
|
5.2
|
3.4
|
8.38
|
0.15
|
||||||||
Total
unit costs
|
59.3
|
122.8
|
304.42
|
5.57
|
||||||||
Revenue
adjustments, primarily for pricing on
|
||||||||||||
prior
period open sales
|
28.0
|
e
|
58.7
|
47.03
|
1.20
|
|||||||
PT
Smelting intercompany profit recognized
|
9.2
|
6.0
|
14.95
|
0.27
|
||||||||
Gross
profit per pound/ounce
|
220.8
|
¢
|
184.8
|
¢
|
$163.10
|
$5.66
|
||||||
a. |
Amount
was $556.00 before a loss resulting from redemption of FCX’s
Gold-Denominated Preferred Stock, Series
II.
|
b. |
Includes
$10.1 million or 4.5 cents per pound for adjustments to December
31, 2005
concentrate sales subject to final pricing to reflect the impact
on
treatment charges resulting from the increase in copper prices since
December 31, 2005.
|
c. |
Includes
$6.6 million or 2.9 cents per pound for copper, $3.4 million or $7.25
per ounce for gold and $0.1 million or $0.13 per ounce for silver
for
adjustments to December 31, 2005 concentrate sales subject to final
pricing to reflect the impact on treatment charges resulting from
the
increase in copper prices since December 31,
2005.
|
d. |
For
a reconciliation of unit net cash costs to production and delivery
costs
applicable to sales reported in FCX’s consolidated financial statements
refer to “Product Revenues and Production
Costs.”
|
e. |
Includes
a $69.0 million or 30.6 cents per pound loss on the redemption of
FCX’s
Gold-Denominated Preferred Stock, Series
II.
|
Three
Months Ended March 31, 2005
|
||||||||||||
Pounds
of copper sold (000s)
|
328,100
|
328,100
|
||||||||||
Ounces
of gold sold
|
595,300
|
|||||||||||
Ounces
of silver sold
|
1,270,300
|
|||||||||||
By-Product
|
Co-Product
Method
|
|||||||||||
Method
|
Copper
|
Gold
|
Silver
|
|||||||||
Revenues,
after adjustments shown below
|
151.3
|
¢
|
151.3
|
¢
|
$426.74
|
$7.04
|
||||||
Site
production and delivery, before net non-
|
||||||||||||
cash
and nonrecurring costs shown below
|
58.9
|
a
|
38.8
|
b
|
107.20
|
b
|
1.82
|
b
|
||||
Gold
and silver credits
|
(79.3
|
)
|
-
|
-
|
-
|
|||||||
Treatment
charges
|
21.8
|
14.3
|
39.63
|
0.67
|
||||||||
Royalty
on metals
|
5.7
|
3.8
|
10.41
|
0.18
|
||||||||
Unit
net cash costsc
|
7.1
|
56.9
|
157.24
|
2.67
|
||||||||
Depreciation
and amortization
|
14.3
|
9.4
|
26.02
|
0.44
|
||||||||
Noncash
and nonrecurring costs, net
|
0.2
|
0.1
|
0.29
|
-
|
||||||||
Total
unit costs
|
21.6
|
66.4
|
183.55
|
3.11
|
||||||||
Revenue
adjustments, primarily for pricing on
|
||||||||||||
prior
period open sales
|
6.4
|
6.4
|
(5.10
|
)
|
0.11
|
|||||||
PT
Smelting intercompany profit elimination
|
(0.8
|
)
|
(0.5
|
)
|
(1.43
|
)
|
(0.02
|
)
|
||||
Gross
profit per pound/ounce
|
135.3
|
¢
|
90.8
|
¢
|
$236.66
|
$4.02
|
||||||
a. |
Net
of deferred mining costs totaling $32.2 million or 9.8 cents per
pound.
Following adoption of EITF 04-6 on January 1, 2006 (see Note 3 and
“New
Accounting Standards”), stripping costs are no longer
deferred.
|
b. |
Net
of deferred mining costs totaling $21.2 million or 6.5 cents per
pound for
copper, $10.6 million or $17.86 per ounce for gold and $0.4 million
or
$0.30 per ounce for silver (see Note a
above).
|
c. |
See
Note d above.
|
Atlantic
Copper Operating Results
|
||||
(In
Millions)
|
First
Quarter
|
|||
2006
|
2005
|
|||
Gross
profit
|
$17.3
|
$1.5
|
||
Add
depreciation and amortization expense
|
7.4
|
7.1
|
||
Other
|
(0.4
|
)
|
1.0
|
|
Cash
margin
|
$24.3
|
$9.6
|
||
Operating
income (loss) (in millions)
|
$13.5
|
$(1.6
|
) | |
Concentrate
and scrap treated (metric tons)
|
250,700
|
215,800
|
||
Anodes
production (000s of pounds)
|
157,100
|
147,400
|
||
Treatment
rates per pound
|
$0.29
|
$0.17
|
||
Cathodes
sales (000s of pounds)
|
136,600
|
132,600
|
||
Cathode
cash unit cost per pounda
|
$0.20
|
$0.17
|
||
Gold
sales in anodes and slimes (ounces)
|
245,600
|
67,300
|
a. |
For
a reconciliation of cathode cash unit cost per pound to production
costs
applicable to sales reported in FCX’s consolidated financial statements
refer to “Product Revenues and Production Costs”
below.
|
First
Quarter
|
||||||
(In
Millions)
|
2006
|
2005
|
||||
PT
Freeport Indonesia sales to PT Smelting
|
$
|
282.5
|
$
|
234.2
|
||
Equity
in PT Smelting earnings
|
3.6
|
2.6
|
||||
PT
Freeport Indonesia operating profits recognized (deferred)
|
20.8
|
(2.6
|
)
|
2006
|
2007
|
2008
|
2009
|
2010
|
Thereafter
|
|||||||||||||
Equipment
loans and other
|
$
|
10.1
|
$
|
13.5
|
$
|
13.5
|
$
|
13.5
|
$
|
10.2
|
$
|
3.8
|
||||||
7.50%
Senior Notes due 2006
|
55.4
|
-
|
-
|
-
|
-
|
-
|
||||||||||||
Atlantic
Copper debt
|
8.7
|
34.5
|
-
|
-
|
-
|
-
|
||||||||||||
Redeemable
preferred stock
|
12.5
|
-
|
-
|
-
|
-
|
-
|
||||||||||||
10⅛%
Senior Notes due 2010
|
-
|
-
|
-
|
-
|
272.4
|
-
|
||||||||||||
7%
Convertible Senior Notes due 2011a
|
-
|
-
|
-
|
-
|
-
|
312.7
|
||||||||||||
6⅞%
Senior Notes due 2014
|
-
|
-
|
-
|
-
|
-
|
340.3
|
||||||||||||
7.20%
Senior Notes due 2026
|
-
|
-
|
-
|
-
|
-
|
0.2
|
||||||||||||
Total
debt maturities
|
$
|
86.7
|
$
|
48.0
|
$
|
13.5
|
$
|
13.5
|
$
|
282.6
|
$
|
657.0
|
||||||
Pro
forma adjustments
|
15.5
|
b
|
-
|
-
|
-
|
-
|
(5.0
|
)c
|
||||||||||
Pro
forma debt maturities
|
$
|
102.2
|
$
|
48.0
|
$
|
13.5
|
$
|
13.5
|
$
|
282.6
|
$
|
652.0
|
a. |
Conversion
price is $30.87 per share.
|
b. |
Represents
the additional amount due above the original issue amount of our
Silver-Denominated Preferred Stock. We calculated the adjustment
using the
March 31, 2006, London silver fixing price for one ounce of silver
($11.76) in the London bullion market (which determines the
Silver-Denominated Preferred Stock redemption
amount).
|
c. |
Includes
the 7% Convertible Senior Notes due 2011 that we induced conversion
of in
April 2006 (see above).
|
Three
Months Ended
March
31,
|
|||||||
2006
|
2005
|
||||||
Production
and delivery costs
|
$
|
6,077
|
$
|
1,294
|
|||
General
and administrative expenses
|
6,737
|
a
|
3,083
|
a,
b
|
|||
Exploration
expenses
|
427
|
-
|
|||||
Total
stock-based compensation cost
|
$
|
13,241
|
$
|
4,377
|
|||
a. |
Amounts
are before Rio Tinto’s share of joint venture reimbursements for employee
exercises of in-the-money stock options which reduced general and
administrative expenses by $4.5 million in the 2006 quarter and $2.9
million in the 2005 quarter.
|
b. |
Includes
$0.5 million for amortization of the intrinsic value of FCX’s Class A
stock options that were converted to Class B stock options in
2002.
|
1. |
We
show adjustments to copper revenues for prior period open sales as
separate line items. Because such copper pricing adjustments do not
result
from current period sales, we have reflected these separately from
revenues on current period sales.
|
2. |
Noncash
and nonrecurring costs, which consist of items such as stock-based
compensation costs starting January 1, 2006, write-offs of equipment
or
unusual charges, have not been material. They are removed from site
production and delivery costs in the calculation of unit net cash
costs.
|
3. |
Gold
and silver revenues, excluding any impacts from redemption of our
gold-and
silver-denominated preferred stocks, are reflected as credits against
site
production and delivery costs in the by-product
method.
|
Three
Months Ended March 31, 2006
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
(In
Thousands)
|
Method
|
Copper
|
Gold
|
Silver
|
Total
|
||||||||||
Revenues,
after adjustments shown below
|
$
|
543,138
|
$
|
543,138
|
$
|
282,799
|
$
|
7,757
|
$
|
833,694
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
275,008
|
179,163
|
93,286
|
2,559
|
275,008
|
||||||||||
Gold
and silver credits
|
(290,556
|
)
|
-
|
-
|
-
|
-
|
|||||||||
Treatment
charges
|
83,642
|
a
|
54,491
|
b
|
28,373
|
b
|
778
|
b
|
83,642
|
||||||
Royalty
on metals
|
19,935
|
12,988
|
6,762
|
185
|
19,935
|
||||||||||
Unit
net cash costs
|
88,029
|
246,642
|
128,421
|
3,522
|
378,585
|
||||||||||
Depreciation
and amortization
|
33,773
|
22,003
|
11,456
|
314
|
33,773
|
||||||||||
Noncash
and nonrecurring costs, net
|
11,669
|
7,602
|
3,958
|
109
|
11,669
|
||||||||||
Total
unit costs
|
133,471
|
276,247
|
143,835
|
3,945
|
424,027
|
||||||||||
Revenue
adjustments, primarily for pricing on
|
|||||||||||||||
prior
period open sales and gold hedging
|
66,666
|
135,628
|
(68,962
|
)
|
-
|
66,666
|
|||||||||
PT
Smelting intercompany profit recognized
|
20,828
|
13,569
|
7,065
|
194
|
20,828
|
||||||||||
Gross
profit
|
$
|
497,161
|
$
|
416,088
|
$
|
77,067
|
$
|
4,006
|
$
|
497,161
|
Reconciliation
to Amounts Reported
|
|||||||||||||||
(In
Thousands)
|
Revenues
|
Production
and Delivery
|
Depreciation
and Amortization
|
||||||||||||
Totals
presented above
|
$
|
833,694
|
$
|
275,008
|
$
|
33,773
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
11,669
|
N/A
|
||||||||||||
Less:
Treatment charges per above
|
(83,642
|
)
|
N/A
|
N/A
|
|||||||||||
Royalty per above
|
(19,935
|
)
|
N/A
|
N/A
|
|||||||||||
Revenue
adjustments, primarily for pricing on
|
|||||||||||||||
prior
period open sales and hedging per above
|
66,666
|
N/A
|
N/A
|
||||||||||||
Mining
and exploration segment
|
796,783
|
286,677
|
33,773
|
||||||||||||
Smelting
and refining segment
|
516,104
|
491,437
|
7,406
|
||||||||||||
Eliminations
and other
|
(226,765
|
)
|
(300,199
|
)
|
2,071
|
||||||||||
As
reported in FCX’s consolidated financial
|
|||||||||||||||
statements
|
$
|
1,086,122
|
$
|
477,915
|
$
|
43,250
|
|||||||||
Three
Months Ended March 31, 2005
|
|||||||||||||||
By-Product
|
Co-Product
Method
|
||||||||||||||
(In
Thousands)
|
Method
|
Copper
|
Gold
|
Silver
|
Total
|
||||||||||
Revenues,
after adjustments shown below
|
$
|
500,413
|
$
|
500,413
|
$
|
250,998
|
$
|
9,100
|
$
|
760,511
|
|||||
Site
production and delivery, before net noncash
|
|||||||||||||||
and
nonrecurring costs shown below
|
193,354
|
c
|
127,226
|
d
|
63,814
|
d
|
2,314
|
d
|
193,354
|
||||||
Gold
and silver credits
|
(260,098
|
)
|
-
|
-
|
-
|
-
|
|||||||||
Treatment
charges
|
71,486
|
47,037
|
23,594
|
855
|
71,486
|
||||||||||
Royalty
on metals
|
18,778
|
12,356
|
6,197
|
225
|
18,778
|
||||||||||
Unit
net cash costs
|
23,520
|
186,619
|
93,605
|
3,394
|
283,618
|
||||||||||
Depreciation
and amortization
|
46,925
|
30,877
|
15,487
|
561
|
46,925
|
||||||||||
Noncash
and nonrecurring costs, net
|
524
|
345
|
173
|
6
|
524
|
||||||||||
Total
unit costs
|
70,969
|
217,841
|
109,265
|
3,961
|
331,067
|
||||||||||
Revenue
adjustments, primarily for pricing on
|
|||||||||||||||
prior
period open sales
|
17,151
|
17,151
|
-
|
-
|
17,151
|
||||||||||
PT
Smelting intercompany profit elimination
|
(2,576
|
)
|
(1,695
|
)
|
(850
|
)
|
(31
|
)
|
(2,576
|
)
|
|||||
Gross
profit
|
$
|
444,019
|
$
|
298,028
|
$
|
140,883
|
$
|
5,108
|
$
|
444,019
|
|||||
a. |
Includes
$10.1 million or 4.5 cents per pound for adjustments to December
31, 2005
concentrate sales subject to final pricing to reflect the impact
on
treatment charges resulting from the increase in copper prices since
December 31, 2005.
|
b. |
Includes
$6.6 million or 2.9 cents per pound for copper, $3.4 million or $7.25
per ounce for gold and $0.1 million or $0.13 per ounce for silver
for
adjustments to December 31, 2005 concentrate sales subject to final
pricing to reflect the impact on treatment charges resulting from
the
increase in copper prices since December 31,
2005.
|
c. |
Net
of deferred mining costs totaling $32.2 million or 9.8 cents per
pound.
Following adoption of EITF 04-6 on January 1, 2006 (see Note 3 and
New
Accounting Standards), stripping costs are no longer
deferred.
|
d. |
Net
of deferred mining costs totaling $21.2 million or 6.5 cents per
pound for
copper, $10.6 million or $17.86 per ounce for gold and $0.4 million
or
$0.30 per ounce for silver (see Note c
above).
|
Reconciliation
to Amounts Reported
|
|||||||||||||||
(In
Thousands)
|
Revenues
|
Production
and Delivery
|
Depreciation
and Amortization
|
||||||||||||
Totals
presented above
|
$
|
760,511
|
$
|
193,354
|
$
|
46,925
|
|||||||||
Net
noncash and nonrecurring costs per above
|
N/A
|
524
|
N/A
|
||||||||||||
Less:
Treatment charges per above
|
(71,486
|
)
|
N/A
|
N/A
|
|||||||||||
Royalty per above
|
(18,778
|
)
|
N/A
|
N/A
|
|||||||||||
Revenue
adjustments, primarily for pricing on
|
|||||||||||||||
prior
period open sales per above
|
17,151
|
N/A
|
N/A
|
||||||||||||
Mining
and exploration segment
|
687,398
|
193,878
|
46,925
|
||||||||||||
Smelting
and refining segment
|
272,116
|
263,577
|
7,089
|
||||||||||||
Eliminations
and other
|
(156,449
|
)
|
(92,449
|
)
|
2,912
|
||||||||||
As
reported in FCX’s consolidated financial
|
|||||||||||||||
statements
|
$
|
803,065
|
$
|
365,006
|
$
|
56,926
|
|||||||||
Three
Months Ended
March
31,
|
||||||
2006
|
2005
|
|||||
Smelting
and refining segment production costs reported in FCX’s
|
||||||
consolidated
financial statements
|
$
|
491,437
|
$
|
263,577
|
||
Less:
|
||||||
Raw
material purchase costs
|
(325,940
|
)
|
(197,271
|
)
|
||
Production
costs of anodes sold
|
(4,273
|
)
|
(3,435
|
)
|
||
Other
|
1,169
|
(1,160
|
)
|
|||
Credits:
|
||||||
Gold
and silver revenues
|
(130,044
|
)
|
(31,948
|
)
|
||
Acid
and other by-product revenues
|
(6,659
|
)
|
(7,300
|
)
|
||
Production
costs used in calculating cathode cash unit cost per pound
|
$
|
25,690
|
$
|
22,463
|
||
Pounds
of cathode produced
|
129,400
|
131,700
|
||||
Cathode
cash unit cost per pound
|
$
|
0.20
|
$
|
0.17
|
||
Three
Months Ended
March
31,
|
||||||
2006
|
2005
|
|||||
Operating
costs - PT Smelting (100%)
|
$
|
23,966
|
$
|
18,451
|
||
Add:
Gold and silver refining charges
|
1,466
|
956
|
||||
Less:
Acid and other by-product revenues
|
(3,737
|
)
|
(3,860
|
)
|
||
Other
|
(429
|
)
|
(502
|
)
|
||
Production
costs used in calculating cathode cash unit cost per pound
|
$
|
21,266
|
$
|
15,045
|
||
Pounds
of cathode produced
|
142,400
|
143,500
|
||||
Cathode
cash unit cost per pound
|
$
|
0.15
|
$
|
0.10
|
||
Reconciliation
to Amounts Reported
|
||||||
Operating
costs per above
|
$
|
(23,966
|
)
|
$
|
(18,451
|
)
|
Other
costs
|
(472,038
|
)
|
(278,151
|
)
|
||
Revenue
and other income
|
510,478
|
307,226
|
||||
PT
Smelting net income
|
14,474
|
10,624
|
||||
PT
Freeport Indonesia’s 25% equity interest
|
3,619
|
2,656
|
||||
Amortization
of excess investment cost
|
(60
|
)
|
(60
|
)
|
||
Equity
in PT Smelting earnings reported in FCX’s consolidated
|
||||||
financial
statements
|
$
|
3,559
|
$
|
2,596
|
||
3.1
|
Amended
and Restated Certificate of Incorporation of Freeport-McMoRan Copper
&
Gold Inc. (FCX). Incorporated by reference to Exhibit 3.1 to the
Quarterly
Report on Form 10-Q of FCX for the quarter ended March 31, 2002 (the
FCX
2002 First Quarter Form 10-Q).
|
|
3.2
|
Certificate
of Amendment to Amended and Restated Certificate of Incorporation
of FCX.
Incorporated by reference to Exhibit 3.1 to the Quarterly Report
on Form
10-Q of FCX for the quarter ended March 31, 2003 (the FCX 2003 First
Quarter Form 10-Q).
|
|
3.3
|
Amended
and Restated By-Laws of FCX as amended, effective January 31, 2006.
Incorporated by reference to Exhibit 3.3 to the Current Report on
Form 8-K
of FCX dated January 31, 2006.
|
|
4.1
|
Deposit
Agreement dated as of July 25, 1994, among FCX, Mellon, as Depositary,
and
holders of depositary receipts (Silver-Denominated Depositary Receipts)
evidencing certain Depositary Shares, each of which, in turn, initially
represented 0.025 shares of Silver-Denominated Preferred Stock.
Incorporated by reference to Exhibit 4.7 to the Quarterly Report
on Form
10-Q of FCX for the quarter ended June 30, 2002 (the FCX 2002 Second
Quarter Form 10-Q).
|
|
4.2
|
Form
of Silver-Denominated Depositary Receipt. Incorporated by reference
to
Exhibit 4.8 to the FCX 2002 Second Quarter Form 10-Q.
|
|
4.3
|
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.
|
|
4.4
|
Amended
and Restated Credit Agreement dated as of September 30, 2003, but
effective as of October 2, 2003, among FCX, PT Freeport Indonesia,
the
several financial institutions that are parties thereto, U.S. Bank
Trust
National Association, as PT Freeport Indonesia Trustee, J.P. Morgan
Securities Inc., as Arranger, and JPMorgan Chase Manhattan Bank as
Administrative Agent, Issuing Bank, Security Agent, JAA Security
Agent and
Documentation Agent. Incorporated by reference to Exhibit 4.7 to
the
Quarterly Report on Form 10-Q of FCX for the quarter ended September
30,
2003.
|
|
4.5
|
Senior
Indenture dated as of November 15, 1996, from FCX to The Chase Manhattan
Bank, as Trustee. Incorporated by reference to Exhibit 4.4 to the
Registration Statement on Form S-3 of FCX filed November 5, 2001
(the FCX
November 5, 2001 Form S-3).
|
4.6
|
First
Supplemental Indenture dated as of November 18, 1996, from FCX to
The
Chase Manhattan Bank, as Trustee, providing for the issuance of the
Senior
Notes and supplementing the Senior Indenture dated November 15, 1996,
from
FCX to such Trustee, providing for the issuance of the 7.50% Senior
Notes
due 2006 and the 7.20% Senior Notes due 2026. Incorporated by reference
to
Exhibit 4.5 to the FCX November 5, 2001 Form S-3.
|
|
4.7
|
Indenture
dated as of January 29, 2003, from FCX to The Bank of New York, as
Trustee, with respect to the 10⅛%
Senior Notes due 2010. Incorporated by reference to Exhibit 4.1 to
the
Current Report on Form 8-K of FCX dated February 6,
2003.
|
|
4.8
|
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 and filed February 25,
2003.
|
4.9
|
Indenture
dated as of February 3, 2004, from FCX to The Bank of New York, as
Trustee, with respect to the 6⅞% Senior Notes due 2014. Incorporated by
reference to Exhibit 4.12 to the Annual Report on Form 10-K of FCX
for the
fiscal year ended December 31, 2003 (the FCX 2003 Form
10-K).
|
|
4.10
|
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.
|
|
4.11
|
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
FCX 2002 First Quarter Form 10-Q.
|
|
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
|
Settlement
Agreement dated December 17, 2004, between Underwriters Subscribing
to
Certain Policies Reinsuring the Original Policy, Freeport-McMoRan
Insurance Company Limited, FM Services Company (FMS) and FCX. Incorporated
by reference to Exhibit 10.7 to the Annual Report on Form 10-K of
FCX for
the fiscal year ended December 31, 2004 (the FCX 2004 Form
10-K).
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Executive
Compensation Plans and Arrangements (Exhibits 10.8 through
10.59)
|
||
10.8
|
Annual
Incentive Plan of FCX as amended effective February 2, 1999. Incorporated
by reference to Exhibit 10.11 to the Annual Report on Form 10-K of
FCX for
the fiscal year ended December 31, 1998 (the FCX 1998 Form
10-K).
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10.9
|
FCX
Performance Incentive Awards Program as amended effective February
2,
1999. Incorporated by reference to Exhibit 10.13 to the FCX 1998
Form
10-K.
|
10.10
|
FCX
President’s
Award Program. Incorporated by reference to Exhibit 10.7 to the FCX
November 5, 2001 Form S-3.
|
|
10.11
|
FCX
1995 Stock Option Plan, as amended and restated. Incorporated by
reference
to Exhibit 10.3 to the Current Report on Form 8-K of FCX dated May
2, 2006
(the FCX May 2, 2006 Form 8-K).
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|
10.12
|
FCX
Amended and Restated 1999 Stock Incentive Plan, as amended and restated.
Incorporated by reference to Exhibit 10.2 to the FCX May 2, 2006
Form
8-K.
|
|
10.13
|
Form
of Notice of Grant of Nonqualified Stock Options under the 1999 Stock
Incentive Plan. Incorporated by reference to Exhibit 10.14 to the
FCX 2005
Second Quarter Form 10-Q.
|
|
10.14
|
Form
of Restricted Stock Unit Agreement under the 1999 Stock Incentive
Plan.
Incorporated by reference to Exhibit 10.15 to the FCX 2005 Second
Quarter
Form 10-Q.
|
|
10.15
|
Form
of Performance-Based Restricted Stock Unit Agreement under the 1999
Stock
Incentive Plan. Incorporated by reference to Exhibit 10.16 to the
FCX 2005
Second Quarter Form 10-Q.
|
|
10.16
|
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 year
ended
December 31, 1999 (the FCX 1999 Form 10-K).
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|
10.17
|
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).
|
|
10.18
|
FCX
2003 Stock Incentive Plan, as amended and restated. Incorporated
by
reference to Exhibit 10.1 to the FCX May 2, 2006 Form
8-K.
|
|
10.19
|
Form
of Notice of Grant of Nonqualified Stock Options under the 2003 Stock
Incentive Plan. Incorporated by reference to Exhibit 10.20 to the
FCX 2005
Second Quarter Form 10-Q.
|
|
10.20
|
Form
of Restricted Stock Unit Agreement under the 2003 Stock Incentive
Plan.
Incorporated by reference to Exhibit 10.21 to the FCX 2005 Second
Quarter
Form 10-Q.
|
|
10.21
|
Form
of Performance-Based Restricted Stock Unit Agreement under the 2003
Stock
Incentive Plan. Incorporated by reference to Exhibit 10.22 to the
FCX 2005
Second Quarter Form 10-Q.
|
|
10.22
|
FCX
1995 Stock Option Plan for Non-Employee Directors. Incorporated by
reference to Exhibit 10.23 to the FCX 2005 Second Quarter Form
10-Q.
|
|
10.23
|
FCX
2004 Director Compensation Plan. Incorporated by reference to Exhibit
10.24 to the FCX 2005 Second Quarter Form 10-Q.
|
|
10.24
|
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 FCX May 2, 2006
Form
8-K.
|
|
10.25
|
FCX
2006 Stock Incentive Plan. Incorporated by reference to Exhibit 10.6
to
the FCX May 2, 2006 Form 8-K.
|
|
10.26
|
Form
of Notice of Grant of Nonqualified Stock Options under the 2006 Stock
Incentive Plan. Incorporated by reference to Exhibit 10.7 to the
FCX May
2, 2006 Form 8-K.
|
|
10.27
|
Form
of Restricted Stock Unit Agreement under the 2006 Stock Incentive
Plan.
Incorporated by reference to Exhibit 10.8 to the FCX May 2, 2006
Form
8-K.
|
10.28
|
Form
of Performance-Based Restricted Stock Unit Agreement under the 2006
Stock
Incentive Plan. Incorporated by reference to Exhibit 10.9 to the
FCX May
2, 2006 Form 8-K.
|
|
10.29
|
FCX
Director Compensation. Incorporated by reference to Exhibit 10.25
to the
FCX 2004 Form 10-K.
|
|
10.30
|
FCX
Supplemental Executive Retirement Plan dated February 26, 2004.
Incorporated by reference to Exhibit 10.26 to the FCX 2004 Form
10-K.
|
|
10.31
|
Amendment
No. 1 to FCX Supplemental Executive Retirement Plan. Incorporated
by
reference to Exhibit 10.1 to the Current Report on Form 8-K of FCX
dated
May 3, 2005.
|
|
10.32
|
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.
|
|
10.33
|
FCX
Executive Services Program. Incorporated by reference to Exhibit
10.5 to
the FCX May 2, 2006 Form 8-K.
|
|
10.34
|
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.
|
|
10.35
|
Amended
FM Services Company Financial Counseling and Tax Return Preparation
and
Certification Program. Incorporated by reference to Exhibit 10.20
to the
FCX 2003 First Quarter Form 10-Q.
|
|
10.36
|
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).
|
|
10.37
|
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.
|
|
10.38
|
Letter
Agreement dated January 27, 1997, among Kissinger Associates, Kent
Associates, FCX, Freeport-McMoRan Inc., and 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).
|
|
10.39
|
Supplemental
Consulting Agreement with Kissinger Associates and Kent Associates,
effective as of January 1, 2006. Incorporated by reference to Exhibit
10.35 to the Annual Report on Form 10-K of FCX for the fiscal year
ended
December 31, 2005 (the FCX 2005 Form 10-K).
|
|
10.40
|
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.
|
|
10.41
|
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.
|
|
10.42
|
Supplemental
Letter Agreement between FMS and B. M. Rankin, Jr., effective as
of
January 1, 2006. Incorporated by reference to Exhibit 10.38 to the
FCX
2005 Form 10-K.
|
|
10.43
|
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.
|
|
10.44
|
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.
|
10.45
|
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.
|
|
10.46
|
Supplemental
Consulting Agreement between FMS and J. Bennett Johnston, Jr., effective
as of January 1, 2006. Incorporated by reference to Exhibit 10.42
to the
FCX 2005 Form 10-K.
|
|
10.47
|
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.
|
|
10.48
|
Supplemental
Letter Agreement, between FMS and Gabrielle K. McDonald, effective
as of
January 1, 2006. Incorporated by reference to Exhibit 10.44 to the
FCX
2005 Form 10-K.
|
|
10.49
|
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.
|
|
10.50
|
Executive
Employment Agreement dated April 30, 2001, between FCX and Richard
C.
Adkerson. Incorporated by reference to Exhibit 10.36 to the FCX 2001
Second Quarter Form 10-Q.
|
|
10.51
|
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.
|
|
10.52
|
Change
of Control Agreement dated April 30, 2001, between FCX and Richard
C.
Adkerson. Incorporated by reference to Exhibit 10.38 to the FCX 2001
Second Quarter Form 10-Q.
|
|
10.53
|
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 FCX 2003 Form 10-K.
|
|
10.54
|
First
Amendment to Executive Employment Agreement dated December 10, 2003,
between FCX and Richard C. Adkerson. Incorporated by reference to
Exhibit
10.37 to the FCX 2003 Form 10-K.
|
|
10.55
|
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.
|
|
10.56
|
First
Amendment to Change of Control Agreement dated December 10, 2003,
between
FCX and Richard C. Adkerson. Incorporated by reference to Exhibit
10.39 to
the FCX 2003 Form 10-K.
|
|
10.57
|
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.
|
|
10.58
|
Change
of Control Agreement dated February 3, 2004, between FCX and Mark
J.
Johnson. Incorporated by reference to Exhibit 10.41 to the FCX 2003
Form
10-K.
|
|
10.59
|
Change
of Control Agreement dated February 3, 2004, between FCX and Kathleen
L.
Quirk. Incorporated by reference to Exhibit 10.42 to the FCX 2003
Form
10-K.
|
Letter
from Ernst & Young LLP regarding unaudited interim financial
statements.
|
||
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.
|