NEW ORLEANS--(BUSINESS WIRE)--
HIGHLIGHTS
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Fourth-quarter 2006 net income of $426 million, $1.99 per share,
compared with net income of $463 million, $2.19 per share, for the
fourth quarter of 2005. Net income of $1.4 billion, $6.63 per share,
for 2006, compared with $935 million, $4.67 per share, for 2005.
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Fourth-quarter 2006 sales for PT Freeport Indonesia (PT-FI), FCX’s
Indonesian mining unit, totaled 433 million pounds of copper and 508
thousand ounces of gold, compared with 468 million pounds of copper
and 1.1 million ounces of gold in the fourth quarter of 2005.
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PT-FI’s share of 2006 sales totaled 1.2
billion pounds of copper and 1.7 million ounces of gold, compared with
1.5 billion pounds of copper and 2.8 million ounces of gold for 2005.
PT-FI’s share of 2007 sales is projected
to total 1.1 billion pounds of copper and 1.8 million ounces of gold.
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FCX’s operating cash flows approximated
$798 million for the fourth quarter of 2006 and $1.9 billion for 2006.
Capital expenditures totaled $73 million for the fourth quarter of
2006 and $251 million for 2006.
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Total cash as of December 31, 2006, was $907 million and debt
totaled $680 million. Total debt was reduced by $576 million during
2006.
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Common stock dividends during the fourth quarter of 2006 totaled
$357 million ($1.8125 per share), including a supplemental $295
million ($1.50 per share) dividend paid on December 29, 2006.
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During 2006, FCX completed financial transactions totaling $1.6
billion, including $576 million in debt reductions and $1.0 billion in
cash to shareholders ($916 million, $4.75 per share, in common stock
dividends and $100 million in common stock purchases).
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PT-FI’s share of estimated recoverable
reserves as of December 31, 2006 totaled 38.7 billion pounds of copper
and 41.1 million ounces of gold.
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Announced agreement to acquire Phelps Dodge for cash and stock in a
$25.9 billion transaction, which would create the world’s
largest publicly traded copper company. Transaction expected to close
in March 2007.
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported fourth-quarter
2006 net income applicable to common stock of $426.4 million, $1.99 per
share, compared with net income of $463.2 million, $2.19 per share, for
the fourth quarter of 2005. For the year ended December 31, 2006, FCX
reported net income of $1.4 billion, $6.63 per share, compared with
$934.6 million, $4.67 per share, for the year ended December 31, 2005.
Net income for 2006 included net losses of $73.9 million ($0.33 per
share) on debt reductions and net gains of $29.7 million ($0.13 per
share) at Atlantic Copper, FCX’s wholly
owned Spanish smelting unit, from the disposition of land and certain
royalty rights.
Net income for the fourth quarter of 2005 included net losses of $10.0
million ($0.05 per share) on debt reductions and a gain of $4.9 million
($0.02 per share) from the sale of land. Net income for 2005 included
net losses of $42.9 million ($0.19 per share) on debt reductions.
SUMMARY FINANCIAL TABLE
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Fourth Quarter
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Twelve Months
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2006
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2005
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2006
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2005
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(In Thousands, Except Per Share Amounts)
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Revenues
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$1,642,127
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$1,489,874
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$5,790,500(a)
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$4,179,118(a)
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Operating income
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862,236
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929,693
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2,868,747
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2,177,286(a)
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Net income applicable to common stock(b),(c)
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426,442
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463,180
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1,396,00(a),(d)
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934,627(a)
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Diluted net income per share of common stock(b),(c),(e)
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$1.99
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$2.19
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$6.63(a),(d)
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$4.67(a)
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Diluted average common shares outstanding(e)
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221,690
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221,025
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221,498
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220,470
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a) Includes losses on the redemption of Silver-Denominated Preferred
Stock totaling $13.3 million ($7.0 million to net income or $0.03
per share) in the 2006 twelve-month period, compared with $5.0
million ($2.6 million to net income or $0.01 per share) in the 2005
period. Also includes a loss on the redemption of Gold-Denominated
Preferred Stock, Series II totaling $69.0 million ($36.6 million to
net income or $0.17 per share) in the 2006 twelve-month period.
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b) After preferred dividends.
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c) Includes losses on the early extinguishment and conversion of
debt totaling $13.8 million ($10.0 million to net income or $0.05
per share) in the 2005 fourth quarter, $32.0 million ($30.3
million to net income or $0.14 per share) in the 2006 twelve-month
period and $52.2 million ($40.2 million to net income or $0.18 per
share) in the 2005 twelve-month period.
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d) Includes net gains from the disposition of land and certain
royalty rights owned by Atlantic Copper totaling $29.7 million
($0.13 per share) in the 2006 twelve-month period.
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e) Reflects assumed conversion of FCX's 7% Convertible Senior Notes
and 5 1/2% Convertible Perpetual Preferred Stock. See Note f on page
III.
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James R. Moffett, Chairman of the Board, and Richard C. Adkerson,
President and Chief Executive Officer, said, “We
are pleased with the continuation of strong performance from the
Grasberg minerals district, which together with strong copper and gold
prices resulted in record financial results in 2006. We look
forward to completing the Phelps Dodge transaction in the first quarter,
which will allow our shareholders to benefit from the combined company’s
portfolio of diverse operations, growth projects and long-lived reserves.
We are positive about the outlook for our industry and the
opportunities available from the combined company’s
assets.”
PT-FI PRODUCTION AND SALES
PT-FI’s share of fourth-quarter 2006 sales
totaled 432.5 million pounds of copper and 507.5 thousand ounces of
gold, exceeding previous estimates reported in October 2006 of 415
million pounds of copper and 470 thousand ounces of gold.
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Fourth Quarter
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Twelve Months
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2006
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2005
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2006
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2005
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Copper (000s of recoverable pounds):
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Production
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435,200
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473,500
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1,201,200
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1,455,900
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Sales
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432,500
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468,400
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1,201,400
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1,456,500
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Average realized price per pound
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$2.88
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$2.02
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$3.13
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$1.85
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Gold (recoverable ounces):
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Production
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514,000
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1,116,600
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1,731,800
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2,789,400
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Sales
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507,500
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1,103,500
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1,736,000
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2,790,200
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Average realized price per ounce
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$627.71
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$494.01
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$566.51(a)
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$456.27
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a) Amount was $606.36 before revenue reduction resulting
from redemption of FCX’s
Gold-Denominated Preferred Stock, Series II.
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In the fourth quarter of 2006, copper ore grades averaged 1.08 percent
and recovery rates averaged 89.5 percent, compared with 1.31 percent and
91.1 percent for the fourth quarter of 2005. Gold ore grades averaged
0.95 grams per metric ton (g/t) and recovery rates averaged 84.2 percent
in the fourth quarter of 2006, compared with 2.33 g/t and 84.0 percent
for the fourth quarter of 2005. Average ore grades improved during the
fourth quarter of 2006, compared to the first nine months of 2006.
Copper and gold ore grades are projected to be higher in the first half
of 2007 than in the second half because of mine sequencing, with
approximately 63 percent of copper and approximately 81 percent of gold
expected to be sold in the first half of the year. First-quarter 2007
sales are estimated to be the highest of the year, approximating 400
million pounds of copper and 850,000 ounces of gold.
Mill throughput, which varies depending on ore types being processed,
averaged 246,500 metric tons of ore per day in the fourth quarter of
2006, compared with 236,900 metric tons of ore in the fourth quarter of
2005.
Production from PT-FI’s Deep Ore Zone (DOZ)
underground mine averaged 42,600 metric tons of ore per day in the
fourth quarter of 2006, representing 17 percent of mill throughput. DOZ
continues to perform above design capacity of 35,000 metric tons of ore
per day. PT-FI is expanding the capacity of the DOZ underground
operation to a sustained rate of 50,000 metric tons per day with the
installation of a second crusher and additional ventilation, expected to
be completed in mid-2007. PT-FI anticipates a further expansion of the
DOZ mine to 80,000 metric tons per day. The DOZ mine is one of the world’s
largest underground mines.
Realized copper prices improved by 43 percent to an average of $2.88 per
pound in the fourth quarter of 2006 from $2.02 per pound in the fourth
quarter of 2005. The spot copper price on the London Metal Exchange
closed at $2.55 per pound on January 15, 2007. Realized gold prices
improved by 27 percent to an average of $627.71 per ounce in the fourth
quarter of 2006 from $494.01 per ounce in the fourth quarter of 2005.
The London P.M. gold fixing price closed at $627.00 per ounce on January
15, 2007.
FCX’s concentrate sales for the fourth
quarter of 2006 included 346.4 million pounds of copper, priced at an
average of $2.87 per pound, subject to final pricing over the next
several months. Each $0.05 change in the price realized from the
December 31 price would result in an approximate $9 million effect on FCX’s
2007 net income. Fourth-quarter 2006 adjustments to concentrate sales
recognized in prior quarters decreased revenues by $70.8 million ($37.6
million to net income or $0.17 per share) compared with an increase of
$59.3 million ($31.4 million to net income or $0.14 per share) in the
fourth quarter of 2005.
PT-FI’s share of annual sales in 2007 is
currently projected to approximate 1.1 billion pounds of copper and 1.8
million ounces of gold. Annual sales over the five-year period from 2007
to 2011 are expected to average approximately 1.2 billion pounds of
copper and 1.8 million ounces of gold. At the Grasberg mine, the
sequencing in mining areas with varying ore grades causes fluctuations
in the timing of ore production, resulting in varying quarterly and
annual sales of copper and gold. The achievement of PT-FI’s
sales estimates will be dependent, among other factors, on the
achievement of targeted mining rates, the successful operation of PT-FI
production facilities, the impact of weather conditions at the end of
fiscal periods on concentrate loading activities and other factors.
PT-FI’s mine plans are based on latest
available data and studies, which take into account factors such as
mining and milling rates, ore grades and recoveries, economic conditions
and geological/geotechnical considerations. PT-FI updates these plans to
incorporate new data and conditions, with the objective of operating
safely, managing risks and maximizing economic values.
PT-FI recently completed an analysis of its longer-range mine plans to
assess the optimal design of the Grasberg open pit and the timing of
development of the Grasberg underground block cave ore body. The
analysis incorporated the latest geological and geotechnical studies,
costs and other economic factors in developing the optimal timing for
transitioning from the open pit to underground. The revised long-range
plan includes changes to the expected final Grasberg open-pit design
which will result in a section of high grade ore previously expected to
be mined in the open pit to be mined in the Grasberg underground block
cave mine. Approximately 100 million metric tons of high grade ore in
the southwest corner (located in the "8 South" pushback) of the open
pit, with aggregate recoverable metal approximating 4 billion pounds of
copper and 5 million ounces of gold, is expected to be mined through
PT-FI's large scale block caving operations rather than from open-pit
mining. The revised mine plan reflects a transition from the Grasberg
open pit to the Grasberg underground block cave ore body in mid-2015.
The mine plan revisions alter the timing of metal production in the
period of 2015 and beyond but do not have a significant effect on
ultimate recoverable reserves. The success of PT-FI's underground
operations and the significant progress to establish underground
infrastructure provides confidence in developing the high-grade,
large-scale underground ore bodies in the Grasberg minerals district.
PT-FI will continue to assess opportunities to optimize the long-range
mine plans and net present values of the Grasberg minerals district.
UNIT NET CASH COSTS
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Fourth Quarter
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Twelve Months
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2006
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2005
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2006
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2005
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Per pound of copper:
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Site production and delivery, after adjustments
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$0.77
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$0.62
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$1.03
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$0.65
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Gold and silver credits
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(0.77)
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(1.19)
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(0.93)
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(0.89)
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Treatment charges
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0.33
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0.27
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0.40
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0.24
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Royalties
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0.11
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0.10
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0.10
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0.07
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Unit net cash costs (credits)(a)
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$0.44
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$(0.20)
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$0.60
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$0.07
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a) For a reconciliation of unit net cash costs (credits)
per pound to production and delivery costs applicable to sales
reported in FCX’s consolidated
financial statements refer to the attached presentation, “Product
Revenues and Production Costs.”
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PT-FI’s unit net cash costs, including gold
and silver credits, averaged $0.44 per pound of copper during the fourth
quarter of 2006, compared with a credit of $0.20 per pound in the 2005
quarter. The higher unit net cash costs in the 2006 quarter compared
with the 2005 quarter primarily reflect lower copper and gold volumes,
and the factors resulting in an increase in the 2006 annual period
include higher unit production costs (resulting from lower volumes,
higher input costs and the impact of changes in accounting for stripping
costs) and higher treatment charges and royalties attributable to
increased copper prices. Unit site production and delivery costs will
vary with fluctuations in production volumes because of the primarily
fixed nature of PT-FI’s cost structure.
On January 1, 2006, FCX adopted Emerging Issues Task Force Issue No.
04-6, “Accounting for Stripping Costs
Incurred during Production in the Mining Industry”
(EITF 04-6), which requires that stripping costs be included in costs of
sales as incurred beginning in 2006. Upon adoption of EITF 04-6, FCX
eliminated its deferred mining cost asset ($285.4 million) at December
31, 2005, net of taxes, minority interest share and inventory effects
($135.9 million), as a cumulative effect adjustment which reduced its
retained earnings on January 1, 2006. Unit site production and delivery
costs include the amortization of previously deferred mining costs of
$0.01 per pound ($3.7 million) in the fourth quarter of 2005 and are net
of deferred mining costs of $0.05 per pound ($64.9 million) in the 2005
twelve-month period.
Assuming 2007 average copper prices of $2.50 per pound and average gold
prices of $600 per ounce and achievement of current 2007 sales
estimates, PT-FI estimates that its annual 2007 unit net cash costs,
including gold and silver credits, would approximate $0.63 per pound.
Estimated unit net cash costs for 2007 are projected to be slightly
higher than the 2006 average, primarily because of lower 2007 copper
sales volumes partially offset by lower treatment charges and higher
gold credits. Because the majority of PT-FI’s
costs are fixed, unit costs vary with the volumes sold and will
therefore be lower during the first half of 2007 and higher during the
second half compared to the projected annual average. Unit net cash
costs for 2007 would change by approximately $0.04 per pound for each
$25 per ounce change in the average price of gold.
SMELTER OPERATIONS
FCX’s investment in smelters serves an
important role in its concentrate marketing strategy. Through downstream
integration, FCX assures placement of a significant portion of its
concentrate production. Taking into account taxes and minority
interests, an equivalent change in PT-FI and Atlantic Copper treatment
charges essentially offset in FCX's operating results. Treatment charges
consist of a base rate and, in certain contracts, price participation
based on copper prices. Essentially all of PT-FI's concentrate is sold
under long-term contracts.
Atlantic Copper treated 229,600 metric tons of concentrate and scrap in
the fourth quarter of 2006, compared with 259,100 metric tons in the
year-ago period. Atlantic Copper produced 133.4 million pounds of
cathodes and sold 136.3 million pounds of cathodes during the fourth
quarter of 2006, compared with cathode production of 137.6 million
pounds and sales of 136.7 million pounds during the fourth quarter of
2005. Treatment charges received by Atlantic Copper averaged $0.37 per
pound during the fourth quarter of 2006 and $0.27 per pound during the
fourth quarter of 2005. The increase in treatment charges in the 2006
period reflects higher market rates and price participation under the
terms of Atlantic Copper’s concentrate
purchase and sales agreements. Cathode cash unit costs averaged $0.21
per pound in the fourth quarter of 2006 and $0.17 per pound in the
fourth quarter of 2005 (see attached presentation, “Cathode
Cash Unit Costs”). Higher unit costs in the
2006 period primarily reflect the impact of lower anode volumes and
exchange rate movements.
Atlantic Copper’s operating income of $19.1
million for the fourth quarter of 2006 approximated operating income for
the 2005 period. For the year 2006, Atlantic Copper generated $74.5
million in operating income, compared with $34.8 million in 2005. The
positive results in 2006 primarily reflect higher treatment charges,
partly offset by lower volumes. Each $0.01 change in treatment charge
rates equates to approximately $6 million of Atlantic Copper annual
operating income. Atlantic Copper is planning a 23-day maintenance
turnaround beginning in the second quarter of 2007, which is expected to
adversely affect costs and volumes resulting in an approximate $25
million impact on 2007 operating results.
PT Smelting, PT-FI’s 25 percent-owned
Indonesian smelting unit, treated 100,700 metric tons of concentrates in
the fourth quarter of 2006, compared with 228,800 metric tons in the
year-ago period. In October 2006, PT Smelting temporarily suspended
smelter operations following an equipment failure at the oxygen plant
supplying the smelter. PT Smelting resumed operations in mid-December
2006. During 2006, PT Smelting completed an expansion of its production
capacity from 250,000 metric tons of copper metal per year to 275,000
metric tons of copper metal per year. PT Smelting produced 82.3 million
pounds of cathodes for the fourth quarter of 2006, compared with cathode
production of 145.4 million pounds during the fourth quarter of 2005. PT
Smelting’s cathode cash unit cost per pound
totaled $0.23 per pound in the fourth quarter of 2006 and $0.17 per
pound in the year-ago period (see attached presentation, “Cathode
Cash Unit Costs”), primarily reflecting the
impact of lower volumes in 2006. PT-FI’s
equity interest in PT Smelting’s losses
totaled $0.6 million, $0.5 million to net income or less than $0.01 per
share, in the fourth quarter of 2006, compared to earnings of $2.8
million, $2.3 million to net income or $0.01 per share, in the 2005
quarter. For the year 2006, PT-FI’s
equity interest in PT Smelting’s
earnings totaled $6.5 million, $5.3 million to net income or $0.02 per
share, and $9.3 million, $7.6 million to net income or $0.03 per share
in 2005.
FCX defers recognition of profits on PT-FI’s
sales to Atlantic Copper and on 25 percent of PT-FI’s
sales to PT Smelting until the final sales to third parties occur.
Changes in these net deferrals resulted in additions to FCX’s
net income totaling $4.1 million, $0.02 per share, in the fourth quarter
of 2006 and $17.1 million, $0.08 per share, for the year 2006. FCX’s
net income for 2005 was reduced by $67.8 million, $0.31 per share, for
changes in intercompany profits, in the fourth quarter and $77.8
million, $0.35 per share, for the year. At December 31, 2006, FCX’s
net deferred profits on PT-FI concentrate inventories at Atlantic Copper
and PT Smelting to be recognized in future periods’
net income after taxes and minority interests sharing totaled $100.8
million. Based on copper prices of $2.50 per pound and gold prices of
$600 per ounce for 2007 and current shipping schedules, FCX estimates
that the net change in deferred profits on intercompany sales will
result in a decrease to net income of approximately $60 million in the
first quarter of 2007. The actual change in deferred intercompany
profits may differ substantially from this estimate because of changes
in the timing of shipments to affiliated smelters and metal prices.
RESERVE CHANGES, EXPLORATION and MINE DEVELOPMENT ACTIVITIES
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Aggregate Reserves
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PT-FI’s Share
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Copper (billions of lbs)
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Gold (millions of ozs)
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Silver (millions of ozs)
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Copper (billions of lbs)
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Gold (millions of ozs)
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Silver (millions of ozs)
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Reserves - December 31, 2005
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56.6
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58.0
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180.8
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40.3
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43.9
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127.0
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Net revisions
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(0.5)
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(1.8)
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8.0
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(0.4)
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(1.1)
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4.8
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Production
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(1.3)
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(1.8)
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(4.3)
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(1.2)
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(1.7)
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(3.8)
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Reserves - December 31, 2006
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54.8
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54.4
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184.5
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38.7
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41.1
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128.0
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During 2006, PT-FI added 41.8 million metric tons of ore averaging 0.67
percent copper and 0.70 g/t gold associated with positive drilling
results at the Mill Level Zone and Deep Mill Level Zone deposits, a
387-million-metric-ton complex with average grades of 1.02 percent
copper and 0.81 g/t gold. PT-FI’s reserve
estimates also reflect revisions resulting from changes to its
long-range mine plans. Year-end 2006 aggregate proven and probable
recoverable reserves, net of 2006 production, were 2.8 billion metric
tons of ore averaging 1.04 percent copper, 0.90 g/t gold and 4.16 g/t
silver. Estimated recoverable reserves were assessed using a copper
price of $1.00 per pound and a gold price of $400 per ounce.
Pursuant to joint venture arrangements between PT-FI and Rio Tinto, Rio
Tinto has a 40 percent interest in production from reserves above those
reported at December 31, 1994. Net of Rio Tinto’s
share, PT-FI’s share of proven and probable
recoverable reserves as of December 31, 2006, was 38.7 billion pounds of
copper, 41.1 million ounces of gold and 128.0 million ounces of silver.
FCX has a 90.6 percent equity interest in PT-FI’s
share of proven and probable reserves.
PT-FI’s exploration efforts in 2007 will
continue to test extensions of the Deep Grasberg and Kucing Liar mine
complex. Engineering studies are under way to incorporate positive
drilling results from 2006 activities at Deep Grasberg and Kucing Liar.
PT-FI also expects to test the open-pit potential of the Wanagon gold
prospect and the Ertsberg open-pit resource, and will begin testing for
extensions of the Deep MLZ deposit and other targets in the gap between
the Ertsberg and Grasberg mineral systems from the new Common
Infrastructure tunnels located at the 2,500 meter level. During 2007,
FCX plans to resume exploration activities, which had been suspended in
recent years, in certain prospective areas outside Block A. FCX’s
exploration expenditures are expected to approximate $25 million in 2007.
In 2004, PT-FI commenced its Common Infrastructure project, which will
provide access to its large undeveloped underground ore bodies located
in the Grasberg minerals district through a tunnel system located
approximately 400 meters deeper than its existing underground tunnel
system. In addition to providing access to its underground ore bodies,
the tunnel system will enable PT-FI to conduct future exploration in
prospective areas associated with its currently identified ore bodies.
The tunnel system has reached the Big Gossan terminal and PT-FI is
proceeding with development of the lower Big Gossan infrastructure.
PT-FI has also advanced development of the Deep Grasberg spur and has
completed 67 percent of the tunneling required to reach the Grasberg
underground ore body. PT-FI expects the Deep Grasberg spur to reach the
Grasberg underground ore body in the second half of 2007 and will begin
multi-year mine development activities.
The Big Gossan underground mine is a high-grade deposit located near the
existing milling complex. Remaining capital expenditures for the $260
million Big Gossan project to be incurred over the next few years total
approximately $185 million, $175 million net to PT-FI, with a ramp-up to
full production of 7,000 metric tons per day by 2010 (average annual
aggregate incremental production approximating 135 million pounds of
copper and 65,000 ounces of gold, with PT-FI receiving 60 percent of
these amounts).
As discussed above, PT-FI is expanding the DOZ underground mine to
50,000 metric tons of ore per day from the current capacity of 35,000
metric tons per day. The 50,000 metric tons per day expansion is on
track for completion in mid-2007. PT-FI anticipates expanding this mine
further to 80,000 metric tons of ore per day. The success of the
development of the DOZ mine, one of the world’s
largest underground operations, provides confidence in the future
development of PT-FI’s large scale
undeveloped ore bodies.
CASH FLOWS, DEBT REDUCTION and FINANCIAL TRANSACTIONS
FCX generated operating cash flows totaling $798.0 million during the
fourth quarter of 2006 and $1.87 billion for 2006. Capital expenditures
totaled $72.5 million for the fourth quarter of 2006 and $250.5 million
for 2006. FCX’s capital expenditures for
2007 are currently estimated to approximate $400 million.
Using estimated sales volumes for 2007 and assuming average prices of
$2.50 per pound of copper and $600 per ounce of gold for 2007, FCX’s
operating cash flows would exceed $1.3 billion in 2007. Each $0.10 per
pound change in copper prices would affect 2007 cash flows by
approximately $55 million and each $25 per ounce change in gold prices
would affect 2007 cash flows by approximately $23 million.
As of December 31, 2006, total cash was $907.5 million and debt totaled
$680.1 million. Total debt was reduced by $575.8 million in 2006,
including $316.6 million from the conversions of FCX’s
7% Convertible Senior Notes due 2011 into common stock and $167.4
million from the redemption of FCX’s
Gold-Denominated Preferred Stock, Series II.
Common stock dividends during the fourth quarter of 2006 totaled $357.0
million ($1.8125 per share), including a supplemental dividend of $1.50
per share paid on December 29, 2006. In 2006, FCX completed
approximately $1.6 billion in financial transactions, including debt
reductions totaling $575.8 million, common stock dividends totaling
$915.8 million ($4.75 per share, including $3.50 per share in
supplemental dividends) and $99.8 million in common stock purchases.
Since December 2004, FCX has paid eight supplemental dividends totaling
$994.8 million ($5.25 per share).
FCX has purchased a total of 7.8 million shares for $279.5 million
(average of $36.05 per share) under its Board authorized 20-million
share open market purchase program. As of January 15, 2007, 12.2 million
shares remain available for purchase under the program. As of December
31, 2006, FCX had 197.0 million common shares outstanding.
PENDING ACQUISITION of PHELPS DODGE
On November 19, 2006, FCX and Phelps Dodge Corporation (NYSE:PD)
announced that they had signed a definitive merger agreement whereby FCX
will acquire Phelps Dodge for approximately $25.9 billion in cash and
stock, based on FCX’s closing stock price on
November 17, 2006, creating the world’s
largest publicly traded copper company. The combined company will be a
new industry leader with large, long-lived, geographically diverse
assets and significant proven and probable reserves of copper, gold and
molybdenum.
Completion of the transaction is subject to a number of conditions,
including receipt of FCX and Phelps Dodge shareholder approval and
regulatory approvals. U.S. authorities granted early termination of the
waiting period under the Hart Scott Rodino Act in late December and we
are working to obtain regulatory approval from the European Commission.
Shareholder meetings to approve the transaction will be scheduled upon
the effectiveness of the registration statement filed with the
Securities and Exchange Commission on December 11, 2006. The transaction
is expected to close in March 2007.
FCX explores for, develops, mines and processes ore containing copper,
gold and silver in Indonesia, and smelts and refines copper concentrates
in Spain and Indonesia. Additional information on FCX is available on
our web site, www.fcx.com.
Cautionary Statement and Regulation G Disclosure: This
press release contains forward-looking statements in which we discuss
factors we believe may affect our performance in the future. Forward-looking
statements are all statements other than historical facts, such as
statements regarding projected ore grades and milling rates, projected
sales volumes, projected unit net cash costs, projected treatment charge
rates, projected operating cash flows, projected capital expenditures,
the impact of copper and gold price changes, the impact of changes in
deferred intercompany profits on earnings and the merger with Phelps
Dodge. Accuracy of the projections depends on assumptions about
events that change over time and is thus susceptible to periodic change
based on actual experience and new developments. The declaration
and payment of dividends is at the discretion of the company’s
Board of Directors and will depend on the company’s
cash flows and financial position, copper and gold prices and general
economic and market conditions. FCX cautions readers that it
assumes no obligation to update or publicly release any revisions to the
projections in this press release and, except to the extent required by
applicable law, does not intend to update or otherwise revise the
projections more frequently than quarterly. Additionally,
important factors that might cause future results to differ from these
projections include mine sequencing, production rates, industry risks,
commodity prices, Indonesian political risks, weather-related risks,
currency translation risks and other factors described in FCX's Annual
Report on Form 10-K for the year ended December 31, 2005, and subsequent
Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission (SEC).
This press release also contains certain financial measures such as
unit net cash costs (credits) per pound of copper and cathode cash unit
cost per pound of copper. As required by SEC Regulation G,
reconciliations of these measures to amounts reported in FCX’s
consolidated financial statements are provided in the attachments to
this press release.
A copy of this press release is available on our web site, “www.fcx.com.”
A conference call with securities analysts about fourth-quarter 2006
results is scheduled for today at 10:00 a.m. EDT. The conference
call will be broadcast on the Internet along with slides. Interested
parties may listen to the webcast live and view the slides by accessing “www.fcx.com.”
A replay of the webcast will be available through Friday, February 9,
2007.
Important Information for Investors and Stockholders: FCX and
Phelps Dodge filed a joint proxy statement/prospectus with the SEC in
connection with the proposed merger on December 11, 2006. FCX and
Phelps Dodge urge investors and stockholders to read the joint proxy
statement/prospectus and any other relevant documents filed by either
party with the SEC because they contain important information.
Investors and stockholders may obtain the joint proxy
statement/prospectus and other documents filed with the SEC free of
charge at the website maintained by the SEC at www.sec.gov. In addition,
documents filed with the SEC by FCX will be available free of charge on
the investor relations portion of the FCX web site at www.fcx.com. Documents
filed with the SEC by Phelps Dodge will be available free of charge on
the investor relations portion of the Phelps Dodge web site at
www.phelpsdodge.com.
FCX and certain of its directors and executive officers are
participants in the solicitation of proxies from the stockholders of FCX
in connection with the merger. Information concerning the
interests of FCX’s directors and executive
officers in FCX is set forth in the proxy statement for FCX’s
2006 annual meeting of stockholders, which was filed with the SEC on
March 22, 2006. Phelps Dodge and certain of its directors and
executive officers may be deemed to be participants in the solicitation
of proxies from its shareholders in connection with the merger. Information
concerning the interests of Phelps Dodge’s
directors and executive officers in Phelps Dodge is set forth in the
proxy statement for Phelps Dodge’s 2006
annual meeting of shareholders, which was filed with the SEC on April
13, 2006.
Other information regarding the direct and indirect interests, by
security holdings or otherwise, of the participants is described in the
definitive joint proxy statement/prospectus relating to the merger. Investors
and stockholders can obtain more detailed information regarding the
direct and indirect interests of FCX’s and
Phelps Dodge’s directors and executive
officers in the merger by reading the definitive joint proxy
statement/prospectus.
|
FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA
|
|
|
|
Fourth Quarter
|
|
Twelve Months
|
|
|
|
2006
|
|
2005
|
|
2006
|
|
|
2005
|
|
PT Freeport Indonesia, Net of Rio Tinto’s
Interest
|
|
|
|
|
|
|
|
|
|
|
Copper (recoverable)
|
|
|
|
|
|
|
|
|
|
|
Production (000s of pounds)
|
|
435,200
|
|
473,500
|
|
1,201,200
|
|
|
1,455,900
|
|
Production (metric tons)
|
|
197,400
|
|
214,800
|
|
544,900
|
|
|
660,400
|
|
Sales (000s of pounds)
|
|
432,500
|
|
468,400
|
|
1,201,400
|
|
|
1,456,500
|
|
Sales (metric tons)
|
|
196,100
|
|
212,500
|
|
544,900
|
|
|
660,700
|
|
Average realized price per pound
|
|
$2.88
|
|
$2.02
|
|
$3.13
|
|
|
$1.85
|
|
Gold (recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
514,000
|
|
1,116,600
|
|
1,731,800
|
|
|
2,789,400
|
|
Sales
|
|
507,500
|
|
1,103,500
|
|
1,736,000
|
|
|
2,790,200
|
|
Average realized price per ounce
|
|
$627.71
|
|
$494.01
|
|
$566.51a
|
|
|
$456.27
|
|
Silver (recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
1,191,500
|
|
1,361,600
|
|
3,797,900
|
|
|
4,742,400
|
|
Sales
|
|
1,167,800
|
|
1,341,100
|
|
3,806,200
|
|
|
4,734,600
|
|
Average realized price per ounce
|
|
$12.93
|
|
$7.97
|
|
$8.59b
|
|
|
$6.36b
|
|
|
PT Freeport Indonesia, 100% Aggregate
|
|
|
|
|
|
|
|
|
|
|
Ore milled (metric tons per day)
|
|
246,500
|
|
236,900
|
|
229,400
|
|
|
216,200
|
|
Average ore grade
|
|
|
|
|
|
|
|
|
|
|
Copper (percent)
|
|
1.08
|
|
1.31
|
|
0.85
|
|
|
1.13
|
|
Gold (grams per metric ton)
|
|
0.95
|
|
2.33
|
|
0.85
|
|
|
1.65
|
|
Gold (ounce per metric ton)
|
|
0.031
|
|
0.075
|
|
0.027
|
|
|
0.053
|
|
Silver (grams per metric ton)
|
|
3.87
|
|
5.36
|
|
3.84
|
|
|
4.88
|
|
Silver (ounce per metric ton)
|
|
0.124
|
|
0.172
|
|
0.123
|
|
|
0.157
|
|
Recovery rates (percent)
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
89.5
|
|
91.1
|
|
86.1
|
|
|
89.2
|
|
Gold
|
|
84.2
|
|
84.0
|
|
80.9
|
|
|
83.1
|
|
Silver
|
|
66.5
|
|
62.7
|
|
52.3
|
|
|
58.2
|
|
Copper (recoverable)
|
|
|
|
|
|
|
|
|
|
|
Production (000s of pounds)
|
|
468,800
|
|
554,700
|
|
1,299,500
|
|
|
1,688,900
|
|
Production (metric tons)
|
|
212,600
|
|
251,600
|
|
589,400
|
|
|
766,100
|
|
Sales (000s of pounds)
|
|
465,900
|
|
548,900
|
|
1,300,000
|
|
|
1,689,400
|
|
Sales (metric tons)
|
|
211,400
|
|
249,000
|
|
589,700
|
|
|
766,300
|
|
Gold (recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
571,300
|
|
1,357,600
|
|
1,824,100
|
|
|
3,439,600
|
|
Sales
|
|
564,200
|
|
1,341,600
|
|
1,831,100
|
|
|
3,437,800
|
|
Silver (recoverable ounces)
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
1,601,800
|
|
1,914,000
|
|
4,313,100
|
|
|
5,791,400
|
|
Sales
|
|
1,592,100
|
|
1,897,100
|
|
4,314,800
|
|
|
5,795,200
|
|
|
a. Amount was $606.36 before a loss resulting from redemption of
FCX's Gold-Denominated Preferred Stock, Series II.
|
|
b. Amounts were $11.92 for the 2006 twelve-month period and $7.38
for the 2005 twelve-month period before losses resulting from
redemption of FCX's Silver-Denominated Preferred Stock.
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA
|
|
|
|
Fourth Quarter
|
|
Twelve Months
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
Atlantic Copper
|
|
|
|
|
|
|
|
|
Concentrate and scrap treated (metric tons)
|
|
229,600
|
|
259,100
|
|
953,700
|
|
975,400
|
Anodes
|
|
|
|
|
|
|
|
|
Production (000s of pounds)
|
|
137,100
|
|
157,500
|
|
581,300
|
|
626,600
|
Production (metric tons)
|
|
62,200
|
|
71,400
|
|
263,700
|
|
284,200
|
Sales (000s of pounds)
|
|
2,100
|
|
21,000
|
|
59,800
|
|
85,100
|
Sales (metric tons)
|
|
900
|
|
9,500
|
|
27,100
|
|
38,600
|
Cathodes
|
|
|
|
|
|
|
|
|
Production (000s of pounds)
|
|
133,400
|
|
137,600
|
|
518,900
|
|
545,300
|
Production (metric tons)
|
|
60,500
|
|
62,400
|
|
235,400
|
|
247,300
|
Sales (000s of pounds)
|
|
136,300
|
|
136,700
|
|
529,200
|
|
548,600
|
Sales (metric tons)
|
|
61,800
|
|
62,000
|
|
240,000
|
|
248,800
|
Gold sales in anodes and slimes (ounces)
|
|
97,300
|
|
120,200
|
|
666,500
|
|
542,800
|
Cathode cash unit cost per pounda
|
|
$0.21
|
|
$0.17
|
|
$0.20
|
|
$0.17
|
|
PT Smelting, 25%-owned by PT Freeport Indonesia
|
|
|
|
|
|
|
|
|
Concentrate treated (metric tons)
|
|
100,700
|
|
228,800
|
|
737,500
|
|
908,900
|
Anodes
|
|
|
|
|
|
|
|
|
Production (000s of pounds)
|
|
61,100
|
|
154,800
|
|
443,500
|
|
606,300
|
Production (metric tons)
|
|
27,700
|
|
70,200
|
|
201,200
|
|
275,000
|
Cathodes
|
|
|
|
|
|
|
|
|
Production (000s of pounds)
|
|
82,300
|
|
145,400
|
|
479,700
|
|
579,700
|
Production (metric tons)
|
|
37,300
|
|
65,900
|
|
217,600
|
|
262,900
|
Sales (000s of pounds)
|
|
89,400
|
|
147,000
|
|
483,700
|
|
580,900
|
Sales (metric tons)
|
|
40,500
|
|
66,700
|
|
219,400
|
|
263,500
|
Cathode cash unit cost per poundb
|
|
$0.23
|
|
$0.17
|
|
$0.20
|
|
$0.13
|
|
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 the attached
presentation, "Cathode Cash Unit Costs."
|
|
b. For a reconciliation of cathode cash unit cost per pound to
equity in PT Smelting's earnings (losses) reported in FCX's
consolidated financial statements refer to the attached
presentation, "Cathode Cash Unit Costs."
|
|
|
Three Months Ended
|
|
|
Years Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2006
|
|
2005
|
|
|
2006
|
|
|
2005
|
|
|
|
(In Thousands, Except Per Share Amounts)
|
Revenuesa
|
|
$1,642,127
|
|
$1,489,874
|
|
|
$5,790,500
|
|
|
$4,179,118
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
Production and deliveryb
|
|
649,950
|
|
447,672
|
|
|
2,524,857
|
|
|
1,637,632
|
|
Depreciation and amortization
|
|
80,139
|
|
78,781c
|
|
|
227,571
|
|
|
251,512c
|
|
Total cost of sales
|
|
730,089
|
|
526,453
|
|
|
2,752,428
|
|
|
1,889,144
|
|
Exploration expensesb
|
|
3,560
|
|
2,382
|
|
|
12,255
|
|
|
8,803
|
|
General and administrative expensesb, d
|
|
46,242
|
|
31,346
|
|
|
157,070
|
|
|
103,885
|
|
Total costs and expenses
|
|
779,891
|
|
560,181
|
|
|
2,921,753
|
|
|
2,001,832
|
|
Operating income
|
|
862,236
|
|
929,693
|
|
|
2,868,747
|
|
|
2,177,286
|
|
Equity in PT Smelting earnings (losses)
|
|
(583)
|
|
2,829
|
|
|
6,490
|
|
|
9,302
|
|
Interest expense, net
|
|
(13,336)
|
|
(25,469)
|
|
|
(75,587)e
|
|
|
(131,639)
|
|
Gains (losses) on early extinguishment and conversion of debt
|
|
77
|
|
(13,831)
|
|
|
(32,049)
|
|
|
(52,210)
|
|
Gains on sales of assets
|
|
946
|
|
6,631
|
|
|
30,635
|
|
|
6,631
|
|
Other income, net
|
|
10,420
|
|
7,868
|
|
|
27,635
|
|
|
27,568
|
|
Income before income taxes and minority interests
|
|
859,760
|
|
907,721
|
|
|
2,825,871
|
|
|
2,036,938
|
|
Provision for income taxes
|
|
(365,365)
|
|
(375,644)
|
|
|
(1,201,175)
|
|
|
(915,068)
|
|
Minority interests in net income of consolidated subsidiaries
|
|
(52,828)
|
|
(53,772)
|
|
|
(168,187)
|
|
|
(126,743)
|
|
Net income
|
|
441,567
|
|
478,305
|
|
|
1,456,509
|
|
|
995,127
|
|
Preferred dividends
|
|
(15,125)
|
|
(15,125)
|
|
|
(60,500)
|
|
|
(60,500)
|
|
Net income applicable to common stock
|
|
$426,442
|
|
$463,180
|
|
|
$1,396,009
|
|
|
$934,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$2.17
|
|
$2.50
|
|
|
$7.32
|
|
|
$5.18
|
|
Dilutedf
|
|
$1.99
|
|
$2.19
|
|
|
$6.63
|
|
|
$4.67
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
196,945
|
|
185,542
|
|
|
190,730
|
|
|
180,270
|
|
Dilutedf
|
|
221,690
|
|
221,025
|
|
|
221,498
|
|
|
220,470
|
|
Dividends paid per share of common stock
|
|
$1.8125
|
|
$0.75
|
|
|
$4.75
|
|
|
$2.50
|
|
|
|
Fourth Quarter
|
|
Years Ended
December 31,
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
Production and delivery costs
|
|
$7.3
|
|
$2.9
|
|
$25.1
|
|
$7.3
|
Exploration expenses
|
|
0.3
|
|
-
|
|
1.3
|
|
-
|
General and administrative expenses
|
|
9.2
|
|
5.7
|
|
30.3
|
|
16.2
|
Total stock-based compensation costs
|
|
$16.8
|
|
$8.6
|
|
$56.7
|
|
$23.5
|
c. Includes $3.7 million for the 2005 quarter for amortization of
deferred mining costs. Amount is net of deferred mining costs of
$64.9 million for the year ended December 31, 2005. On January 1,
2006, FCX adopted new accounting rules, described in Note a on page
IV, which require that stripping costs incurred during production be
charged to cost of sales as incurred.
|
|
d. Includes Rio Tinto's share of joint venture reimbursements for
employee stock option exercises which decreased general and
administrative expenses by $0.5 million for the 2006 quarter, $3.3
million for the 2005 quarter, $6.5 million for the year ended
December 31, 2006, and $9.2 million for the year ended December 31,
2005.
|
|
e. Includes gains from the disposition of certain nonoperating
assets owned by Atlantic Copper.
|
|
f. Reflects assumed conversion of FCX's 7% Convertible Senior Notes
and 5 1/2% Convertible Perpetual Preferred Stock, resulting in the
exclusion of net interest expense and dividends and the inclusion of
shares as shown below (in millions):
|
|
|
Fourth Quarter
|
|
Years Ended
December 31,
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
Interest expense, net
|
|
$0.1
|
|
$5.4
|
|
$12.7
|
|
$35.1
|
Preferred dividends
|
|
$15.1
|
|
$15.1
|
|
$60.5
|
|
$60.5
|
Shares
|
|
23.0
|
|
33.0
|
|
29.2
|
|
38.0
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
|
(In Thousands)
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$907,464
|
|
|
$763,599
|
|
Accounts receivable
|
|
485,769
|
|
|
687,969
|
|
Inventories
|
|
724,248
|
|
|
565,019
|
|
Prepaid expenses and other
|
|
33,556
|
|
|
5,795
|
|
Total current assets
|
|
2,151,037
|
|
|
2,022,382
|
|
Property, plant, equipment and development costs, net
|
|
3,098,502
|
|
|
3,088,931
|
|
Deferred mining costs
|
|
-a
|
|
|
285,355a
|
|
Other assets
|
|
105,910
|
|
|
119,999
|
|
Investment in PT Smelting
|
|
34,353
|
|
|
33,539
|
|
Total assets
|
|
$5,389,802
|
|
|
$5,550,206
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$520,212
|
|
|
$491,385
|
|
Accrued income taxes
|
|
164,387
|
|
|
327,041
|
|
Unearned customer receipts
|
|
125,763
|
|
|
57,184
|
|
Rio Tinto share of joint venture cash flows
|
|
69,289
|
|
|
125,809
|
|
Accrued royalties payable
|
|
51,382
|
|
|
61,818
|
|
Accrued interest payable
|
|
22,300
|
|
|
32,034
|
|
Current portion of long-term debt and short-term borrowings
|
|
19,116
|
|
|
253,350
|
|
Total current liabilities
|
|
972,449
|
|
|
1,348,621
|
|
Long-term debt, less current portion:
|
|
|
|
|
|
|
Senior notes
|
|
612,900
|
|
|
624,365
|
|
Equipment and other loans
|
|
41,021
|
|
|
54,529
|
|
Convertible senior notes
|
|
7,071
|
|
|
323,667
|
|
Atlantic Copper debt
|
|
7
|
|
|
37
|
|
Total long-term debt, less current portion
|
|
660,999
|
|
|
1,002,598
|
|
Accrued postretirement benefits and other liabilities
|
|
297,915
|
|
|
230,616
|
|
Deferred income taxes
|
|
800,310
|
|
|
902,386
|
|
Minority interests
|
|
213,028
|
|
|
222,991
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
Convertible perpetual preferred stock
|
|
1,099,985
|
|
|
1,100,000
|
|
Class B common stock
|
|
30,992
|
|
|
29,696
|
|
Capital in excess of par value of common stock
|
|
2,668,109
|
|
|
2,212,246
|
|
Retained earnings
|
|
1,414,817a
|
|
|
1,086,191
|
|
Accumulated other comprehensive (loss) income
|
|
(19,854)b
|
|
|
10,749
|
|
Common stock held in treasury
|
|
(2,748,948)
|
|
|
(2,595,888)
|
|
Total stockholders’ equity
|
|
2,445,101
|
|
|
1,842,994
|
|
Total liabilities and stockholders’ equity
|
|
$5,389,802
|
|
|
$5,550,206
|
|
|
a. On January 1, 2006, FCX adopted Emerging Issues Task Force Issue
No. 04-6, "Accounting for Stripping Costs Incurred during Production
in the Mining Industry" (EITF 04-6), which requires that stripping
costs incurred during production be considered costs of the
extracted minerals and included as a component of inventory to be
recognized in cost of sales in the same period as the revenue from
the sale of inventory. Upon adoption of EITF 04-6, FCX recorded its
deferred mining costs asset ($285.4 million) at December 31, 2005,
net of taxes, minority interest share and inventory effects ($135.9
million), as a cumulative effect adjustment to reduce its retained
earnings on January 1, 2006. In addition, stripping costs incurred
in 2006 and later periods are now charged to cost of sales as
incurred. Adoption of the new guidance has no impact on FCX's cash
flows.
|
|
b. Effective December 31, 2006, FCX adopted SFAS 158, "Employers'
Accounting for Defined Benefit Pension and Other Postretirement
Plans," which requires companies to recognize the funded status of
its benefit plans in its statement of financial position. The most
significant impacts of adopting SFAS 158 were to increase accrued
postretirement benefits and accumulated other comprehensive losses
by approximately $25 million.
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
Years Ended December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
|
(In Thousands)
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
Net income
|
|
$1,456,509
|
|
|
$995,127
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
227,571
|
|
|
251,512
|
|
Minority interests' share of net income
|
|
168,187
|
|
|
126,743
|
|
Deferred income taxes
|
|
15,743
|
|
|
(32,347)
|
|
Stock-based compensation
|
|
55,443
|
|
|
21,168
|
|
Long-term compensation and postretirement benefits
|
|
29,103
|
|
|
7,819
|
|
Losses on early extinguishment and conversion of debt
|
|
32,049
|
|
|
52,210
|
|
Gains on sales of assets
|
|
(30,635)
|
|
|
(6,631)
|
|
Equity in PT Smelting earnings
|
|
(6,490)
|
|
|
(9,302)
|
|
Increase in deferred mining costs
|
|
- a
|
|
|
(64,940)a
|
|
Elimination of profit on PT Freeport Indonesia sales to PT Smelting
|
|
2,962
|
|
|
23,565
|
|
Provision for inventory obsolescence
|
|
6,000
|
|
|
6,000
|
|
Other
|
|
23,890
|
|
|
2,773
|
|
(Increases) decreases in working capital:
|
|
|
|
|
|
|
Accounts receivable
|
|
196,523
|
|
|
(252,934)
|
|
Inventories
|
|
(146,188)
|
|
|
(108,225)
|
|
Prepaid expenses and other
|
|
(27,025)
|
|
|
(45)
|
|
Accounts payable and accrued liabilities
|
|
71,034
|
|
|
216,331
|
|
Rio Tinto share of joint venture cash flows
|
|
(56,365)
|
|
|
66,133
|
|
Accrued income taxes
|
|
(151,887)
|
|
|
257,588
|
|
(Increase) decrease in working capital
|
|
(113,908)
|
|
|
178,848
|
|
Net cash provided by operating activities
|
|
1,866,424
|
|
|
1,552,545
|
|
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
PT Freeport Indonesia capital expenditures
|
|
(233,730)
|
|
|
(129,190)
|
|
Atlantic Copper and other capital expenditures
|
|
(16,810)
|
|
|
(13,796)
|
|
Sales of assets
|
|
33,563
|
|
|
6,631
|
|
Investment in PT Smelting
|
|
(1,945)
|
|
|
-
|
|
Phelps Dodge acquisition costs
|
|
(4,576)
|
|
|
-
|
|
Proceeds from insurance settlement
|
|
-
|
|
|
2,016
|
|
Net cash used in investing activities
|
|
(223,498)
|
|
|
(134,339)
|
|
|
|
|
|
|
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
Proceeds from debt
|
|
102,862
|
|
|
66,058
|
|
Repayments of debt and redemption of preferred stock
|
|
(394,054)
|
|
|
(559,286)
|
|
Cash dividends paid:
|
|
|
|
|
|
|
Common stock
|
|
(915,775)
|
|
|
(452,510)
|
|
Preferred stock
|
|
(60,500)
|
|
|
(60,501)
|
|
Minority interests
|
|
(161,152)b
|
|
|
(124,636)b
|
|
Purchases of FCX common shares
|
|
(99,783)
|
|
|
(80,227)
|
|
Net proceeds from exercised stock options
|
|
15,280
|
|
|
5,081
|
|
Excess tax benefit from exercised stock options
|
|
20,819c
|
|
|
-
|
|
Other
|
|
(6,758)
|
|
|
(36)
|
|
Net cash used in financing activities
|
|
(1,499,061)
|
|
|
(1,206,057)
|
|
Net increase in cash and cash equivalents
|
|
143,865
|
|
|
212,149
|
|
Cash and cash equivalents at beginning of year
|
|
763,599
|
|
|
551,450
|
|
Cash and cash equivalents at end of year
|
|
$907,464
|
|
|
$763,599
|
|
|
a. See Note a on page IV. Stripping costs are no longer deferred and
are included in net income.
|
|
b. Represents minority ownership interests' share of PT Freeport
Indonesia and PT Puncakjaya Power dividends.
|
|
c. Prior to adoption of SFAS 123R, these amounts would have been
classified as operating cash flows.
|
FREEPORT-McMoRan COPPER & GOLD INC.
PRODUCT REVENUES AND PRODUCTION COSTS
PT FREEPORT INDONESIA PRODUCT REVENUES AND UNIT NET CASH COSTS
Unit net cash costs per pound of copper is a measure intended to provide
investors with information about the cash generating capacity of PT
Freeport Indonesia’s mining operations
expressed on a basis relating to its primary metal product, copper. PT
Freeport Indonesia uses this measure for the same purpose and for
monitoring operating performance by its mining operations. This
information differs from measures of performance determined in
accordance with generally accepted accounting principles and should not
be considered in isolation or as a substitute for measures of
performance determined in accordance with generally accepted accounting
principles. This measure is presented by other copper and gold mining
companies, although PT Freeport Indonesia’s
measures may not be comparable to similarly titled measures reported by
other companies.
PT Freeport Indonesia presents gross profit per pound of copper using
both a “by-product”
method and a “co-product”
method. PT Freeport Indonesia uses the by-product method in its
presentation of gross profit per pound of copper because (1) the
majority of its revenues are copper revenues, (2) it produces and sells
one product, concentrates, which contains copper, gold and silver, (3)
it is not possible to specifically assign PT Freeport Indonesia’s
costs to revenues from the copper, gold and silver it produces in
concentrates, (4) it is the method used to compare mining operations in
certain industry publications and (5) it is the method used by PT
Freeport Indonesia’s management and Board of
Directors to monitor its operations. In the co-product method
presentation below, costs are allocated to the different products based
on their relative revenue values, which will vary to the extent our
metals sales volumes and realized prices change.
In both the by-product and the co-product method calculations below, PT
Freeport Indonesia shows adjustments to copper revenues for prior period
open sales as separate line items. Because the copper pricing
adjustments do not result from current period sales, PT Freeport
Indonesia has reflected these separately from revenues on current period
sales. Noncash and nonrecurring costs consist of items such as
stock-based compensation costs starting January 1, 2006, write-offs of
equipment or unusual charges. They are removed from site production and
delivery costs in the calculation of unit net cash costs. As discussed
above, gold and silver revenues, excluding any impacts from redemption
of the gold- and silver-denominated preferred stocks, are reflected as
credits against site production and delivery costs in the by-product
method. Presentations under both methods are shown below together with a
reconciliation to amounts reported in FCX’s
consolidated financial statements.
|
FREEPORT-McMoRan COPPER & GOLD INC.
PRODUCT REVENUES AND PRODUCTION COSTS
|
|
Three Months Ended December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By-Product
|
|
|
Co-Product Method
|
(In Thousands)
|
|
Method
|
|
|
Copper
|
|
|
Gold
|
|
|
Silver
|
|
|
Total
|
Revenues, after adjustments shown below
|
|
$1,241,445
|
|
|
$1,241,445
|
|
|
$319,115
|
|
|
$15,647
|
|
|
$1,576,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
costs shown below
|
|
334,166
|
|
|
263,194
|
|
|
67,655
|
|
|
3,317
|
|
|
334,166
|
Gold and silver credits
|
|
(334,762)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Treatment charges
|
|
145,098a
|
|
|
114,281b
|
|
|
29,376b
|
|
|
1,441b
|
|
|
145,098b
|
Royalty on metals
|
|
46,144
|
|
|
36,344
|
|
|
9,342
|
|
|
458
|
|
|
46,144
|
Unit net cash costs
|
|
190,646
|
|
|
413,819
|
|
|
106,373
|
|
|
5,216
|
|
|
525,408
|
Depreciation and amortization
|
|
66,115
|
|
|
52,073
|
|
|
13,386
|
|
|
656
|
|
|
66,115
|
Noncash and nonrecurring costs, net
|
|
13,644
|
|
|
10,747
|
|
|
2,762
|
|
|
135
|
|
|
13,644
|
Total unit costs
|
|
270,405
|
|
|
476,639
|
|
|
122,521
|
|
|
6,007
|
|
|
605,167
|
Revenue adjustments, primarily for pricing on prior period open
sales
|
|
(84,496)
|
|
|
(84,496)
|
|
|
-
|
|
|
-
|
|
|
(84,496)
|
PT Smelting intercompany profit recognized
|
|
4,406
|
|
|
3,470
|
|
|
892
|
|
|
44
|
|
|
4,406
|
Gross profit
|
|
$890,950
|
|
|
$683,780
|
|
|
$197,486
|
|
|
$9,684
|
|
|
$890,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds of copper sold (000s)
|
|
432,500
|
|
|
432,500
|
|
|
|
|
|
|
|
|
|
Ounces of gold sold
|
|
|
|
|
|
|
|
507,500
|
|
|
|
|
|
|
Ounces of silver sold
|
|
|
|
|
|
|
|
|
|
|
1,167,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit per pound of copper/per ounce of gold and silver:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, after adjustments shown below
|
|
$2.88
|
|
|
$2.88
|
|
|
$627.71
|
|
|
$12.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
costs shown below
|
|
0.77
|
|
|
0.61
|
|
|
133.31
|
|
|
2.84
|
|
|
|
Gold and silver credits
|
|
(0.77)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
Treatment charges
|
|
0.33a
|
|
|
0.27b
|
|
|
57.88b
|
|
|
1.23b
|
|
|
|
Royalty on metals
|
|
0.11
|
|
|
0.08
|
|
|
18.41
|
|
|
0.39
|
|
|
|
Unit net cash costs
|
|
0.44
|
|
|
0.96
|
|
|
209.60
|
|
|
4.46
|
|
|
|
Depreciation and amortization
|
|
0.15
|
|
|
0.12
|
|
|
26.38
|
|
|
0.56
|
|
|
|
Noncash and nonrecurring costs, net
|
|
0.04
|
|
|
0.02
|
|
|
5.44
|
|
|
0.12
|
|
|
|
Total unit costs
|
|
0.63
|
|
|
1.10
|
|
|
241.42
|
|
|
5.14
|
|
|
|
Revenue adjustments, primarily for pricing on prior period open
sales
|
|
(0.21)
|
|
|
(0.21)
|
|
|
1.09
|
|
|
0.46
|
|
|
|
PT Smelting intercompany profit recognized
|
|
0.02
|
|
|
0.01
|
|
|
1.76
|
|
|
0.04
|
|
|
|
Gross profit per pound/ounce
|
|
$2.06
|
|
|
$1.58
|
|
|
$389.14
|
|
|
$8.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Amounts Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
Revenues
|
|
|
Production and Delivery
|
|
|
Depreciation and
Amortization
|
|
|
|
|
|
|
Totals presented above
|
|
$1,576,207
|
|
|
$334,166
|
|
|
$66,115
|
|
|
|
|
|
|
Net noncash and nonrecurring costs per above
|
|
N/A
|
|
|
13,644
|
|
|
N/A
|
|
|
|
|
|
|
Less: Treatment charges per above
|
|
(145,098)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Royalty per above
|
|
(46,144)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Revenue adjustments, primarily for pricing on prior period open
sales per above
|
|
(84,496)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Mining and exploration segment
|
|
1,300,469
|
|
|
347,810
|
|
|
66,115
|
|
|
|
|
|
|
Smelting and refining segment
|
|
519,496
|
|
|
485,315
|
|
|
10,410
|
|
|
|
|
|
|
Eliminations and other
|
|
(177,838)
|
|
|
(183,175)
|
|
|
3,614
|
|
|
|
|
|
|
As reported in FCX’s consolidated
financial statements
|
|
$1,642,127
|
|
|
$649,950
|
|
|
$80,139
|
|
|
|
|
|
|
|
a. Includes reductions of $4.4 million or $0.01 per pound for
adjustments to prior quarters' concentrate sales subject to final
pricing to reflect the impact on treatment charges resulting from
the decrease in copper prices since September 30, 2006.
|
|
b. Includes reductions of $3.5 million or $0.01 per pound for
copper, $0.9 million or $1.77 per ounce for gold and less than $0.1
million or $0.04 per ounce for silver for adjustments to prior
quarters' concentrate sales subject to final pricing to reflect the
impact on treatment charges resulting from the decrease in copper
prices since September 30, 2006.
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
PRODUCT REVENUES AND PRODUCTION COSTS
|
|
Three Months Ended December 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By-Product
|
|
|
Co-Product Method
|
(In Thousands)
|
|
Method
|
|
|
Copper
|
|
|
Gold
|
|
|
Silver
|
|
|
Total
|
Revenues, after adjustments shown below
|
|
$966,416
|
|
|
$966,416
|
|
|
$544,478
|
|
|
$11,257
|
|
|
$1,522,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
credits shown below
|
|
290,511a
|
|
|
184,446b
|
|
|
103,917b
|
|
|
2,148b
|
|
|
290,511b
|
Gold and silver credits
|
|
(555,735)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Treatment charges
|
|
124,872
|
|
|
79,281
|
|
|
44,668
|
|
|
923
|
|
|
124,872
|
Royalty on metals
|
|
46,859
|
|
|
29,751
|
|
|
16,761
|
|
|
347
|
|
|
46,859
|
Unit net cash (credits) costs
|
|
(93,493)
|
|
|
293,478
|
|
|
165,346
|
|
|
3,418
|
|
|
462,242
|
Depreciation and amortization
|
|
67,428
|
|
|
42,810
|
|
|
24,119
|
|
|
499
|
|
|
67,428
|
Noncash and nonrecurring credits, net
|
|
(706)
|
|
|
(448)
|
|
|
(253)
|
|
|
(5)
|
|
|
(706)
|
Total unit (credits) costs
|
|
(26,771)
|
|
|
335,840
|
|
|
189,212
|
|
|
3,912
|
|
|
528,964
|
Revenue adjustments, primarily for pricing on prior period open
sales
|
|
80,588
|
|
|
80,588
|
|
|
-
|
|
|
-
|
|
|
80,588
|
PT Smelting intercompany profit elimination
|
|
(20,445)
|
|
|
(12,981)
|
|
|
(7,313)
|
|
|
(151)
|
|
|
(20,445)
|
Gross profit
|
|
$1,053,330
|
|
|
$698,183
|
|
|
$347,953
|
|
|
$7,194
|
|
|
$1,053,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds of copper sold (000s)
|
|
468,400
|
|
|
468,400
|
|
|
|
|
|
|
|
|
|
Ounces of gold sold
|
|
|
|
|
|
|
|
1,103,500
|
|
|
|
|
|
|
Ounces of silver sold
|
|
|
|
|
|
|
|
|
|
|
1,341,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit per pound of copper/per ounce of gold and silver:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, after adjustments shown below
|
|
$2.02
|
|
|
$2.02
|
|
|
$494.01
|
|
|
$7.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
credits shown below
|
|
0.62a
|
|
|
0.39b
|
|
|
94.17b
|
|
|
1.60b
|
|
|
|
Gold and silver credits
|
|
(1.19)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
Treatment charges
|
|
0.27
|
|
|
0.17
|
|
|
40.48
|
|
|
0.69
|
|
|
|
Royalty on metals
|
|
0.10
|
|
|
0.07
|
|
|
15.19
|
|
|
0.26
|
|
|
|
Unit net cash (credits) costs
|
|
(0.20)
|
|
|
0.63
|
|
|
149.84
|
|
|
2.55
|
|
|
|
Depreciation and amortization
|
|
0.14
|
|
|
0.09
|
|
|
21.86
|
|
|
0.37
|
|
|
|
Noncash and nonrecurring credits, net
|
|
-
|
|
|
-
|
|
|
(0.23)
|
|
|
-
|
|
|
|
Total unit (credits) costs
|
|
(0.06)
|
|
|
0.72
|
|
|
171.47
|
|
|
2.92
|
|
|
|
Revenue adjustments, primarily for pricing on prior period open
sales
|
|
0.21
|
|
|
0.21
|
|
|
(0.59)
|
|
|
0.42
|
|
|
|
PT Smelting intercompany profit elimination
|
|
(0.04)
|
|
|
(0.02)
|
|
|
(6.63)
|
|
|
(0.11)
|
|
|
|
Gross profit per pound/ounce
|
|
$2.25
|
|
|
$1.49
|
|
|
$315.32
|
|
|
$5.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Amounts Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
Revenues
|
|
|
Production
and
Delivery
|
|
|
Depreciation
and
Amortization
|
|
|
|
|
|
|
Totals presented above
|
|
$1,522,151
|
|
|
$290,511
|
|
|
$67,428
|
|
|
|
|
|
|
Net noncash and nonrecurring credits per above
|
|
N/A
|
|
|
(706)
|
|
|
N/A
|
|
|
|
|
|
|
Less: Treatment charges per above
|
|
(124,872)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Royalty per above
|
|
(46,859)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Revenue adjustments, primarily for pricing on prior period open
sales per above
|
|
80,588
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Mining and exploration segment
|
|
1,431,008
|
|
|
289,805
|
|
|
67,428
|
|
|
|
|
|
|
Smelting and refining segment
|
|
380,783
|
|
|
351,607
|
|
|
7,350
|
|
|
|
|
|
|
Eliminations and other
|
|
(321,917)
|
|
|
(193,740)
|
|
|
4,003
|
|
|
|
|
|
|
As reported in FCX’s consolidated
financial statements
|
|
$1,489,874
|
|
|
$447,672
|
|
|
$78,781
|
|
|
|
|
|
|
|
a. Includes amortization of deferred mining costs totaling $3.7
million or $0.01 per pound. Following adoption of EITF 04-6 on
January 1, 2006, stripping costs are no longer deferred. See Note a
on page IV.
|
|
b. Includes amortization of deferred mining costs totaling $2.3
million or less than $0.01 per pound for copper, $1.3 million or
$1.19 per ounce for gold and less than $50,000 or $0.02 per ounce
for silver. See Note a above and Note a on page IV.
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
PRODUCT REVENUES AND PRODUCTION COSTS
|
|
Year Ended December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By-Product
|
|
|
Co-Product Method
|
(In Thousands)
|
|
Method
|
|
|
Copper
|
|
|
Gold
|
|
|
Silver
|
|
|
Total
|
Revenues, after adjustments shown below
|
|
$3,763,964
|
|
|
$3,763,964
|
|
|
$1,072,452
|
|
|
$46,762
|
|
|
$4,883,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
costs shown below
|
|
1,235,004
|
|
|
951,943
|
|
|
271,234
|
|
|
11,827
|
|
|
1,235,004
|
Gold and silver credits
|
|
(1,119,214)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Treatment charges
|
|
477,523a
|
|
|
368,076b
|
|
|
104,874b
|
|
|
4,573b
|
|
|
477,523b
|
Royalty on metals
|
|
125,995
|
|
|
97,117
|
|
|
27,671
|
|
|
1,207
|
|
|
125,995
|
Unit net cash costs
|
|
719,308
|
|
|
1,417,136
|
|
|
403,779
|
|
|
17,607
|
|
|
1,838,522
|
Depreciation and amortization
|
|
183,752
|
|
|
141,636
|
|
|
40,356
|
|
|
1,760
|
|
|
183,752
|
Noncash and nonrecurring costs, net
|
|
44,269
|
|
|
34,123
|
|
|
9,722
|
|
|
424
|
|
|
44,269
|
Total unit costs
|
|
947,329
|
|
|
1,592,895
|
|
|
453,857
|
|
|
19,791
|
|
|
2,066,543
|
Revenue adjustments, primarily for pricing on prior period open
sales and gold/silver hedging
|
|
115,124c
|
|
|
197,341
|
|
|
(68,962)
|
|
|
(13,255)
|
|
|
115,124
|
PT Smelting intercompany profit elimination
|
|
(2,962)
|
|
|
(2,283)
|
|
|
(651)
|
|
|
(28)
|
|
|
(2,962)
|
Gross profit
|
|
$2,928,797
|
|
|
$2,366,127
|
|
|
$548,982
|
|
|
$13,688
|
|
|
$2,928,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds of copper sold (000s)
|
|
1,201,400
|
|
|
1,201,400
|
|
|
|
|
|
|
|
|
|
Ounces of gold sold
|
|
|
|
|
|
|
|
1,736,000
|
|
|
|
|
|
|
Ounces of silver sold
|
|
|
|
|
|
|
|
|
|
|
3,806,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit per pound of copper/per ounce of gold and silver:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, after adjustments shown below
|
|
$3.13
|
|
|
$3.13
|
|
|
$566.51
|
d
|
|
$8.59
|
e
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
0.40a
|
|
|
0.31b
|
|
|
60.41b
|
|
|
1.20b
|
|
|
|
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
|
|
0.10c
|
|
|
0.17
|
|
|
11.53
|
|
|
0.22
|
|
|
|
PT Smelting intercompany profit elimination
|
|
-
|
|
|
-
|
|
|
(0.37)
|
|
|
(0.01)
|
|
|
|
Gross profit per pound/ounce
|
|
$2.44
|
|
|
$1.97
|
|
|
$316.23
|
|
|
$3.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Amounts Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
Revenues
|
|
|
Production
and
Delivery
|
|
|
Depreciation
and
Amortization
|
|
|
|
|
|
|
Totals presented above
|
|
$4,883,178
|
|
|
$1,235,004
|
|
|
$183,752
|
|
|
|
|
|
|
Net noncash and nonrecurring costs per above
|
|
N/A
|
|
|
44,269
|
|
|
N/A
|
|
|
|
|
|
|
Less: Treatment charges per above
|
|
(477,523)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Royalty per above
|
|
(125,995)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Revenue adjustments, primarily for pricing on prior period open
sales and hedging per above
|
|
115,124
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Mining and exploration segment
|
|
4,394,784
|
|
|
1,279,273
|
|
|
183,752
|
|
|
|
|
|
|
Smelting and refining segment
|
|
2,241,823
|
|
|
2,118,484
|
|
|
33,297
|
|
|
|
|
|
|
Eliminations and other
|
|
(846,107)
|
|
|
(872,900)
|
|
|
10,522
|
|
|
|
|
|
|
As reported in FCX’s consolidated
financial statements
|
|
$5,790,500
|
|
|
$2,524,857
|
|
|
$227,571
|
|
|
|
|
|
|
|
a. Includes $12.4 million or $0.01 per pound for adjustments to 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 $9.6 million or $0.01 per pound for copper, $2.7 million
or $1.57 per ounce for gold and $0.1 million or $0.03 per ounce for
silver for adjustments to 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 a $69.0 million or $0.06 per pound loss on the
redemption of FCX's Gold-Denominated Preferred Stock, Series II and
a $13.3 million or $0.01 per pound loss on the redemption of FCX's
Silver-Denominated Preferred Stock.
|
|
d. Amount was $606.36 before a loss resulting from redemption of
FCX's Gold-Denominated Preferred Stock, Series II.
|
|
e. Amount was $11.92 before a loss resulting from redemption of
FCX's Silver-Denominated Preferred Stock.
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
PRODUCT REVENUES AND PRODUCTION COSTS
|
|
Year Ended December 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By-Product
|
|
|
Co-Product Method
|
(In Thousands)
|
|
Method
|
|
|
Copper
|
|
|
Gold
|
|
|
Silver
|
|
|
Total
|
Revenues, after adjustments shown below
|
|
$2,707,049
|
|
|
$2,707,049
|
|
|
$1,269,893
|
|
|
$35,165
|
|
|
$4,012,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
costs shown below
|
|
949,469a
|
|
|
640,626b
|
|
|
300,521b
|
|
|
8,322b
|
|
|
949,469
|
Gold and silver credits
|
|
(1,305,058)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Treatment charges
|
|
350,422
|
|
|
236,437
|
|
|
110,914
|
|
|
3,071
|
|
|
350,422
|
Royalty on metals
|
|
103,726
|
|
|
69,986
|
|
|
32,831
|
|
|
909
|
|
|
103,726
|
Unit net cash costs
|
|
98,559
|
|
|
947,049
|
|
|
444,266
|
|
|
12,302
|
|
|
1,403,617
|
Depreciation and amortization
|
|
209,713
|
|
|
141,498
|
|
|
66,377
|
|
|
1,838
|
|
|
209,713
|
Noncash and nonrecurring costs, net
|
|
4,570
|
|
|
3,083
|
|
|
1,447
|
|
|
40
|
|
|
4,570
|
Total unit costs
|
|
312,842
|
|
|
1,091,630
|
|
|
512,090
|
|
|
14,180
|
|
|
1,617,900
|
Revenue adjustments, primarily for pricing on prior period open
sales and silver hedging
|
|
10,023c
|
|
|
14,975
|
|
|
-
|
|
|
(4,952)
|
|
|
10,023
|
PT Smelting intercompany profit elimination
|
|
(23,565)
|
|
|
(15,899)
|
|
|
(7,459)
|
|
|
(207)
|
|
|
(23,565)
|
Gross profit
|
|
$2,380,665
|
|
|
$1,614,495
|
|
|
$750,344
|
|
|
$15,826
|
|
|
$2,380,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds of copper sold (000s)
|
|
1,456,500
|
|
|
1,456,500
|
|
|
|
|
|
|
|
|
|
Ounces of gold sold
|
|
|
|
|
|
|
|
2,790,200
|
|
|
|
|
|
|
Ounces of silver sold
|
|
|
|
|
|
|
|
|
|
|
4,734,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit per pound of copper/per ounce of gold and silver:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, after adjustments shown below
|
|
$1.85
|
|
|
$1.85
|
|
|
$456.27
|
|
|
$6.36d
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site production and delivery, before net noncash and nonrecurring
costs shown below
|
|
0.65a
|
|
|
0.44b
|
|
|
107.71b
|
|
|
1.76b
|
|
|
|
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
|
|
0.01c
|
|
|
0.02
|
|
|
(1.14)
|
|
|
0.02
|
|
|
|
PT Smelting intercompany profit elimination
|
|
(0.01)
|
|
|
(0.01)
|
|
|
(2.67)
|
|
|
(0.04)
|
|
|
|
Gross profit per pound/ounce
|
|
$1.64
|
|
|
$1.11
|
|
|
$268.92
|
|
|
$3.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Amounts Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands)
|
|
Revenues
|
|
|
Production
and
Delivery
|
|
|
Depreciation
and
Amortization
|
|
|
|
|
|
|
Totals presented above
|
|
$4,012,107
|
|
|
$949,469
|
|
|
$209,713
|
|
|
|
|
|
|
Net noncash and nonrecurring costs per above
|
|
N/A
|
|
|
4,570
|
|
|
N/A
|
|
|
|
|
|
|
Less: Treatment charges per above
|
|
(350,422)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Royalty per above
|
|
(103,726)
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Revenue adjustments, primarily for pricing on prior period open
sales and hedging per above
|
|
10,023
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
Mining and exploration segment
|
|
3,567,982
|
|
|
954,039
|
|
|
209,713
|
|
|
|
|
|
|
Smelting and refining segment
|
|
1,363,208
|
|
|
1,288,610
|
|
|
28,995
|
|
|
|
|
|
|
Eliminations and other
|
|
(752,072)
|
|
|
(605,017)
|
|
|
12,804
|
|
|
|
|
|
|
As reported in FCX’s consolidated
financial statements
|
|
$4,179,118
|
|
|
$1,637,632
|
|
|
$251,512
|
|
|
|
|
|
|
|
a. Net of deferred mining costs totaling $64.9 million or $0.05 per
pound. Following adoption of EITF Issue No. 04-6 on January 1, 2006,
stripping costs are no longer deferred. See Note a on page IV.
|
|
b. Net of deferred mining costs totaling $43.8 million or $0.03 per
pound for copper, $20.6 million or $7.37 per ounce for gold and $0.6
million or $0.12 per ounce for silver. See Note a above and Note a
on page IV.
|
|
c. Includes a $5.0 million or less than $0.01 per pound loss on the
redemption of FCX's Silver-Denominated Preferred Stock.
|
|
d. Amount was $7.38 before a loss resulting from redemption of FCX's
Silver-Denominated Preferred Stock.
|
FREEPORT-McMoRan COPPER & GOLD INC.
CATHODE CASH UNIT COSTS
Cathode cash unit cost per pound of copper is a measure intended to
provide investors with information about the costs incurred to produce
cathodes at FCX’s smelting operations in
Spain and Indonesia. FCX uses this measure for the same purpose and for
monitoring operating performance at its smelting operations. This
information differs from measures of performance determined in
accordance with generally accepted accounting principles and should not
be considered in isolation or as a substitute for measures of
performance determined in accordance with generally accepted accounting
principles. Other smelting companies present this measure, although
Atlantic Copper’s and PT Smelting’s
measures may not be comparable to similarly titled measures reported by
other companies.
ATLANTIC COPPER CATHODE CASH UNIT COST PER POUND OF COPPER
The reconciliation below presents reported production costs for FCX’s
smelting and refining segment (Atlantic Copper) and subtracts or adds
components of those costs that do not directly relate to the process of
converting copper concentrates to cathodes. The adjusted production
costs amounts are used to calculate Atlantic Copper’s
cathode cash unit cost per pound of copper (in thousands, except per
pound amounts):
|
|
Three Months Ended
|
|
Years Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
Smelting and refining segment production costs reported in FCX’s
consolidated financial statements
|
|
$485,315
|
|
$351,607
|
|
$2,118,484
|
|
$1,288,610
|
Less:
|
|
|
|
|
|
|
|
|
Raw material purchase costs
|
|
(385,374)
|
|
(263,159)
|
|
(1,586,656)
|
|
(907,130)
|
Production costs of anodes sold
|
|
(447)
|
|
(3,219)
|
|
(11,223)
|
|
(13,226)
|
Other
|
|
1,016
|
|
1,301
|
|
10,282
|
|
(958)
|
Credits:
|
|
|
|
|
|
|
|
|
Gold and silver revenues
|
|
(65,660)
|
|
(57,136)
|
|
(399,739)
|
|
(245,772)
|
Acid and other by-product revenues
|
|
(6,736)
|
|
(6,038)
|
|
(27,257)
|
|
(28,446)
|
Production costs used in calculating cathode cash unit cost per
pound
|
|
$28,114
|
|
$23,356
|
|
$103,891
|
|
$93,078
|
|
|
|
|
|
|
|
|
|
Pounds of cathode produced
|
|
133,400
|
|
137,600
|
|
518,900
|
|
545,300
|
|
|
|
|
|
|
|
|
|
Cathode cash unit cost per pound
|
|
$0.21
|
|
$0.17
|
|
$0.20
|
|
$0.17
|
PT SMELTING CATHODE CASH UNIT COST PER POUND OF COPPER
The calculation below presents PT Smelting’s
reported operating costs and subtracts or adds components of those costs
that do not directly relate to the process of converting copper
concentrates to cathodes. PT Smelting’s
operating costs are then reconciled to PT Freeport Indonesia’s
equity in PT Smelting earnings reported in FCX’s
consolidated financial statements (in thousands, except per pound
amounts):
|
|
Three Months Ended
|
|
Years Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
Operating costs – PT Smelting (100%)
|
|
$15,801
|
|
$27,776
|
|
$99,200
|
|
$85,546
|
Add: Gold and silver refining charges
|
|
697
|
|
1,046
|
|
3,965
|
|
4,233
|
Less: Acid and other by-product revenues
|
|
(1,717)
|
|
(3,407)
|
|
(12,722)
|
|
(14,524)
|
Other
|
|
3,826
|
|
(983)
|
|
6,052
|
|
(1,944)
|
Production costs used in calculating cathode cash unit cost per
pound
|
|
$18,607
|
|
$24,432
|
|
$96,495
|
|
$73,311
|
|
|
|
|
|
|
|
|
|
Pounds of cathode produced
|
|
82,300
|
|
145,400
|
|
479,700
|
|
579,700
|
|
|
|
|
|
|
|
|
|
Cathode cash unit cost per pound
|
|
$0.23
|
|
$0.17
|
|
$0.20
|
|
$0.13
|
|
|
|
|
|
|
|
|
|
Reconciliation to Amounts Reported
|
|
|
|
|
|
|
|
|
Operating costs per above
|
|
$(15,801)
|
|
$(27,776)
|
|
$(99,200)
|
|
$(85,546)
|
Other costs
|
|
(396,420)
|
|
(354,869)
|
|
(1,916,975)
|
|
(1,278,356)
|
Revenue and other income
|
|
410,129
|
|
394,202
|
|
2,043,096
|
|
1,402,071
|
PT Smelting net income (loss)
|
|
(2,092)
|
|
11,557
|
|
26,921
|
|
38,169
|
|
|
|
|
|
|
|
|
|
PT Freeport Indonesia’s 25% equity
interest
|
|
(523)
|
|
2,889
|
|
6,730
|
|
9,542
|
Amortization of excess investment cost
|
|
(60)
|
|
(60)
|
|
(240)
|
|
(240)
|
Equity in PT Smelting earnings (losses) reported in FCX’s
consolidated financial statements
|
|
$(583)
|
|
$2,829
|
|
$6,490
|
|
$9,302
|
FREEPORT-McMoRan COPPER & GOLD INC.
PROVISION FOR INCOME TAXES
|
|
PROVISION FOR INCOME TAXES
PT Freeport Indonesia's Contract of Work provides for a 35 percent
corporate income tax rate. PT Indocopper Investama (100 percent
owned by FCX) pays a 30 percent corporate income tax on dividends
it receives from its 9.36 percent ownership in PT Freeport
Indonesia. In addition, the tax treaty between Indonesia and the
United States (U.S.) provides for a withholding tax rate of 10
percent on dividends and interest that PT Freeport Indonesia and
PT Indocopper Investama pay to their parent company, FCX. FCX
currently records no income taxes at Atlantic Copper, which is
subject to taxation in Spain, because it has not generated
significant taxable income in recent years and has substantial tax
loss carryforwards for which FCX has provided no net financial
statement benefit. FCX receives no consolidated tax benefit from
these losses because they cannot be used to offset PT Freeport
Indonesia's profits in Indonesia, but can be utilized to offset
Atlantic Copper's future profits.
Parent company costs consist primarily of interest, depreciation
and amortization, and general and administrative expenses. FCX
receives minimal, if any, tax benefit from these costs, including
interest expense, primarily because the parent company normally
generates no taxable income from U.S. sources. As a result, FCX's
provision for income taxes as a percentage of its consolidated
income before income taxes and minority interests will vary as PT
Freeport Indonesia's income changes, absent changes in Atlantic
Copper and parent company costs. Summaries of the approximate
significant components of the calculation of FCX's consolidated
provision for income taxes are shown below (in thousands, except
percentages).
|
|
|
|
Three Months Ended
|
|
Years Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2006
|
|
2005
|
|
2006
|
|
2005
|
Mining and exploration segment operating incomea
|
|
$847,999
|
|
$1,044,436
|
|
$2,797,963
|
|
$2,312,771
|
Mining and exploration segment interest expense, net
|
|
(2,674)
|
|
(5,420)
|
|
(19,833)
|
|
(22,386)
|
Intercompany operating profit recognized (deferred)
|
|
7,703
|
|
(127,862)
|
|
32,426
|
|
(144,986)
|
Income before taxes
|
|
853,028
|
|
911,154
|
|
2,810,556
|
|
2,145,399
|
Indonesian corporate income tax rate
|
|
35%
|
|
35%
|
|
35%
|
|
35%
|
Corporate income taxes
|
|
298,560
|
|
318,904
|
|
983,695
|
|
750,890
|
|
|
|
|
|
|
|
|
|
Approximate PT Freeport Indonesia net income
|
|
554,468
|
|
592,250
|
|
1,826,861
|
|
1,394,509
|
Withholding tax on FCX’s equity share
|
|
9.064%
|
|
9.064%
|
|
9.064%
|
|
9.064%
|
Withholding taxes
|
|
50,257
|
|
53,682
|
|
165,587
|
|
126,398
|
|
|
|
|
|
|
|
|
|
PT Indocopper Investama corporate income tax
|
|
14,058
|
|
5,623
|
|
47,797
|
|
36,544
|
Other, net
|
|
2,490
|
|
(2,565)
|
|
4,096
|
|
1,236
|
FCX consolidated provision for income taxes
|
|
$365,365
|
|
$375,644
|
|
$1,201,175
|
|
$915,068
|
|
|
|
|
|
|
|
|
|
FCX consolidated effective tax rate
|
|
42%
|
|
41%
|
|
43%
|
|
45%
|
|
a. Excludes charges for the in-the-money value of FCX stock option
exercises, which are eliminated in consolidation, totaling $0.8
million for the 2006 quarter, $30.3 million for the 2005 quarter,
$88.3 million for the year ended December 31, 2006, and $64.5
million for the year ended December 31, 2005.
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
BUSINESS SEGMENTS
|
|
BUSINESS SEGMENTS
FCX has two operating segments: "mining and exploration" and
"smelting and refining." The mining and exploration segment
consists of FCX's Indonesian activities including PT Freeport
Indonesia's copper and gold mining operations, PT Puncakjaya
Power's power-generating operations (after eliminations with PT
Freeport Indonesia) and FCX's Indonesian exploration activities.
The smelting and refining segment includes Atlantic Copper's
operations in Spain and PT Freeport Indonesia's equity investment
in PT Smelting in Gresik, Indonesia. The segment data presented
below were prepared on the same basis as FCX's consolidated
financial statements.
|
|
|
|
Mining
and Exploration
|
|
|
Smelting
and Refining
|
|
|
Eliminations and Other
|
|
|
FCX Total
|
|
|
(In Thousands)
|
Three months ended December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$1,300,469a
|
|
|
$519,496
|
|
|
$(177,838)
|
|
|
$1,642,127
|
Production and delivery
|
|
347,810
|
|
|
485,315
|
|
|
(183,175)b
|
|
|
649,950
|
Depreciation and amortization
|
|
66,115
|
|
|
10,410
|
|
|
3,614
|
|
|
80,139
|
Exploration expenses
|
|
3,158
|
|
|
-
|
|
|
402
|
|
|
3,560
|
General and administrative expenses
|
|
36,138c
|
|
|
4,649
|
|
|
5,455c
|
|
|
46,242
|
Operating income
|
|
$847,248
|
|
|
$19,122
|
|
|
$(4,134)
|
|
|
$862,236
|
Equity in PT Smelting losses
|
|
$-
|
|
|
$(583)
|
|
|
$-
|
|
|
$
(583)
|
Interest expense, net
|
|
$2,674
|
|
|
$7,344
|
|
|
$3,318
|
|
|
$13,336
|
Provision for income taxes
|
|
$297,462
|
|
|
$-
|
|
|
$67,903
|
|
|
$365,365
|
Capital expenditures
|
|
$70,055
|
|
|
$3,868
|
|
|
$(1,395)
|
|
|
$72,528
|
Total assets
|
|
$4,118,018d
|
|
|
$915,124e
|
|
|
$356,660
|
|
|
$5,389,802
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$1,431,008a
|
|
|
$380,783
|
|
|
$(321,917)
|
|
|
$1,489,874
|
Production and delivery
|
|
289,805
|
|
|
351,607
|
|
|
(193,740)b
|
|
|
447,672
|
Depreciation and amortization
|
|
67,428
|
|
|
7,350
|
|
|
4,003
|
|
|
78,781
|
Exploration expenses
|
|
2,355
|
|
|
-
|
|
|
27
|
|
|
2,382
|
General and administrative expenses
|
|
57,333c
|
|
|
2,651
|
|
|
(28,638)c
|
|
|
31,346
|
Operating income
|
|
$1,014,087
|
|
|
$19,175
|
|
|
$(103,569)
|
|
|
$929,693
|
Equity in PT Smelting earnings
|
|
$-
|
|
|
$2,829
|
|
|
$-
|
|
|
$2,829
|
Interest expense, net
|
|
$5,420
|
|
|
$4,630
|
|
|
$15,419
|
|
|
$25,469
|
Provision for income taxes
|
|
$351,077
|
|
|
$-
|
|
|
$24,567
|
|
|
$375,644
|
Capital expenditures
|
|
$43,596
|
|
|
$2,924
|
|
|
$859
|
|
|
$47,379
|
Total assets
|
|
$4,623,829d
|
|
|
$933,059b
|
e
|
|
$(6,682)
|
|
|
$5,550,206
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$4,394,784a
|
|
|
$2,241,823
|
|
|
$(846,107)
|
|
|
$5,790,500
|
Production and delivery
|
|
1,279,273
|
|
|
2,118,484
|
|
|
(872,900)b
|
|
|
2,524,857
|
Depreciation and amortization
|
|
183,752
|
|
|
33,297
|
|
|
10,522
|
|
|
227,571
|
Exploration expenses
|
|
11,637
|
|
|
-
|
|
|
618
|
|
|
12,255
|
General and administrative expenses
|
|
210,423c
|
|
|
15,551
|
|
|
(68,904)c
|
|
|
157,070
|
Operating income
|
|
$2,709,699
|
|
|
$74,491
|
|
|
$84,557
|
|
|
$2,868,747
|
Equity in PT Smelting earnings
|
|
$-
|
|
|
$6,490
|
|
|
$-
|
|
|
$6,490
|
Interest expense, net
|
|
$19,833
|
|
|
$24,467
|
|
|
$31,287
|
|
|
$75,587
|
Provision for income taxes
|
|
$950,911
|
|
|
$-
|
|
|
$250,264
|
|
|
$1,201,175
|
Capital expenditures
|
|
$237,745
|
|
|
$16,810
|
|
|
$(4,015)
|
|
|
$250,540
|
|
FREEPORT-McMoRan COPPER & GOLD INC.
BUSINESS SEGMENTS
|
|
|
|
Mining
and
Exploration
|
|
|
Smelting
and Refining
|
|
|
Eliminations
and Other
|
|
|
FCX Total
|
|
|
(In Thousands)
|
Year ended December 31, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$3,567,982a
|
|
|
$1,363,208
|
|
|
$(752,072)
|
|
|
$4,179,118
|
Production and delivery
|
|
954,039
|
|
|
1,288,610
|
|
|
(605,017)b
|
|
|
1,637,632
|
Depreciation and amortization
|
|
209,713
|
|
|
28,995
|
|
|
12,804
|
|
|
251,512
|
Exploration expenses
|
|
8,618
|
|
|
-
|
|
|
185
|
|
|
8,803
|
General and administrative expenses
|
|
147,334c
|
|
|
10,824
|
|
|
(54,273)c
|
|
|
103,885
|
Operating income
|
|
$2,248,278
|
|
|
$34,779
|
|
|
$(105,771)
|
|
|
$2,177,286
|
Equity in PT Smelting earnings
|
|
$-
|
|
|
$9,302
|
|
|
$-
|
|
|
$9,302
|
Interest expense, net
|
|
$22,386
|
|
|
$16,962
|
|
|
$92,291
|
|
|
$131,639
|
Provision for income taxes
|
|
$781,013
|
|
|
$-
|
|
|
$134,055
|
|
|
$915,068
|
Capital expenditures
|
|
$129,551
|
|
|
$10,231
|
|
|
$3,204
|
|
|
$142,986
|
|
a. Includes PT Freeport Indonesia's sales to PT Smelting totaling
$136.7 million for the 2006 quarter, $365.4 million for the 2005
quarter, $1,202.2 million for the year ended December 31, 2006, and
$1,008.5 million for the year ended December 31, 2005.
|
|
b. Includes deferrals (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 $(4.4)
million for the 2006 quarter, $20.4 million for the 2005 quarter,
$3.0 million for the year ended December 31, 2006, and $23.6 million
for the year ended December 31, 2005.
|
|
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 $0.8 million for the 2006
quarter, $30.3 million for the 2005 quarter, $88.3 million for the
year ended December 31, 2006, and $64.5 million for the year ended
December 31, 2005.
|
|
d. Includes PT Freeport Indonesia's trade receivables with PT
Smelting totaling $142.9 million at December 31, 2006, and $162.0
million at December 31, 2005.
|
|
e. Includes PT Freeport Indonesia's equity investment in PT Smelting
totaling $34.4 million at December 31, 2006, and $33.5 million at
December 31, 2005.
|