News Release Details

FCX Reports Third-Quarter and Nine-Month 2009 Results

10/21/09

PHOENIX--(BUSINESS WIRE)--Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX):

  • Net income attributable to common stock for third-quarter 2009 was $925 million, $2.07 per share, compared with $523 million, $1.31 per share, for third-quarter 2008. Net income attributable to common stock for the first nine months of 2009 was $1.6 billion, $3.70 per share, compared with $2.6 billion, $6.20 per share, for the first nine months of 2008.
  • Consolidated sales from mines for third-quarter 2009 totaled 1.0 billion pounds of copper, 706 thousand ounces of gold and 16 million pounds of molybdenum, compared with 1.0 billion pounds of copper, 307 thousand ounces of gold and 19 million pounds of molybdenum for third-quarter 2008.
  • Consolidated sales from mines for the year 2009 are expected to approximate 4.0 billion pounds of copper, 2.5 million ounces of gold and 56 million pounds of molybdenum, including 915 million pounds of copper, 425 thousand ounces of gold and 14 million pounds of molybdenum for fourth-quarter 2009.
  • Consolidated unit net cash costs (net of by-product credits and excluding Tenke Fungurume) averaged $0.50 per pound for third-quarter 2009, compared with $1.29 per pound for third-quarter 2008. Assuming average prices of $1,000 per ounce for gold and $10 per pound for molybdenum for the fourth quarter of 2009, consolidated unit net cash costs are estimated to average approximately $0.60 per pound for the year 2009.
  • Operating cash flows totaled $2.0 billion for third-quarter 2009 and $2.9 billion for the first nine months of 2009. Using estimated sales volumes and assuming average prices of $2.75 per pound for copper, $1,000 per ounce for gold and $10 per pound for molybdenum for the fourth quarter of 2009, operating cash flows for the year 2009 are estimated to exceed $4.0 billion, net of $0.3 billion in working capital requirements.
  • Capital expenditures totaled $244 million for third-quarter 2009 and $1.1 billion for the first nine months of 2009. FCX currently expects capital expenditures to approximate $1.4 billion for the year 2009, including $0.6 billion for sustaining capital and $0.8 billion for major projects.
  • At September 30, 2009, total debt approximated $6.6 billion and consolidated cash approximated $2.3 billion. During the third quarter of 2009, FCX repaid $340 million of debt through the redemption of its 6 7/8% Senior Notes due 2014 and made open market purchases totaling $191 million for its 8.25% and 8.375% senior notes. Since September 30, 2009, FCX has made additional open-market debt purchases totaling $107 million. These transactions reduced total debt by $638 million and will result in annual interest cost savings approximating $48 million.
  • Conversion of Preferred Stock. During the third quarter of 2009, FCX called for redemption its 5 1/2% Convertible Perpetual Preferred Stock. Holders of $831 million of FCX’s preferred stock converted their shares of preferred stock into 17.9 million common shares. Annual preferred dividend savings approximate $46 million.
  • Common Stock Dividend. FCX announced that its Board of Directors has reinstated an annual cash dividend on its common stock of $0.60 per share. The Board would declare a quarterly dividend of $0.15 per share, with the initial dividend expected to be paid on February 1, 2010.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported third-quarter 2009 net income attributable to common stock of $925 million, $2.07 per share, compared with $523 million, $1.31 per share, for the third quarter of 2008. For the nine months ended September 30, 2009, FCX reported net income attributable to common stock of $1.6 billion, $3.70 per share, compared with $2.6 billion, $6.20 per share, in the 2008 nine-month period.

James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, “Our third-quarter results reflect strong operating performance, high volumes from our Grasberg mine and improved commodity prices for our products – copper, gold and molybdenum. We are benefiting from improvements in our cost structure, particularly at our North America mines. We are positioned to pursue additional investments and growth opportunities within our existing asset base, when economies in the developed countries recover. Our strong performance in 2009 has enabled our Board to reinstate a cash dividend for our shareholders. We will continue to focus our cash flows on strengthening our balance sheet, investing in our future growth and providing cash returns to shareholders.”






SUMMARY FINANCIAL AND OPERATING DATA








Third Quarter
Nine Months


2009
2008
2009
2008
Financial Data (in millions, except per share amounts)











Revenuesa
$ 4,144

$ 4,616

$ 10,430

$ 15,729
Operating income
$ 2,084

$ 1,133

$ 4,264

$ 5,582
Net income
$ 1,203

$ 742

$ 2,222

$ 3,531
Net income attributable to common stockb
$ 925c

$ 523

$ 1,556c

$ 2,592
Diluted net income per share of common stock
$ 2.07c

$ 1.31

$ 3.70c

$ 6.20
Diluted weighted-average common shares outstandingd

472


447


428 e


449
Operating cash flows
$ 1,954e

$ 1,54e

$ 2,850e

$ 3,169e
Capital expenditures
$ 244

$ 766

$ 1,138

$ 1,929













FCX Operating Data











Copper (millions of recoverable pounds)











Production

1,015


1,024


3,125


2,845
Sales, excluding purchased metal

1,000


1,016


3,122


2,869
Average realized price per pound
$ 2.75

$ 3.14

$ 2.35

$ 3.43
Site production and delivery unit costs per poundf
$ 1.15

$ 1.66

$ 1.08

$ 1.58
Unit net cash costs per poundf
$ 0.50

$ 1.29

$ 0.53

$ 1.21
Gold (thousands of recoverable ounces)











Production

708


300


2,105


825
Sales, excluding purchased metal

706


307


2,088


852
Average realized price per ounce
$ 987

$ 869

$ 944

$ 897
Molybdenum (millions of recoverable pounds)











Production

15


21


42


57
Sales, excluding purchased metal

16


19


42


59
Average realized price per pound
$ 13.95

$ 32.11

$ 11.93

$ 31.78

a. Includes impacts of adjustments to provisionally priced concentrate and cathode sales recognized in prior periods (see discussion beginning on page 8).

b. After noncontrolling interests and preferred dividends.

c. Includes losses on early extinguishment of debt totaling $31 million ($28 million to net income attributable to common stock or $0.06 per share in third-quarter 2009 and $0.07 per share in the first nine months of 2009).

d. As applicable, diluted shares reflect the assumed conversion of FCX’s 5½% Convertible Perpetual Preferred Stock and 6¾% Mandatory Convertible Preferred Stock. See footnote d on page IV. In addition, the 2009 periods include 26.8 million shares of common stock sold in February 2009.

e. Includes working capital sources (uses) of $450 million in third-quarter 2009, $568 million in third-quarter 2008, $(523) million in the first nine months of 2009 and $(1.5) billion in the first nine months of 2008.

f. Reflects per pound weighted average site production and delivery unit costs and unit net cash costs, net of by-product credits and excluding Tenke Fungurume which is currently in start up. For reconciliations of unit costs per pound by operating division to production and delivery costs reported in FCX’s consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX’s web site, www.fcx.com.



OPERATIONS

Consolidated. Third-quarter 2009 consolidated copper sales of 1.0 billion pounds approximated third-quarter 2008 copper sales and were higher than the July 2009 estimate of 910 million pounds. The variance to the previous estimate primarily reflects accelerated mining of a high-grade section in the Grasberg open pit previously forecast to be mined in future periods.

Third-quarter 2009 consolidated gold sales of 706 thousand ounces were significantly higher than third-quarter 2008 gold sales of 307 thousand ounces and the July 2009 estimate of 550 thousand ounces, reflecting accelerated mining of a high-grade section in the Grasberg open pit.

Consolidated molybdenum sales of 16 million pounds in the third quarter of 2009 were lower than third-quarter 2008 sales of 19 million pounds but were slightly higher than the July 2009 estimate of 15 million pounds. The decline from the year-ago period reflects reduced demand for molybdenum in the metallurgical and chemical sectors.

Consolidated unit site production and delivery costs, excluding Tenke Fungurume, averaged $1.15 per pound of copper in third-quarter 2009, 31 percent lower than third-quarter 2008 unit costs of $1.66 per pound. Third-quarter 2009 unit net cash costs, after by-product credits, of $0.50 per pound were significantly lower than the year-ago period of $1.29 per pound. The improved unit cost performance primarily reflects higher ore grades at Grasberg, reduced operating rates at North America mining operations to lower production of high-cost incremental volumes, achievement of cost savings initiatives and operating efficiencies, and lower energy and other commodity-based input costs.

Assuming average prices of $2.75 per pound for copper, $1,000 per ounce for gold and $10 per pound for molybdenum for the fourth quarter of 2009, unit net cash costs are expected to average approximately $0.60 per pound for the year 2009. Because of the impact of projected lower fourth-quarter 2009 copper and gold sales volumes from Grasberg, average unit net cash costs of $0.85 per pound for fourth-quarter 2009 are expected to be higher than third-quarter 2009 unit net cash costs. FCX will incorporate Tenke Fungurume in its consolidated unit net cash cost disclosures upon completion of ramp-up activities, expected in 2010.

North America Copper Mines. FCX operates five open-pit copper mines in North America (Morenci, Sierrita, Bagdad and Safford in Arizona and Tyrone in New Mexico). By-product molybdenum is produced primarily at Sierrita and Bagdad. All of the North America mining operations are wholly owned, except for Morenci. FCX records its 85 percent joint venture interest in Morenci using the proportionate consolidation method.










Third Quarter

Nine Months
North America Copper Mining Operations
2009

2008

2009

2008

















Copper (millions of recoverable pounds)















Production

290


374


851


1,051
Sales, excluding purchased metal

303


361


885


1,047
Average realized price per pound
$ 2.69

$ 3.42

$ 2.15

$ 3.56

















Molybdenum (millions of recoverable pounds)a















Production

7


7


20


22




































Third Quarter

Nine Months
North America Copper Mining Operations
2009

2008

2009

2008

















Unit net cash costs per pound of copper:















Site production and delivery, after adjustments
$ 1.22

$ 2.07

$ 1.26

$ 1.86
By-product credits, primarily molybdenum

(0.29)


(0.65)


(0.23)


(0.71)
Treatment charges

0.08


0.09


0.09


0.09
Unit net cash costsb
$ 1.01

$ 1.51

$ 1.12

$ 1.24

a. Represents by-product production. Sales of by-product molybdenum are reflected in the molybdenum division discussion on page 8.

b. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX’s web site, www.fcx.com.



Consolidated copper sales in North America totaled 303 million pounds in the third quarter of 2009, 16 percent lower than third-quarter 2008 sales. FCX continues to operate at reduced rates at certain of its North America copper mines in response to reduced demand for copper in the western world.

For the year 2009, FCX expects sales from North America copper mines to approximate 1.2 billion pounds of copper, compared with 1.4 billion pounds of copper for 2008. By-product molybdenum production is expected to approximate 26 million pounds in 2009, compared with 30 million pounds in 2008. North America copper production in 2010 is currently expected to approximate 1.0 billion pounds, reflecting impacts of reduced 2009 mining activities on 2010 leaching operations.

North America unit site production and delivery costs were significantly lower in the 2009 periods as compared with the 2008 periods primarily because of cost reduction and efficiency efforts, including the impact of lower operating rates and reduced input costs, primarily for energy. These decreases were partly offset by changes in inventory, reflecting the impact of historical production in inventory with a higher cost basis. Molybdenum by-product credits were significantly lower in the 2009 periods compared with the 2008 periods primarily because of lower molybdenum prices.

Based on current operating plans and assuming achievement of current sales estimates, an average molybdenum price of $10 per pound for the fourth quarter of 2009 and estimates for commodity-based input costs, FCX estimates that average unit net cash costs, including molybdenum credits, for its North America copper mines would approximate $1.12 per pound of copper for the year 2009. Unit net cash costs for the year 2009 would change by approximately $0.003 per pound for each $1 per pound change in the average price of molybdenum for the fourth quarter of 2009.

Development Activities. FCX is initiating activities to restart copper production at the Miami mine in Arizona. These activities will improve efficiencies of ongoing reclamation projects associated with historical mining operations at the site. During the approximate five-year mine life, FCX expects to ramp up production to approximately 100 million pounds of copper per year by the second half of 2011. This project, which was initially expected to require a $100 million investment, was deferred in late 2008 in response to market conditions. FCX intends to transfer existing mining equipment from other North American sites to reduce the investment in the project to approximately $40 million. Operating plans at the other North American sites continue to be reviewed and additional adjustments will be made in response to changes in market conditions.

South America Copper Mines. FCX operates four copper mines in South America – Cerro Verde in Peru and Candelaria, Ojos del Salado and El Abra in Chile. FCX owns a 53.56 percent interest in Cerro Verde, an open-pit mine currently producing both electrowon copper cathodes and copper concentrates. FCX owns 80 percent of the Candelaria and Ojos del Salado mining complexes, which include the Candelaria open-pit and underground mines and the Ojos del Salado underground mines. These mines use common processing facilities to produce copper concentrates. FCX owns a 51 percent interest in El Abra, an open-pit mine producing electrowon copper cathodes. All operations in South America are consolidated in FCX’s financial statements.










Third Quarter

Nine Months
South America Copper Mining Operations
2009

2008

2009

2008

















Copper (millions of recoverable pounds)















Production

340


394


1,046


1,116
Sales

327


391


1,040


1,122
Average realized price per pound
$ 2.79

$ 3.02

$ 2.43

$ 3.38

















Gold (thousands of recoverable ounces)















Production

22


32


69


83
Sales

20


30


68


83
Average realized price per ounce
$ 976

$ 856

$ 935

$ 891

















Unit net cash costs per pound of copper:















Site production and delivery, after adjustments
$ 1.14

$ 1.22

$ 1.05

$ 1.15
By-product credits, primarily gold

(0.10)


(0.15)


(0.11)


(0.13)
Treatment charges

0.15


0.09


0.15


0.16
Unit net cash costsa
$ 1.19

$ 1.16

$ 1.09

$ 1.18

a. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX’s web site, www.fcx.com.



Consolidated copper sales in South America totaled 327 million pounds in the third quarter of 2009, 16 percent lower than third-quarter 2008 sales, primarily reflecting lower ore grades at Candelaria and downtime for mill maintenance at Cerro Verde.

For the year 2009, FCX expects South America sales of 1.4 billion pounds of copper and 100 thousand ounces of gold, compared with 1.5 billion pounds of copper and 116 thousand ounces of gold for 2008. Projected sales volumes for the year 2009 are lower than the year 2008 because of the impact of lower ore grades at Candelaria.

South America unit site production and delivery costs were slightly lower in the 2009 periods as compared with the 2008 periods primarily because of lower input costs, primarily for energy. Treatment charges were higher in the third quarter of 2009 compared with the third quarter of 2008 because the year-ago period was reduced by prior period adjustments related to the significant decline of copper prices in the third quarter of 2008.

Assuming achievement of current sales estimates and estimates for commodity-based input costs, FCX estimates that average unit net cash costs, including gold credits, for its South America copper mines would approximate $1.11 per pound of copper for the year 2009.

Development Activities. FCX is resuming construction activities associated with the development of the sulfide ore at El Abra. The project, which had been deferred as a result of market conditions at the end of 2008, involves the development of a large sulfide deposit that will extend the mine life by over ten years. Production from the sulfide ore of approximately 300 million pounds of copper per year is expected to replace the current oxide copper production that is expected to decline over the next several years. The project will utilize a portion of the existing facilities to process the additional sulfide ore. The capital investment for this project is expected to total $600 million through 2015, including $450 million for the initial phase of the project that is expected to be completed in 2012.

FCX has also commenced a project to optimize throughput at the existing Cerro Verde concentrator operations. The project is expected to increase mill throughput from 108,000 metric tons of ore per day to 120,000 metric tons per day, resulting in incremental annual production of approximately 30 million pounds of copper. The capital investment for this project is expected to total approximately $50 million. FCX continues to study the potential for a major expansion at Cerro Verde.

Indonesia Mining. Through its 90.64 percent owned and wholly consolidated subsidiary PT Freeport Indonesia (PT-FI), FCX operates the world’s largest copper and gold mine in terms of reserves at its Grasberg operations in Papua, Indonesia.










Third Quarter

Nine Months
Indonesia Mining Operations
2009

2008

2009

2008

















Copper (millions of recoverable pounds)















Production

331


256


1,138


678
Sales

330


264


1,131


700
Average realized price per pound
$ 2.77

$ 2.94

$ 2.41

$ 3.33

















Gold (thousands of recoverable ounces)















Production

685


264


2,033


731
Sales

683


271


2,015


757
Average realized price per ounce
$ 988

$ 870

$ 944

$ 897

















Unit net cash (credits) costs per pound of copper:

















Site production and delivery, after adjustments
$ 1.10

$ 1.76

$ 0.98

$ 1.84
Gold and silver credits

(2.10)


(0.93)


(1.74)


(1.04)
Treatment charges

0.24


0.24


0.22


0.28
Royalties

0.12


0.12


0.10


0.12
Unit net cash (credits) costsa
$ (0.64)

$ 1.19

$ (0.44)

$ 1.20

a. For a reconciliation of unit net cash (credits) costs per pound to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX’s web site, www.fcx.com.



Indonesia copper and gold sales in the third quarter of 2009 were significantly higher than in the third quarter of 2008 as a result of mining of a higher ore grade section in the Grasberg open pit, including accelerated mining of a higher grade section previously scheduled to be mined in future periods. 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.

FCX expects Indonesia sales of 1.4 billion pounds of copper and 2.4 million ounces of gold for the year 2009, compared with 1.1 billion pounds of copper and 1.2 million ounces of gold for 2008. Gold sales for 2009 are expected to be 100 thousand ounces higher than the July 2009 estimate because of the accelerated mining of a section of the Grasberg mine previously expected to be mined in 2010. Copper and gold sales volumes in the fourth quarter of 2009 are expected to be lower than third-quarter 2009 volumes because of mine sequencing.

PT-FI’s unit net cash (credits) costs, including gold and silver credits, averaged a net credit of $0.64 per pound of copper for the third quarter of 2009, compared with a net cost of $1.19 per pound for the third quarter of 2008. The lower unit net cash costs in the 2009 periods primarily reflected higher copper and gold volumes. 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.

Assuming achievement of current 2009 sales estimates, average gold prices of $1,000 per ounce for the fourth quarter of 2009 and current estimates for energy, currency exchange rates and other cost factors, FCX expects PT-FI’s average unit net cash costs per pound to approximate a net credit of $0.33 per pound for the year 2009. Fourth-quarter 2009 unit net cash costs are expected to be higher than third-quarter and year-to-date 2009 average unit net cash costs because of lower projected sales volumes. Unit net cash costs for 2009 would change by approximately $0.015 per pound for each $50 per ounce change in the average price of gold for the fourth quarter of 2009.

Africa Mining. FCX holds an effective 57.75 percent interest in the Tenke Fungurume copper and cobalt mining concessions in the Katanga province of the Democratic Republic of Congo (DRC) and is the operator of the project. Construction activities on the initial project are substantially complete. Copper cathode production commenced in March 2009 and achieved targeted rates in September. The cobalt plant and sulphuric acid plant were commissioned in the third quarter and start-up issues are being addressed. The current operations are designed to produce 250 million pounds of copper and 18 million pounds of cobalt per year. The following table presents Tenke Fungurume’s operating results for the periods ended September 30, 2009:








Third
Nine
Africa Mining Operations
Quarter
Months








Copper (millions of recoverable pounds)






Production

54


90
Sales

40


66
Average realized price per pound
$ 2.76

$ 2.57
















The high grades of copper and cobalt in the ore at Tenke Fungurume are expected to result in an attractive cost structure once the full operation reaches design capacity. Upon reaching design capacity in the copper and cobalt circuits and assuming average cobalt prices of $10 per pound, average unit net cash costs are targeted to be $0.50 per pound of copper or lower. Each $2 per pound change in average prices of cobalt would impact unit net cash costs by $0.12 per pound of copper. Costs in the initial operations will be higher as start-up issues are addressed. FCX will incorporate Tenke Fungurume in its unit net cash cost disclosures upon completion of ramp-up activities, expected in 2010.

FCX continues to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective district at Tenke Fungurume and expects its ore reserves to increase significantly over time. These analyses are being incorporated in future plans to evaluate opportunities for expansion. FCX plans to commence a feasibility study in the fourth quarter of 2009 to evaluate a second phase of the project, which would include optimizing the current plant and potentially increasing capacity by 50 percent.

The project was designed and constructed in a world-class fashion, using modern technology and following international standards for environmental management, occupational safety and social responsibility. The facilities include impermeable lined tailing storage and waste-water treatment ponds, the first of their kind in the region. FCX has made significant investments in infrastructure in the region that will have lasting benefits to the country, including upgrading a national road and the regional power generation and transmission systems. FCX’s social and community development programs include development of local micro-enterprise businesses, agricultural capacity-building initiatives, malaria abatement programs, additional potable water wells, new medical facilities and several new schools. The project will continue to provide important benefits to the Congolese through employment and the provision of local services and to the DRC government through substantial tax, royalty and dividend payments.

FCX is continuing to work cooperatively with the DRC government to resolve the ongoing contract review. FCX believes its contract is fair and equitable, complies with Congolese law and is enforceable without modification. The review process has not affected the development schedule or current operations.

Molybdenum. FCX is the world’s largest producer of molybdenum. FCX conducts molybdenum mining operations at its wholly owned Henderson underground mine in Colorado and sells by-product molybdenum primarily from its North America copper mines.








Third Quarter
Nine Months
Molybdenum Mining Operations
2009
2008
2009
2008









Molybdenum (millions of recoverable pounds)







Productiona

8

13

21

33
Sales, excluding purchased metalb

16

19

42

59
Average realized price per pound
$ 13.95
$ 32.11
$ 11.93
$ 31.78

Unit net cash costs per pound of molybdenumc


$ 4.69
$ 4.90
$ 5.34
$ 4.99









a. Amounts reflect production at the Henderson molybdenum mine.

b. Includes sales of molybdenum produced as a by-product at the North and South America copper mines.

c. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements, refer to the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX’s web site, www.fcx.com.



In the third quarter of 2009, consolidated molybdenum sales from the Henderson mine and by-product mines totaled 16 million pounds, 16 percent lower than third-quarter 2008 sales. Molybdenum markets have been significantly affected by the downturn in global economic conditions; as a result, FCX continues to operate its Henderson primary molybdenum mine at 60 percent of capacity. However, molybdenum prices in recent months have improved from the $9.50 per pound level at the start of 2009. FCX has restarted the molybdenum circuit at the Cerro Verde mine, which produced 3 million pounds in 2008, and will continue to review and adjust its operating plans to reflect market conditions.

For the year 2009, FCX expects molybdenum sales from its mines to approximate 56 million pounds, compared with 71 million pounds in 2008. The weekly average Metals Week Molybdenum Dealer Oxide price as of October 20, 2009, was $12.25 per pound.

Unit net cash costs were lower in the third quarter of 2009 compared with the third quarter of 2008 primarily because of cost reduction efforts, partly offset by lower volumes. Unit net cash costs were higher in the first nine months of 2009 compared with the first nine months of 2008, primarily because of lower volumes. Assuming achievement of current 2009 sales estimates, FCX estimates 2009 average unit net cash costs for its Henderson mine will approximate $5.60 per pound of molybdenum.

EXPLORATION ACTIVITIES

FCX is conducting exploration activities near its existing mines with a focus on opportunities to expand reserves that will support additional future production capacity in the large mineral districts where it currently operates. Significantly expanded drilling activities during 2007 and 2008 were successful in providing significant reserve additions and in identifying potential additional ore adjacent to existing ore bodies. Results indicate opportunities for significant future potential reserve additions at Morenci, Sierrita and Bagdad in North America; Cerro Verde in South America and in the Tenke Fungurume district.

Exploration spending in 2009 is estimated to approximate $75 million, compared with $248 million in 2008. FCX continues to analyze exploratory data gained through the core drilling previously undertaken in addition to conducting new activities.

PROVISIONAL PRICING AND OTHER

For the first nine months of 2009, approximately 56 percent of FCX’s mined copper was sold in concentrate, 23 percent as cathode and 21 percent as rod (principally from North America operations). Under the long-established structure of sales agreements prevalent in the industry, substantially all of FCX’s concentrate and cathode sales are provisionally priced at the time of shipment. The provisional prices are finalized in a contractually specified future period (generally one to four months from the shipment date) primarily based on quoted London Metal Exchange (LME) prices. Because a significant portion of FCX’s concentrate and cathode sales in any quarterly period usually remain subject to final pricing, the quarter-end forward price is a major determinant of recorded revenues and the average recorded copper price for the period.

At June 30, 2009, 434 million pounds of copper (net of intercompany sales, forward sales contracts and noncontrolling interests) were provisionally priced at an average of $2.25 per pound. Adjustments to the June 30, 2009, provisionally priced copper sales (net of forward copper sales contracts) resulted in an increase to consolidated revenues of $237 million ($116 million to net income attributable to common stock or $0.25 per share) in the third quarter of 2009, compared with a decrease of $280 million ($126 million to net income attributable to common stock or $0.28 per share) in the third quarter of 2008. Adjustments to prior year provisionally priced copper sales in the first nine months of 2009 resulted in an increase to consolidated revenues of $132 million ($61 million to net income attributable to common stock or $0.14 per share) in the 2009 nine-month period, compared with an increase of $268 million ($114 million to net income attributable to common stock or $0.25 per share) in the 2008 nine-month period.

LME copper prices averaged $2.65 per pound during the third quarter of 2009, compared with FCX’s recorded average price of $2.75 per pound. Approximately half of FCX’s consolidated copper sales during the third quarter were provisionally priced at the time of shipment and are subject to final pricing over the next several months. At September 30, 2009, FCX had copper sales of 398 million pounds of copper (net of intercompany sales and noncontrolling interests) priced at an average of $2.79 per pound, subject to final pricing over the next several months. Each $0.05 change in the price from the September 30, 2009, price for provisionally priced sales would have an approximate $13 million effect on FCX’s 2009 net income attributable to common stock. The LME closing settlement price for copper on October 20, 2009, was $2.92 per pound.

FCX defers recognizing profits on PT-FI’s and its South America sales to Atlantic Copper and on 25 percent of PT-FI’s sales to PT Smelting, PT-FI’s 25 percent-owned Indonesian smelting unit, until final sales to third parties occur. Changes in these net deferrals resulted in reductions to FCX’s net income attributable to common stock totaling $29 million, $0.06 per share, in the third quarter of 2009 and $124 million, $0.29 per share, in the first nine months of 2009. For the 2008 periods, changes in these net deferrals resulted in additions to FCX’s net income attributable to common stock of $33 million, $0.07 per share, in both the third quarter and in the first nine months of 2008. At September 30, 2009, FCX’s net deferred profits on PT-FI and South America concentrate inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income attributable to common stock totaled $152 million.

CASH, DEBT and EQUITY

At September 30, 2009, FCX had consolidated cash of $2.3 billion. Net of noncontrolling interests’ share, taxes and other costs, cash available to parent company is $1.7 billion as shown below (in millions):







September 30,


2009
Cash at domestic companies
$ 709a
Cash at international operations

1,560
Total consolidated cash

2,269
Less: Noncontrolling interests’ share

(405)
Cash, net of noncontrolling interests’ share

1,864
Withholding taxes and other

(185)
Net cash available to parent company
$ 1,679

a. Includes cash at FCX’s parent and North America mining operations.



At September 30, 2009, FCX had $6.6 billion in debt. FCX had no borrowings and $73 million of letters of credit issued under its revolving credit facilities, resulting in total availability of approximately $1.4 billion at September 30, 2009.

During the third quarter of 2009 and through October 20, 2009, FCX repaid $638 million in debt through the redemption of its 6 7/8% Senior Notes due 2014 and open-market purchases of its 8.25% Senior Notes due 2015 and 8.375% Senior Notes due 2017 at a cost of $672 million. Annual interest cost savings associated with these transactions approximate $48 million. Losses on early extinguishments of debt totaled $31 million ($28 million to net income attributable to common stock or $0.06 per share in the third quarter of 2009 and $0.07 per share in the first nine months of 2009) for the third-quarter transactions and are expected to approximate $10 million ($9 million to net income attributable to common stock in the fourth quarter of 2009) for the recent October transactions. FCX may consider additional opportunities to prepay debt in advance of scheduled maturities.

FCX’s debt maturities through 2011 are indicated in the table below (in millions).






2009

$ 26
2010


20
2011


119
Total 2009 - 2011

$ 165










In September 2009, FCX called for redemption its remaining shares of 5 1/2% Convertible Perpetual Preferred Stock. Of the 831,554 shares outstanding at the time of the call, 830,529 shares converted into 17.9 million shares of FCX common stock and the remaining 1,025 shares were redeemed for approximately $1 million cash. The conversions and redemptions of these preferred shares will result in preferred dividend savings of approximately $46 million per year.

At September 30, 2009, FCX had 430 million common shares outstanding. Assuming conversion of FCX’s 6 3/4% Mandatory Convertible Preferred Stock, which automatically convert on May 1, 2010, FCX would have between 469 million and 477 million common shares outstanding (depending on the applicable market price of FCX’s common stock).

OUTLOOK

Projected sales volumes for 2009 approximate 4.0 billion pounds of copper, 2.5 million ounces of gold and 56 million pounds of molybdenum, including 915 million pounds of copper, 425 thousand ounces of gold and 14 million pounds of molybdenum in the fourth quarter of 2009. The achievement of FCX’s sales estimates will be dependent on the achievement of targeted mining rates, the successful operation of production facilities, the impact of weather conditions and other factors.

Operating cash flows totaled $2.0 billion for the third quarter of 2009 and $2.9 billion for the first nine months of 2009. Using estimated sales volumes for 2009 and assuming average prices of $2.75 per pound of copper, $1,000 per ounce of gold and $10 per pound of molybdenum for the fourth quarter of 2009, FCX’s consolidated operating cash flows, net of an estimated $0.3 billion of working capital requirements, are estimated to exceed $4.0 billion in 2009. Working capital requirements principally reflect final settlements with customers in early 2009 of prior year provisionally priced sales. The impact of price changes on FCX’s operating cash flows over the fourth quarter of 2009 would approximate $80 million for each $0.10 per pound change for copper, $30 million for each $50 per ounce change for gold and $5 million for each $1 per pound change for molybdenum.

Capital expenditures totaled $244 million for the third quarter of 2009 and $1.1 billion for the first nine months of 2009. FCX’s capital expenditures are currently estimated to approximate $1.4 billion for 2009 and $1.4 billion for 2010. Capital expenditures for major projects in 2009 are expected to approximate $0.8 billion, which primarily includes Tenke Fungurume (substantially all of which has been funded through September 30, 2009) and underground development activities at Grasberg. Capital expenditures for major projects in 2010 are expected to approximate $0.7 billion, which primarily includes underground development activities at Grasberg and the sulfide ore project at El Abra. Capital spending plans will continue to be reviewed and adjusted in response to changes in market conditions and other factors.

FINANCIAL POLICY

FCX has a long-standing tradition of seeking to build shareholder values through pursuing development projects with high rates of return and returning cash to shareholders through common stock dividends and share purchases. FCX is committed to maintaining a strong balance sheet.

FCX announced separately today that its Board has reinstated an annual cash dividend on its common stock of $0.60 per share. The Board would declare a quarterly dividend of $0.15 per share, with the initial dividend expected to be paid on February 1, 2010. The Board will continue to review FCX’s financial policy on an ongoing basis.

FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX has a dynamic portfolio of operating, expansion and growth projects in the copper industry and is the world’s largest producer of molybdenum.

The company’s portfolio of assets includes the Grasberg mining complex, the world’s largest copper and gold mine in terms of recoverable reserves, significant mining operations in the Americas, including the large scale Morenci and Safford minerals districts in North America and the Cerro Verde and El Abra operations in South America, and the Tenke Fungurume minerals district in the DRC. Additional information about FCX is available on FCX’s web site at 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 operating cash flows, projected capital expenditures, the impact of copper, gold, molybdenum and cobalt price changes, and potential prepayments of debt, future dividend payments and open market purchases of FCX common stock. The declaration and payment of dividends is at the discretion of FCX’s Board of Directors and will depend on FCX’s financial results, cash requirements, future prospects, and other factors deemed relevant by the Board. Accuracy of the forward-looking statements depends on assumptions about events that change over time and is thus susceptible to periodic change based on actual experience and new developments. FCX cautions readers that it assumes no obligation to update the forward-looking statements in this press release and does not intend to update the forward-looking statements more frequently than quarterly. Additionally, important factors that might cause future results to differ from results anticipated by forward-looking statements include mine sequencing, production rates, industry risks, commodity prices, political risks, the potential effects of the recent violence in Indonesia, potential outcomes of the contract review process in the Democratic Republic of Congo, weather-related risks, labor relations, currency translation risks and other factors described in FCX’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission (SEC) as updated by our subsequent filings with the SEC.

This press release also contains certain financial measures such as unit net cash costs per pound of copper and per pound of molybdenum. As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX’s consolidated financial statements are in the supplemental schedule, “Product Revenues and Production Costs,” beginning on page VII, which is available on FCX’s web site, www.fcx.com.

A copy of this release is available on FCX’s web site at www.fcx.com. A conference call with securities analysts about third-quarter 2009 results is scheduled for today at 10:00 a.m. Eastern Time. The conference call will be broadcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides by accessing www.fcx.com. A replay of the webcast will be available through Friday, November 20, 2009.



FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA





Three Months Ended September 30,
COPPER
Production
Sales
(millions of recoverable pounds)
2009
2008
2009
2008
MINED COPPER (FCX’s net interest in %)











North America











Morenci (85%)
107a

163a


114a


160a

Bagdad (100%)


59

59


59


57
Sierrita (100%)
41

46


44


45
Safford (100%)
48

43


46


33
Tyrone (100%)
22

21


23


19
Chino (100%)
9

36


12


42
Miami (100%)
4

5


4


4
Other (100%)
-

1


1


1
Total North America
290

374


303


361













South America











Cerro Verde (53.56%)
161

174


157


173
Candelaria/Ojos del Salado (80%)
88

128


80


122
El Abra (51%)
91

92


90


96
Total South America
340

394


327


391













Indonesia











Grasberg (90.64%)
331b

256b


330b


264b
Africa











Tenke Fungurume (57.75%)
54

-


40


-













Consolidated
1,015

1,024


1,000


1,016













Less noncontrolling participants’ share
191

176


180


176
Net
824

848


820


840













Consolidated sales from mines







1,000


1,016
Purchased copper







47


122
Total consolidated sales







1,047


1,138













Average realized price per pound






$ 2.75

$ 3.14













GOLD











(thousands of recoverable ounces)











MINED GOLD (FCX’s net interest in %)











North America (100%)
1

4


3


6
South America (80%)
22

32


20


30
Indonesia (90.64%)
685b

264b


683b


271b
Consolidated
708

300


706


307













Less noncontrolling participants’ share
69

31


69


31
Net
639

269


637


276













Consolidated sales from mines







706


307
Purchased gold







- c

- c
Total consolidated sales







706


307













Average realized price per ounce






$ 987

$ 869













MOLYBDENUM











(millions of recoverable pounds)











MINED MOLYBDENUM (FCX’s net interest in %)











Henderson (100%)
8

13


N/A


N/A
By-product – North America (100%)
7a

7a


N/A


N/A
By-product – Cerro Verde (53.56%)
-

1


N/A


N/A
Consolidated
15

21


16


19













Less noncontrolling participants’ share
-

- c


- c


- c

Net


15

21


16


19













Consolidated sales from mines







16


19
Purchased molybdenum







1


2
Total consolidated sales







17


21













Average realized price per pound






$ 13.95

$ 32.11













a. Amounts are net of Morenci’s joint venture partner’s 15 percent interest.
b. Amounts are net of Grasberg’s joint venture partner’s interest, which varies in accordance with the terms of the joint venture agreement.
c. Amount rounds to less than 1 million.




FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA (continued)





Nine Months Ended September 30,
COPPER
Production
Sales
(millions of recoverable pounds)
2009
2008
2009
2008
MINED COPPER (FCX’s net interest in %)











North America











Morenci (85%)
323a

464a


349a


478a
Bagdad (100%)
169

165


166


164
Sierrita (100%)
125

136


127


132
Safford (100%)
131

89


125


66
Tyrone (100%)
64

52


63


49
Chino (100%)
27

127


42


139
Miami (100%)
12

14


12


14
Other (100%)
-

4


1


5
Total North America
851

1,051


885


1,047













South America











Cerro Verde (53.56%)
497

519


498


522
Candelaria/Ojos del Salado (80%)
282

325


275


326
El Abra (51%)
267

272


267


274
Total South America
1,046

1,116


1,040


1,122













Indonesia











Grasberg (90.64%)
1,138b

678b


1,131b


700b
Africa











Tenke Fungurume (57.75%)
90

-


66


-













Consolidated
3,125

2,845


3,122


2,869













Less noncontrolling participants’ share
563

503


550


507
Net
2,562

2,342


2,572


2,362













Consolidated sales from mines







3,122


2,869
Purchased copper







138


423
Total consolidated sales







3,260


3,292













Average realized price per pound






$ 2.35

$ 3.43













GOLD











(thousands of recoverable ounces)











MINED GOLD (FCX’s net interest in %)











North America (100%)
3

11


5


12
South America (80%)
69

83


68


83
Indonesia (90.64%)
2,033b

731b


2,015b


757b
Consolidated
2,105

825


2,088


852













Less noncontrolling participants’ share
204

85


203


87
Net
1,901

740


1,885


765













Consolidated sales from mines







2,088


852
Purchased gold







-c


1
Total consolidated sales







2,088


853













Average realized price per ounce






$ 944

$ 897













MOLYBDENUM











(millions of recoverable pounds)











MINED MOLYBDENUM (FCX’s net interest in %)











Henderson (100%)
21

33


N/A


N/A
By-product – North America (100%)
20a

22a


N/A


N/A
By-product – Cerro Verde (53.56%)
1

2


N/A


N/A
Consolidated
42

57


42


59













Less noncontrolling participants’ share
1

1


1


1
Net
41

56


41


58













Consolidated sales from mines







42


59
Purchased molybdenum







4


6
Total consolidated sales







46


65













Average realized price per pound






$ 11.93

$ 31.78













a. Amounts are net of Morenci’s joint venture partner’s 15 percent interest.
b. Amounts are net of Grasberg’s joint venture partner’s interest, which varies in accordance with the terms of the joint venture agreement.
c. Amount rounds to less than 1 million.




FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED OPERATING DATA (continued)











Three Months Ended
Nine Months Ended


September 30,
September 30,


2009
2008
2009
2008
100% North America Copper Mines Operating Data







Solution Extraction/Electrowinning (SX/EW) Operations







Leach ore placed in stockpiles (metric tons per day)
519,200
1,067,000
580,200

1,100,300

Average copper ore grade (percent)
0.30
0.23
0.30
0.22
Copper production (millions of recoverable pounds)
216
251
639
683









Mill Operations







Ore milled (metric tons per day)
166,300
247,900
172,500
249,800
Average ore grades (percent):







Copper
0.32
0.40
0.33
0.40
Molybdenum
0.03
0.02
0.03
0.02
Copper recovery rate (percent)
86.8
83.5
85.7
83.1
Production (millions of recoverable pounds):







Copper
93
151
270
450
Molybdenum (by-product)
7
7
20
22









100% South America Copper Mines Operating Data







SX/EW Operations







Leach ore placed in stockpiles (metric tons per day)
251,500
273,400
254,100
279,600
Average copper ore grade (percent)
0.46
0.45
0.45
0.44
Copper production (millions of recoverable pounds)
142
139
420
418









Mill Operations







Ore milled (metric tons per day)
174,200
189,800
181,000
179,300
Average ore grades (percent):







Copper
0.66
0.78
0.67
0.75
Molybdenum
0.02
0.02
0.02
0.02
Copper recovery rate (percent)
89.0
87.8
89.4
89.5
Production (millions of recoverable pounds):







Copper
198
255
626
698
Molybdenum
-
1
1
2









100% Indonesia Mining Operating Data







Ore milled (metric tons per day)
241,200
193,000
238,800
185,400
Average ore grades:







Copper (percent)
0.90
0.82
1.04
0.76
Gold (grams per metric ton)
1.33
0.61
1.32
0.59
Recovery rates (percent):







Copper
90.7
89.8
90.7
89.8
Gold
84.7
78.0
83.5
78.6
Production (recoverable):







Copper (millions of pounds)
385
274
1,298
725
Gold (thousands of ounces)
799
264
2,267
731









100% Africa Mining Operating Data







Ore milled (metric tons per day)
7,900
-
7,100
-
Average copper ore grade (percent)
3.66
-
3.44
-
Copper recovery rate (percent)
89.3
-
90.5
-
Copper production (millions of recoverable pounds)
54
-
90
-









100% Primary Molybdenum Operating Data







Henderson Molybdenum Mine Operations







Ore milled (metric tons per day)
17,600
27,800
14,800
26,500
Average molybdenum ore grade (percent)
0.26
0.25
0.26
0.23
Molybdenum production (millions of recoverable pounds)
8
13
21
33




























FREEPORT-McMoRan COPPER & GOLD INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



















Three Months Ended
Nine Months Ended


September 30,
September 30,


2009
2008
2009
2008


(In Millions, Except Per Share Amounts)



Revenues
$ 4,144a

$ 4,616a

$ 10,430a

$ 15,729a
Cost of sales:















Production and delivery

1,715


2,857


5,086


8,294
Depreciation, depletion and amortization

252


442


740


1,322
Lower of cost or market inventory adjustments

-


17b


19b


22b
Total cost of sales

1,967


3,316


5,845


9,638
Selling, general and administrative expenses

74


90


225


300
Exploration and research expenses

19


77


73


209
Restructuring and other charges

-


-


23c


-
Total costs and expenses

2,060


3,483


6,166


10,147
Operating income

2,084


1,133


4,264


5,582
Interest expense, net

(162)


(139)


(451)


(444)
Losses on early extinguishment of debt

(31)


-


(31)


(6)
Other income and expense, net

(7)


(14)


(24)


10

Income before income taxes and equity in affiliated companies’ net earnings



1,884


980


3,758


5,142
Provision for income taxes

(684)


(240)


(1,557)


(1,627)
Equity in affiliated companies’ net earnings

3


2


21


16
Net income

1,203


742


2,222


3,531
Net income attributable to noncontrolling interests

(224)


(155)


(492)


(748)
Preferred dividends

(54)


(64)


(174


(191)
Net income attributable to FCX common stockholders
$ 925

$ 523

$ 1,556

$ 2,592

















Net income per share attributable to FCX common stockholders:















Basic
$ 2.23

$ 1.37

$ 3.80

$ 6.78
Diluted
$ 2.07d

$ 1.31d

$ 3.70d

$ 6.20d

















Weighted-average common shares outstanding:















Basic

416


382


409


383
Diluted

472d


447d


428d


449d

















Dividends declared per share of common stock
$ -

$ 0.50

$ -

$

1.375



a. Includes positive (negative) adjustments to provisionally priced copper sales recognized in prior periods, totaling $237 million in third-quarter 2009, $(280) million in third-quarter 2008, $132 million in the 2009 nine-month period and $268 million in the 2008 nine-month period.

b. Relates to copper inventories for the 2008 periods and molybdenum inventories for the 2009 nine-month period.

c. Relates to contract cancellation costs and staff reductions primarily at the Morenci mine, partially offset by gains related to pension and postretirement special benefits and curtailments.

d. Reflects assumed conversion of FCX’s 5½% Convertible Perpetual Preferred Stock, resulting in the exclusion of dividends totaling $5 million in third-quarter 2009, $15 million in third-quarter 2008, $28 million in the 2009 nine-month period and $45 million in the 2008 nine-month period.Also includes assumed conversion of FCX’s 6¾% Mandatory Convertible Preferred Stock, reflecting exclusion of dividends totaling $48 million in third-quarter 2009, $49 million in third-quarter 2008 and $146 million in the 2008 nine-month period.The 6¾% Mandatory Convertible Preferred Stock was not dilutive for the nine months ended September 30, 2009, because the dilution threshold for the nine-month period is $3.72 per share. The assumed conversions result in the inclusion of 53 million common shares in third-quarter 2009, 17 million common shares in the 2009 nine-month period and 63 million common shares in each of the 2008 periods.In addition, the 2009 periods include 26.8 million common shares sold in February 2009.





FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)









September 30,
December 31,


2009
2008


(In Millions)
ASSETS







Current assets:







Cash and cash equivalents
$ 2,269

$ 872
Trade accounts receivable

1,292


374
Income tax receivables

390


611
Other accounts receivable

174


227
Product inventories and materials and supplies, net

2,314


2,192
Mill and leach stockpiles

602


571
Other current assets

365


386
Total current assets

7,406


5,233
Property, plant, equipment and development costs, net

16,075


16,002
Long-term mill and leach stockpiles

1,294


1,145
Intangible assets, net

342


364
Trust assets

140


142
Other assets

448


467
Total assets
$ 25,705

$ 23,353









LIABILITIES AND EQUITY







Current liabilities:







Accounts payable and accrued liabilities
$ 1,986

$ 2,766
Accrued income taxes

940


163
Current portion of reclamation and environmental liabilities

187


162
Current portion of long-term debt and short-term borrowings

44


67
Total current liabilities

3,157


3,158
Long-term debt, less current portion:







Senior notes

6,350a


6,884
Project financing, equipment loans and other

228


250
Revolving credit facility

-


150
Total long-term debt, less current portion

6,578


7,284
Deferred income taxes

2,660


2,339
Reclamation and environmental liabilities, less current portion

2,006


1,951
Other liabilities

1,370


1,520
Total liabilities

15,771


16,252
Equity:







FCX stockholders’ equity:







5½% Convertible Perpetual Preferred Stock

-


832
6¾% Mandatory Convertible Preferred Stock

2,875


2,875
Common stock

55


51
Capital in excess of par value

15,627


13,989
Accumulated deficit

(6,711)


(8,267)
Accumulated other comprehensive loss

(224)


(305)
Common stock held in treasury

(3,413)


(3,402)
Total FCX stockholders’ equity

8,209


5,773
Noncontrolling interests

1,725


1,328
Total equity

9,934


7,101
Total liabilities and equity
$ 25,705

$ 23,353

a. On August 20, 2009, FCX redeemed the outstanding $340 million balance of its 6?% Senior Notes due 2014 for $352 million (equal to a redemption price of 103.438 percent).During the third quarter of 2009, FCX purchased in the open market $99 million of its 8.25% Senior Notes due 2015 for $107 million (an average purchase price of 107.454 percent) and $92 million of its 8.375% Senior Notes due 2017 for $99 million (an average purchase price of 107.302 percent).From October 1 through October 20, 2009, FCX purchased in the open market $42 million of its 8.25% Senior Notes for $45 million (an average purchase price of 107.640 percent) and $65 million of its 8.375% Senior Notes for $69 million (an average purchase price of 107.282 percent).





FREEPORT-McMoRan COPPER & GOLD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)






Nine Months Ended


September 30,


2009
2008


(In Millions)
Cash flow from operating activities:







Net income
$ 2,222

$ 3,531

Adjustments to reconcile net income to net cash provided by operating activities:









Depreciation, depletion and amortization

740


1,322
Lower of cost or market inventory adjustments

19


22
Stock-based compensation

75


113
Charges for reclamation and environmental liabilities, including accretion

150


141
Losses on early extinguishment of debt

31


6
Deferred income taxes

(32)


(347)
Intercompany profit on PT Freeport Indonesia sales to PT Smelting

47


(5)
Increase in long-term mill and leach stockpiles

(68)


(167)
Changes in other assets and liabilities

136


35
Amortization of intangible assets/liabilities and other, net

53


59
(Increases) decreases in working capital:







Accounts receivable

(754)


(198)
Inventories

(176)


(567)
Other current assets

88


(58)
Accounts payable and accrued liabilities

(518)


(152)
Accrued income and other taxes

913


(424)
Settlement of reclamation and environmental liabilities

(76)


(142)
Net cash provided by operating activities

2,850


3,169









Cash flow from investing activities:







Capital expenditures:







North America copper mines

(121)


(498)
South America copper mines

(129)


(229)
Indonesia

(186)


(332)
Africa

(577)


(698)
Other

(125)


(172)
Proceeds from the sale of assets and other, net

(8)


58
Net cash used in investing activities

(1,146)


(1,871)









Cash flow from financing activities:







Net proceeds from sale of common stock

740


-
Proceeds from revolving credit facility and other debt

307


183
Repayments of revolving credit facility and other debt

(1,066)


(198)
Purchases of FCX common stock

-


(500)
Cash dividends paid:







Common stock

-


(504)
Preferred stock

(181)


(191)
Noncontrolling interests

(149)


(714)
Net (payments for) proceeds from stock-based awards

(9)


22
Excess tax benefit from stock-based awards

2


25
Contributions from noncontrolling interests

54


155
Bank fees and other

(5)


-
Net cash used in financing activities

(307)


(1,722)









Net increase (decrease) in cash and cash equivalents

1,397


(424)
Cash and cash equivalents at beginning of year

872


1,626
Cash and cash equivalents at end of period
$ 2,269

$ 1,202



























Contacts

Freeport-McMoRan Copper & Gold Inc.
Financial Contacts:
Kathleen L. Quirk, 602-366-8016
David P. Joint, 504-582-4203
or
Media Contact:
William L. Collier, 504-582-1750
Categories: Press Releases